Brought to you by the Liquid team to help you make sense of crypto.
It has been a busy time at Liquid.
A few months ago, we took a long, hard look at our project portfolio and made a conscious decision to focus our efforts on the current platform. We had been working on a wide range of projects – mostly audit or regulatory in nature – but we were also taking on and delivering a number of peripheral projects.
Liquid platform technology was conceived and first written about five years ago in Mario's Saigon apartment – on his kitchen table to be exact. Since then, the prospect has grown exponentially in both size and complexity.
With our commitment to regulation and professional audit, we take on an enormous responsibility, the implications of which are sometimes hard to appreciate for observers. We have pledged to make Liquid software "industrial strength" by following regulatory and audit best practice, thereby implementing a host of measurable controls and running our business in a highly-organized and prescribed way.
The compliance undertaking is massive. Many of the background inspections, reconciliations and reports produced are invisible to our customers, but they are essential if we are to maintain a regulatory license.
Oftentimes, the shorter way to do many things is to do only one thing at a time, so on our journey, we’ve had to make some hard decisions. A lot of our time has been spent on platform stability, the elimination of technical debt and the development of foundation components that facilitate compliance and enable long-term growth. We have also overhauled our testing and QA practices, thereby increasing coverage and accuracy. We built generic frameworks that enable automated testing for all project disciplines and revamped our System Integration and Non-Functional Testing facilities.
There’s so much work that we do that our community may not be aware of. We understand there’s an appetite for big, flash product releases, but to get to those, there’s a great deal of other tasks that must also be completed.
An example would be that we needed to build and implement both a Client Ledger and a General Ledger. I can happily report that after many months of hard work, both foundation components are now in Production. Business-as-usual maintenance and enhancements are in-progress. Without these two critical components, we would not be able to effectively satisfy regulatory reporting requirements or run the business.
Speaking of our business, outside of the compliance foundation already mentioned, there are essentially four main process groups that we deal with:
- Onboarding (including KYC)
- Deposits (includes fiat)
- Withdrawals (includes fiat)
Check out any Telegram channel and you will find that comments (and complaints) can be largely categorized into one of these four groups.
By ensuring focus on these major areas of the business, we have been working on a comprehensive improvement initiative.
We had already implemented KYC (ID verification, background checking) but found that "straight through processing" was a far way off. Percentage-wise, the sign-up success rate was in the low tens to twenties. We had to do a lot better.
The Liquid Pro mobile app along with the Japan-only Liquid Lite app have served to streamline signups. We now enjoy a much larger signup success rate. Additional improvements are in the works ("liveness" checks) to further ensure that the person signing-up matches the person photographed in the ID document.
Proof of Address, which is really difficult to identify and meaningfully authenticate, and largely extraneous unless fiat transactions are involved, has now been bypassed for crypto-only business.
Market Monitoring is now also in place to further protect the platform and our clients from nefarious activity.
Additionally, wallet monitoring has been implemented. We are keeping a close eye on where crypto originates and where it ends up.
Our team has spent considerable time eliminating a lot of the technical debt that has accumulated since inception. We are now addressing web/UI and mobile performance along with processing throughput for the API and internal messaging systems. We are reconciling our backlog of tasks to ensure that all reported bugs and issues are being dealt with in a timely fashion. We are constantly focussed on infrastructure best practices, optimizing as necessary and upgrading/replacing as appropriate.
In October 2018 we released 1-block Bitcoin deposit confirmations, which meant that Bitcoin and Bitcoin Cash deposits made to Liquid were reflected in client balances after just one confirmation, which can mean as little as 5–8 minutes.
More recently in June we worked with GAP600 to make this process even faster, better and more stand-out from our competitors. Traders can now see their Bitcoin deposits show in their accounts as soon as the transaction is published on the network with zero block confirmations. Ultimately, this means Bitcoin deposits can usually be confirmed on Liquid in less than ten seconds.
To put that into context, most exchanges confirm Bitcoin deposits after around three blocks, which takes about 30 minutes on average and can be significantly longer when the network is busy.
Following the success of Bitcoin fast deposits, we are looking forward to integrating the same technology for ETH deposits, with the hope of expanding this to all ERC-20 tokens.
Historically, regular crypto withdrawals on Liquid (and before that Quoinex and Qryptos) sometimes took many days. We needed to work on this to bring down processing time and still maintain security.
