The financial landscape continues to evolve as more blockchain startups enter the industry. Once again, alternative investments are a target for those wanting to disrupt the space with cryptocurrencies and distributed ledgers. In fact, this is the second major blockchain platform launch this week for alternative investments.
Cryptocurrency trading platform LXDX today announced that it has received backing from Dymon Asia Venture Capital Fund LP to make its platform more widely available. In addition to Dymon Asia Ventures, advisors include cryptocurrency investor and author Arianna Simpson, Justin Litchfield of ProChain Capital, and Alex Disney, formerly of Cumberland Mining.
So what does LXDX offer its users and budding crypto investors?
A cryptocurrency exchange, LXDX includes software that allows both public retail exchanges and private exchanges to take advantage of institutional block trading, with a focus on investment banks, hedge funds, and other conventional markets. Dymon Asia Ventures is the venture capital arm of Dymon Asia Capital, an alternative investment manager headquartered in Singapore. With approximately $4.9 billion currently under management, it is helping LXDX expand to new markets.
“The average user will be able to interact with larger-size deals and have the ability to obtain better prices than on any other platform,” LXDX cofounder and CFO John Hazen told me. “This is because of our low latency technology, which allows market makers to feel comfortable quoting larger size in tighter bid/ask spreads.”
Among the platform’s key capabilities are the volumes and high speeds of each transaction, two issues that currently hold back broad adoption of cryptocurrencies.
“Our platform is a departure from the incumbent solutions,” LXDX chief operating officer Will Roman told me. “LXDX is built from scratch in highly optimized C++; the architecture is hosted on our hardware in primary market datacenters, such as SG1; and the engineering and policy have both been approached with an absolute commitment to fairness, not just performance. All of this enables our operators to bridge the gap between market makers and retail and institutional traders. Bringing technology capable of supporting the million-orders-per-second world of high-frequency trading is an important step toward the mainstream adoption of cryptocurrency.”
So why is blockchain technology the right approach for this market, rather than traditional alternate investment platforms and exchanges?
“Cryptocurrencies are a wholly new asset class,” LXDX CEO Joshua Greenwald told me. “To the extent that they can be integrated into the existing infrastructure, we seek to facilitate that integration. Where they cannot, we will build the tools to make trading and hedging in this new class of investments safe, fair, and cost-effective. We anticipate massive scaling in tokenization and securitization. Art, real estate, commodities, usage rights — we are building toward the million-token future.”
With blockchain and a focus on speed and volume, LXDX claims it can help where other exchanges currently have issues — namely, reacting to market volatility.
“To trade cryptocurrencies like traditional financial securities, the current set of tools that are offered by current cryptocurrency exchanges cannot keep up with the volatility of the cryptocurrencies themselves,” Hazen said. “Our experience with technology that can deal with the volatility of traditional securities is built into our exchange.”
So what’s next for LXDX?
“We are exploring expanding our low latency technology with decentralization to be able to offer the benefits of decentralization to our users, as well as the speed they would expect in a centralized world,” Hazen said.