The appeal of decentralization

The economic boom ushered in by the crypto revolution is driven by a new capability that has never existed before: The ability to send value over distance without giving up custody to an intermediary. Elimination of custodial risk has unleashed many economic and business models driving value and capital into crypto.

The extension of this capability from the currency layer into upper layers of finance may trigger a much larger boom but attempts to build even an exchange have failed spectacularly. Part of the reason is that these attempts have conflated the term decentralization with topology and technology used in the base layer, rather than the value gained by its users.

Decentralization is about control, not topology or technology. This is the reason 15000 or so banks (topology) and permissioned blockchains like R3 or Hyperledger (technology) have had minimal impact on the crypto revolution.

Pure On-chain exchanges are unsatisfactory

Putting order books and matching on-chain causes intolerable latencies for slow block times causing the user to fatigue and give up. Especially with fast block times, the order or fill could be on multiple chain tips and it may never make into the final blockchain. This retards the feasibility of hedging and other trading strategies.

Matching on-chain is also self-limiting in terms of scaling as blocks congest with higher usage. If the product is traded elsewhere, manipulation by clogging the network and taking an arbitrage trade once the movement is observed in other markets is obviously simple. This may change in the future as high-speed blockchains and tangle based back-ends become production ready and we are observing and experimenting this area closely.

The Goldilocks approach

With Ethereum, it’s feasible to have non-custodial accounts and P&L settlements on-chain. Treading on the blockchain lightly and settling at fixed durations enables us to provide high speed trading with the UX of a centralized exchange combined with the non-custodial benefits of decentralization.

The value eco-system

A decentralized exchange is a small part of the trading ecosystem. A rich interaction with market data providers, charting services, trading rooms, managed trading services and many other participants occurs simultaneously. Automating and decentralizing this interaction would give a big boost to the trading community.

Leverj Tokens enable ecosystem participants to interact with each other in addition to the exchange. We hope this unlocks a huge market of services that is not yet developed in the cryptosphere.

Features already in production

The Bitcoin version of the platform already has the following features in production:

Decentralized Identity: Use a bitcoin address as your identity. You are no longer controlled by your email provider or ID provider. You are resistant to phishing.

Split Multisig with Hardware wallet support: Funds not in trade are parked in a 2-of-2 multisig. Coins cannot move from this account without signature from your private key. Use a hardware wallet for extra security.

Segregated accounts and 100% proof of reserve: All balances for user accounts are on blockchain. Unauthorized moving even a single satoshi would be noticed immediately by the entire world.

Zero-knowledge authentication and API keys: Enables access rights without pre-registration or sharing secrets over a side-channel.

Proof of audit: Hash of settlement data embedded in blockchain as OP_RETURN.

The Ethereum version will add non-custodial accounts and the token ecosystem

Our team

Our team is made of people with deep experience in finance, technology and economics. Our CEO is a 10 year wall street veteran and a professional trader with his own trading blog. Our CTO has 10 years experience building high-speed forex trading platform. Our Head of Marketing is a 20 year veteran with deep experience in digital marketing. Our economist is a well respected figure in crypto and a trader. Our COO has 20+ years experience in corporate strategy, consulting and operations. Our community manager runs her own crypto community in addition to Leverj.

Haven’t had enough?

Visit our website and read our whitepaper. Join our telegram group and we will be glad to discuss more.