We now leverage MPC (Multi-Party Computing) to multi-sig crypto withdrawal requests for all major currencies (even if that currency is single-sig). We have also implemented a “warm wallet” scheme (funded by Quoine’s own assets - never with customer assets) surrounded by a host of limits and security controls. Major cryptocurrencies are currently supported and the list is constantly growing. Withdrawal times are getting better. We’re not fully there yet, but it’s our aim to increase frequency to support 24x7 hourly withdrawals in the coming months.
For a bit of insight, on average between 7am JST and 10pm JST Bitcoin withdrawals are processed in ~45 minutes. The improvement is huge from a year ago and is even substantial when compared to our average times in June.
Recent strategic developments
Despite our focus on platform stability and technical debt elimination, we have also worked and are working on a number of strategic platform improvements:
Technical traders rely on timely access to market data when placing orders to enter the market at prevailing price levels. Liquid Tap – our new proprietary WebSocket service – has been developed to provide clients with a better high-frequency trading experience. Latency, privacy and market data improvements have all been implemented and the service is already in Production.
Liquid Infinity was recently released for our global users to enjoy trading CFD up to 100x leverage.
Isolated Margin dovetails with Liquid Infinity. It allows users the option to isolate a certain amount of margin to maintain their leveraged position, instead of using their entire account balance. Enabling Isolated Margin decreases the risk of opening higher leverage positions in volatile markets.
Advanced order entry
We are currently building advanced order entry into our margin trading and Infinity products. Once complete, traders will have much greater control over their trades.
Users will be able to set their take profit and stop loss levels at the time of order entry, if they so wish, which vastly increases flexibility when setting orders.
Some of our customers have expressed an interest in an easier, more straightforward method to buy crypto. We listened. The recently released Quick Exchange feature is a simplified way to quickly exchange any enabled currency for another even when there is no corresponding market pair.
Quick Exchange supports crypto-fiat and crypto-crypto exchange. Fiat-fiat is NOT supported. The facility has also been released on the Liquid Pro mobile platform (both IOS & Android).
Neptune & “The World Book”
Neptune is a proprietary software engine that basically has three KPIs:
- It provides price stability on the Liquid exchange.
- It increases the depth of the Liquid order book by providing continuous quotes.
- It sources liquidity from other exchanges (External World Book).
Neptune has been in development behind the scenes for some time and roll-out has been gradual, which is happening right now, part of which you’ve seen from Mike’s latest update.
There’s more to come on this in due course.
With Liquid vision, our goal is to provide an immersive exchange experience where you can track individual performance, discover relevant industry content and follow your favorite trader’s activity - all in one dashboard.
You’ll be able to keep track of your history like never before and discover who you are and how you fit into the larger cryptocurrency ecosystem of traders and investors. Using statistics, graphs and figures, we’ll give you a holistic overview of your time on Liquid and guide your next steps to optimize your journey.
This is your time to shine. Compete with your family, friends or the entire world to show you are the best trader on Liquid. Browse the leaderboards, unearth trading wizards and join a larger community that is passionate about learning and succeeding in crypto. Share your knowledge, learn from others and have fun while doing it. Grow together, win together.
Here’s an initial design concept for Liquid Vision (subject to change with the final product, of course):
In May 2019 we released the Liquid Pro app to our global customers. We had been missing a refined mobile app in our product catalogue, and while we had the Quoinex app, it was underutilized and in need of a complete overhaul.
So we doubled down in 2019 by bringing on a seasoned Head of Mobile Engineering, dedicated Mobile Product Managers and more engineering resources to take our mobile game to the next level. We’ve achieved some great results so far, increasing our mobile app users by more than 5,000%.
Now that we have the core product for Liquid Pro (and Liquid Lite for our Japanese customers), we intend to build on it so that you will have the same quality, robust features you are accustomed to on the web application – and then some. Ultimately, the mobile experience should not feel like a secondary option, but a primary option for users to be able to conveniently manage their crypto portfolio wherever they are.
We now release a Change Log with every app update so you can see exactly how we are improving the mobile experience for Liquid customers.
The Liquid Distributed Ledger
There’s a lot to say about the Liquid Distributed Ledger, so much in fact that it will have to wait for part 2 of this Rayblog.
Until next time...
This content is not financial advice and should not form the basis of any financial investment decisions nor be seen as a recommendation to buy or sell any good or product. Trading cryptocurrency is complex and comes with a high risk of losing money, particularly if you trade on leverage. You should carefully consider whether trading cryptocurrencies is right for you and take the time to learn how trading works and decide how much money you are prepared to lose.
WRITTEN BYRay Hennessey