⚡Announcing LN Clear - Instant OTC Derivatives Clearing, Building, Ecosystem and much more!
Welcome to the 16th issue of this newsletter which covers everything at the intersection of the Lightning Network and Finance, as well as updates about LN Markets.
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🥁 Announcing LN Clear - Instant OTC Derivatives Clearing
The successful launch of LN Markets, the first retail Bitcoin derivatives exchange built on top of the Lightning Network, has proven how strong the value proposition of instant trading and settlement is. This paper aims to introduce LN Clear, a new environment for OTC derivatives clearing.
Instead of having to trust exchanges for custody, price discovery and clearing, LN Clear proposes a new secure and compliant clearing platform which enables market participants to have direct ownership and instant access to their funds.
LN Clear is a private network of payment channels where trading firms can meet their peers to trade and clear instantly OTC derivatives. LN Clear ensures that the whole process from trade confirmation to final settlement is secure, fast and simple.
To do so, LN Clear leverages the technical stack built for Bitcoin's Lightning Network and uses Lightning wallets as self-custodial hot wallets for margin payments and delivery.
The benefits of clearing OTC derivatives on LN Clear are:
- Customization: trade the product you need, the way you want
- Security: no need to transfer funds in advance to be able to enter in a trade
- Capital efficiency: move BTC near instantly and react instantly to volatility
- Compliance: within a private network of vetted players
- Ease-of-use: trade confirmation and payment are embedded in the same process
Though any type of OTC derivative could be cleared on LNC in the near future, we focus first on the fast-growing Bitcoin Options markets. Indeed, the lack of secure and compliant venues for trading is currently preventing traditional financial institutions from entering this market and we believe LN Clear will prove to be a natural fit for them.
In a nutshell, LN Clear offers a framework for financial institutions to perpetually synchronize their settlement in a secure and instant system. It reduces friction both inside and between financial institutions, resulting in higher revenues, reduced operational costs, and lower risk while improving trust and transparency in real-time.
After introducing the core concepts behind LN Clear below, we will detail in our next article how this instant OTC derivatives clearing platform works.
Continue reading “LN Clear: instant OTC derivatives clearing” here…
While we develop LN Clear, we keep trying to build the best trading experience for our users. Our new trading engine has proved to be quite robust during the start of this bull market and we thank you all for your trust and continuous feedback in our Telegram support group.
We are happy to release a new public dashboard for LN Markets which enables all of you to access the history of the Index and the Bid / Offer prices used as Price Reference when closing positions:
“I was surprised by the large numbers of apps and merchants supporting lightning. There’s over 400 supporting LN payments and over 300 apps that have been created for the network. This is all the more surprising since there’s no token sales or anything to pad these numbers.”
The mapping out of projects categories is insightful:
- We are now in the active phase of building out the infrastructure layer.
- Financial infrastructure and services is already the second prevailing segment!
- Gaming, earning and tipping are gaining traction.
The full projects database is available here.
In other news, the Australian exchange Bitaroo shared their secret sauce for integrating Lightning deposits and withdrawals, leading the way for other exchanges. Spoiler alert: it involves interacting with Wallet of Satoshi via API an regularly withdrawing to their cold wallet.
Despite all these good news, it’s also important to keep in mind that we are in the early days of the Lightning Network. There is still work to be done in terms of channel management and networking overall, as can be seen in this graph of payments through Strike that were never sent at all:
🤯 You may have already seen it, still we are completely mind-blown by the fact that an actual US Senator-elect, Cynthia Lummis from Wyoming, talks publicly about Bitcoin this way:
And we conclude this issue with a perfect testimonial for our next pitch deck:
Thank you for your support and let’s keep building the future of finance together!