LGO Markets: Benefits of an Hybrid Solution

Exploring the benefits of an Hybrid Cryptocurrency Exchange

In “Why LGO is the next generation Crypto-Exchange (3/3)” and in “Shortfalls of Decentralized Exchanges”, we exposed some of the most important drawbacks of both Centralized Exchanges and Decentralized Exchanges. Because of their fundamental limitations and design, neither exchange structures are adapted for institutional investors.

With its novel hybrid protocol, LGO Markets is the first viable crypto-exchange platform. Based on blockchain technology, LGO Markets offers a premium Hybrid Exchange that incorporates a decentralized ledger within its proprietary centralized platform bringing large scale crypto trading to a level of quality and transparency that has never been seen yet.

LGO Markets is the first cryptocurrency exchange providing proofs of fairness and transparency in addition to the highest service quality.

LGO Markets : An Hybrid Exchange

LGO Markets is an hybrid exchange that incorporates features of both centralized and decentralized systems.

How is LGO Markets structured?

The protocol itself is a semi decentralized order matching protocol. Incoming orders and transactions are encrypted, timestamped and stored in a blockchain, while order matching is made off-chain. The decentralization of orders and transactions information allows for transparent price formation, transaction auditability, and zero front-running. Centralization of order pooling and order matching leads to efficiency and scalability, bypassing current blockchain limitations.

Benefits of Centralization

Because LGO is an Hybrid Exchange with a centralized infrastructure, it will be able to take advantage of the traditional features of Centralized Exchanges. Among the key benefits for institutional investors LGO Markets seeks to provide:

• Deep liquidity and high throughput: with off-chain order pooling and order matching, LGO Markets aims to offer efficient and scalable infrastructure. Additionally, given LGO’s focus on institutional investors — which is also compatible with individual investors — and crypto/fiat trading, it could become the exchange giving access to the largest pools of liquidity.
• Large fiat and crypto deposits: thanks to its partnership with the regulated firm Makor Securities, LGO will be able to offer large fiat custody solutions for clients at major banks. Another advantage of the partnership will be the ability to offer a KYC process up to the standards of the traditional financial industry.
• Advanced analytics: custom reports, portfolio analysis tools, ICO tools, tax documents, audit logs, proof of reserve and other advanced functionalities…

Benefits of Decentralization

As cryptocurrencies are not fully regulated yet, LGO’s strategy is to record the trading activity on a decentralized ledger to provide investors with a radically transparent exchange and revolutionary features:

• Transparent price formation: all order pool logs and matched trades are recorded on the blockchain making orders’ execution provably fair.
• Front-running proof: transactions are hidden until the order book is locked , which makes front-running impossible for LGO Markets.
• Latency and fair execution: as the blockchain requires a very short delay for validating blocks of randomly ordered transactions, high frequency bots lose their speed advantage. In other words, block validation time acts as a level playing field for all market participants.

By recording the order book and the matched trades on a blockchain, LGO Markets guarantees that all the transactions are made in a fair and transparent way. Moreover, the protocol technology is certified by CertEurope, one of the leading code certification entities.

Comparing LGO Markets to Existing Cryptocurrency Exchanges:

On-chain: Order book is published in a specific blockchain.
Trustless: Actors don’t need to trust other actors in order for the system to function.
Front-running proof: Impossible for the exchange to front run users’ orders.
Throughput: Maximal number of orders that can be sent in a given amount of time.
Fiat: Fiat currencies can be deposited into and withdrawn from the exchange. A fiat currency is a currency that a government has declared to be legal tender, but which is not backed by a physical commodity.
External blockchain token: Ability to trade a token for a token in another blockchain.

Conclusion

LGO Markets’ hybrid protocol has been thought from the ground up to create the preferred cryptocurrency exchange for investors.

LGO’s vision is to create a fair and transparent environment for institutional and other investors to manage and invest in cryptocurrencies and digital assets. To this end, LGO uses a novel blockchain-based technology to guarantee fairness and transparency of the order book. The security, as well as auditing, reporting and analytical needs are met in the safest and most efficient way.

With its unique hybrid protocol, LGO Markets aspires to become the reference in terms of fairness, security and compliance for all cryptocurrency exchanges.

About LGO

LGO Markets is a demonstrably fair, bank-backed premium exchange for institutional and individual investors. It incorporates a decentralized ledger within its proprietary centralized platform in order to guarantee the inalterability, temporality and transparency of the order book and ensure a fair trading environment.

Public Sale starts on Feb 1st!

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