Introducing Conversational OTC Trading

Published in

Fluidity

4 min readAug 16, 2018

Wallet-to-wallet OTC trades on AirSwap are faster and more secure — creating a network of verified (KYC) traders and unlocking a new type of liquidity. Rolling out now to select groups. Join the waitlist at https://next.airswap.io/.

Following our event on August 8th, we’re rolling out our new OTC trading product and are excited to share more about what we’re building, how it works, and what’s next.

Over-the-counter (OTC) trading makes up a large portion of global crypto trading — but still employs a traditional workflow. Ethereum tokens (ERC20) have capabilities to enable significant security and efficiency improvements, enabling us to unlock a new type of liquidity altogether.

The existing workflow

OTC today is time consuming, hands-on, and expensive. Back office teams manage client discovery and on-boarding, trading is coordinated over a variety of chat apps, and settlement is slow and rife with risk.

We’ve taken a close look at this workflow, and have designed an integrated trading product hand-in-hand with several prominent OTC desks in the space.

Efficient counterparty discovery

The new discovery process is streamlined by enabling “Makers” to indicate what they’re interested in trading and “Takers” to publish requests directly to them. This instantly connects mutually interested traders based on tokens, sizes, and qualifications.

We’ve added a capability to the architecture known as Pub/Sub, where Makers subscribe to markets and Takers publish requests. This provides automated discovery that can be used by any peer on the AirSwap network.

Fast and compliant onboarding

Traders can now complete “know your customer” (KYC) and anti-money laundering (AML) verification with our third-party partner Wyre, a registered money services business (MSB).

After traders complete this KYC process, a non-fungible token (NFT) is deployed onto the Ethereum blockchain to indicate verification. This token is then public and visible to anyone, making for a decentralized network of verified traders.

Fully-integrated trading experience

The workflow on AirSwap is being optimized for counterparty discovery and efficient order communication and assessment, making for a streamlined trading experience end-to-end. Takers can broadcast requests and receive executable orders from makers in return, or those makers can engage in a 1:1 conversation to work out details.

When a trade is ready to be made, it’s submitted to the Swap smart contract for an atomic swap, which transfers both sides of the trade at the speed of an Ethereum transaction — without counter-party risk and without trading fees.

A seamless and secure workflow

By focusing on efficient verified counter-party discovery and a decentralized trading experience powered by atomic swaps, we’re establishing a new model for seamless and secure OTC trading.

We’re working together with OTC trading desks around the world to meet requirements and expectations, and build the best product available.

Unlocking a new liquidity type for ERC20 tokens

With this model and new product in hand, we’re equipped to pursue and unlock a new type of liquidity for ERC20 tokens. We’re addressing an existing demand from traders to be able to connect, price, and execute trades without settlement risk.

We expect to learn a lot during our roll out period, and as we grow into this new vision of the AirSwap system, we aim to include a wide range of traders interested in getting involved. We welcome you to join the waitlist at https://next.airswap.io/.

About AirSwap

AirSwap enables peer-to-peer trading on the Ethereum blockchain. Built on a decentralized protocol, traders can add or remove liquidity through a suite of trustless products that are easy to use and free. Our mission is to empower the world with frictionless trade.