Do you know who the main players in the crypto space are at the moment?
These are the so-called “Whales”, people who have AT LEAST several million dollars in crypto. in old school financial terms they are known as “High Net Worth Individuals” (HNWI), i.e. private individuals with large capital.
These people are called “whales” because whenever they make trades in the market, they make huge “waves” due to the volume of their trades.
But who are these whales?
Well, they include early adopters/holders of Bitcoin and other cryptocurrencies, venture capitalists, crypto hedge funds, investment bankers and private investors who got involved into trade and investment earlier.
What should be noted is that the market share is still occupied by private investors, i.e. people like me and you, and what people like to call “Mum and Dad” investors.
If we try to rank all these participants based on what share of the cryptocurrency market they own, then I think it will look something like this:
1. Early adopters, hodlers , crypto enthusiasts and experts
2. Cryptocurrency venture investors and hedge funds
3. Private individuals aka “mother’s” investors, although more likely even “baby” investors. (The average age of crypto fund managers, according to a Blockchain Capital survey, is 26 years old)
4. Investment banks and Wall Street.
The fact is that even if traditional, old-school financial institutions, i.e., the real whales such as pension funds, insurance companies, charities and mutual funds, want to enter this market, they they won't work.
Moreover, many traditional hedge funds, investment banks and other big name investors are unable and unwilling to stay out of the market for several reasons that we will discuss below.
All of these corporate investors are real whales, because if you look at the amount of money they handle, you will understand how ridiculous the modern cryptocurrency market is in comparison.
For example, a pension fund manages $6 trillion in assets, while the crypto market has not even touched the $1 trillion mark yet.
Why are corporate investors out of business yet?
If you attended Consensus Invest 2017 in New York last November, then you probably heard different market assessments, but everyone is dancing around figures $1 trillion. And the heads of investment institutions agree that starting from this point, entry into the industry becomes possible.
Anything below this mark is too small for such big players simply because of how “charged” they are. At the same conference, it was clear that institutions have an ardent desire to join the cryptosphere.
Recently, OMERS, an Ontario pension fund, launched a public company aimed at raising $50 million to invest in Ethereum and ERC20 tokens.
Bubble? HA! Everything is just beginning
At the time of writing, the total capitalization is dancing around $550 billion. This may seem like a lot, but if you compare it to other financial markets, it is a Chihuahua vs Great Dane level comparison.
Comparison of market capitalization:
- Cryptocurrencies = $550 billion
- Dot-com bubble at its peak = $3 trillion
- Gold = $7.7 trillion
- Total stock market = $73 trillion
- Total real estate market = $217 trillion
- Derivatives market = $544 trillion
- Lack of laws and regulation - if you invest other people's money, you can't just take their money and bet on the red.
- Security and storage of crypto assets - these people don't really know how blockchain works, let alone how to securely store Private Keys. And even if they do, these methods do not comply with SEC rules and regulations regarding the security of asset custody.
- The market is too small and there is no way for large players to enter without causing huge spikes.
- The market is too small and there is no way for large players to enter without causing huge spikes. li>
- Republic Protocol is not dependent on Ethereum , and can easily move to another platform, because cross-chain compatible. It also follows that almost any trading pairs can be represented.
- Lack of competitors both within the blockchain space and outside. The remaining exchanges are either centralized, or insufficiently protected, or do not provide the opportunity for dark pools and hidden order books.
- Trading volume in pairs of Bitcoin, Ethereum and ERC20 tokens exceeds $90 billion, and this number is constantly increasing. In traditional financial markets, dark pools account for 20-30% of all trading in the US, suggesting at least $18 billion in future crypto turnover.
- The REN token has a real use, i.e. To. everyone will need to pay a commission, from which a reward will be formed for the miners who ensure the operation of the network and the execution of trading orders. The token will also be used as a preventive measure against a Sybil attack or other attempts to decipher prices, trading order books, etc. against any impact on liquidity.
- Phabhakar Reddy - investor and advisor from Accel Partners.
- Dorjee Sun - COO Santiment, trading sites and market research agencies.
- John Ng Pangilinan — partner from Signum Capital.
- Anup Malani - the guy looks cool in the matter of academic credentials, it looks like he advises on economics and trade.
- Partnership with Digix Global (the first company conducted an ICO on Ethereum) who created the DGX token, a digital currency backed by gold.
- Taiyang Zhang (CEO) - 3 years of work as director of Neucode, a web and software development company focused on AI and complex systems, and so on 1 year of work as a co-founder of Virgil Capital.
- Loong Wang (CTO) - Bachelor of Computer Science with 7 months of research experience at the Australian National University, and about 2 years of work as a Lead Software Developer at Neucode.< /li>
- Noah Ingham (Developer) - Mathematician and Bachelor of Advanced Computing, with 9 months of active experience in TKBT and NICTA, after which he already worked at Republic Protocol.
- Susruth Nadimpalli (Developer) — Bachelor of advanced computing.
- Hugh Greethead (Community Lead) — Bachelor of advanced computing.
Ok, it’s clear that these whales have a lot of money for the game, but they cannot participate in it, even if they really want to.
Why?
Regarding points (1) and (2), serious progress is expected in the second half of 2018. In fact, I would like to talk about point (3).
< h2>Opening the floodgates for whales and sharks to enterYou see, if an investor comes to the crypto market right now, taking with him $100 billion, then in our current market of $550 billion this will already be almost 20% of the entire capitalization !
Just imagine what will happen if such an amount is introduced into the market? Everything will fly upward not only from the very fact of this, but also from the FOMO of all participants who want to join the flight to the moon.
The influence of institutions and real sector leaders will be enormous.
In fact, we have already felt the impact of this with the introduction of Bitcoin futures, and at the moment this is the only way for large players to enter the crypto sphere.
That's all until they get access to dark pools...
What are dark pools?
Dark pools are trading platforms where you can sell and buy shares and other assets through a hidden order book.
The name does not come from the fact that the people using this are so rich that they cannot see the light through the pile of money that lies in front of them.
No, the name is that because no one sees the placed buy and sell orders. It's completely anonymous and "bypass the checkout" - or at least bypass the order books.
In this context, one should, indeed, treat this as the dark waters of the ocean depths, where the largest and most voracious creatures live.
What is the point of using dark pools?
Well, it allows large players to trade crypto without much impact on the market price.
If someone wants to buy Bitcoin from the heart at $11,000, and people see a buy order for $100 million on the exchange, this wall will trigger a price increase.
Therefore, when you start to hear that institutions have finally entered the crypto sphere, you can only begin to predict the collapse of the bubble, fortunately you will see this moment by the effect that will have on the market.
What else?
In addition to dark pools, which allow large players to enter the market without much influence on the price, another important condition that so far stops the latter from participating is security and trust. that the one with whom they are trading will not be able to somehow deceive them, and the exchange on which the action takes place will not be hacked or run away with all the money.
The truth is that since 2016 dark pools have been available on at least Kraken and TradeZero. So why hasn’t anyone really entered the market anyway?
Well, who even uses Kraken or TradeZero? And as mentioned earlier, there are problems with the safety of crypto assets as well as with laws and regulations that need to be done first.
Another important aspect is that these exchanges, be that as it may, are not leaders, they are not insured, and do not inspire much trust.
If large financial institutions trade on such exchanges, their funds will not be protected from hacking, theft or any other loss.
A player of this kind who decides to enter the market is obliged to protect himself from all sides.
They can't just come in with a bunch of other people's money in their hands and then, if something happens, say: “Uh, about your $200 million? Well, they were stolen, damn exchanges, sorry."
And then Republic Protocol comes to the rescue
It's actually simple, but let's be clear:
Decentralized: means that there is no single center managing exchanges, there is no intermediary necessary for the functioning of the exchange, and the dark pool in particular. Kraken and TradeZero offer dark pools, but they are centralized and those wishing to trade must accept this.
Therefore, Republc Protocol aims to create a decentralized solution, the importance of which we will explain later.
Trustless: The fact that the dark pool is decentralized means that you don't need to trust anyone or anything except the protocol itself.
There is no chance that the exchange will be hacked and your funds stolen. And the organization of trade itself allows you to use the service without trusting each participant.
Cross-chain: the protocol allows trading across different blockchains, so Ether on the Ethereum blockchain can be exchanged for Bitcoin on the Bitcoin blockchain.
Atomic trading: this is a consequence of the decentralization of the dark pool, it is essentially just exchanging one coin for another WITHOUT the need to use an exchange. You are simply trading with another participant who also wants to sell or buy something.
Think of it as a more advanced version of Shapeshift or Changely, because in our case trading is 1-to-1, p2p, while Shapeshift and Changely still need a middleman exchanger, resulting in large commissions and security problems.
Liquidity is key!
When Max Boonen, founder of B2C2, was asked about decentralized exchanges at Consensus Invest 2017, he responded that most developers are focused on the wrong things.
Liquidity is definitely critical an important parameter, since no one wants to trade on an exchange where transactions take hours to execute. It can be compared to creating a MySpace page now to be social.
In this regard, Republic Protocol's advisors and partners can definitely open doors for many blockchain projects, etc. institutional investors, which will have a great impact on liquidity.
The guaranteed liquidity of the Kyber Network partner platform, for example, interacts well with Republic Protocol.
To fully understand
In fact, Republic Protocol offers the opportunity for large players to trade crypto without causing mass craze during growth or calls for suicide with giant down candles, given their influence on the market.
Plus, security is an important advantage, so whales won't have to worry about losing their money to the exchange. And when we are talking about large sums, this is really the most important condition.
I will not go into the technical details of the implementation of all this in the Republic Protocol, all this can be found in their whitepaper. Let me just say that the protocol is mathematically proven and cryptographically secure.
There are several points that attract attention when getting to know Republic, and there is a good chance that all this will allow the project to become a leader in the market:
Take a look at those behind the project
Republic Protocol has a well-equipped set of advisors and partners:
- < li>Loi Luu - CEO of Kyber Network, a DEX protocol similar to ZRX and Loopring.
In addition to this, of course, there is a strong community behind the project.
Let's go to the team:
In addition to the CEO and CTO, the team has minimal experience in consists mainly of graduates of the Academies. The CEO has relevant knowledge and experience in the field of crypto trading.
The developers seem relatively inexperienced, raising questions about whether they are capable of developing and implementing all the ideas.
From the whitepaper we can conclude that the team has decent scientific and technical knowledge and an understanding of how to make a protocol, but whether their practical knowledge and skills are enough to implement everything planned is an open question.
They are actively hiring developers and mathematicians to strengthen the team, so there is a chance.
Work in progress
At the moment, the project is only implementing its technical ideas, updates are being made daily to github. According to the project Roadmap, a private and public testnet is planned for the second quarter of 2018, and the launch of the mainnet in the third. The roadmap is quite realistic in density. There are chances that the team will come up with something very valuable.
