Seems pretty straightforward to me… (Liquid diagram from QASH’s website)
QASH is another exchange based cryptocurrency similar to Binance coin. If you do a little searching it isn’t super clear what they are actually doing. They basically have 4 named entities, QASH: the currency, Quoine: the exchange, Qryptos: the other exchange, and Liquid: the prospective global liquidity provider. This is actually what their website says “QUOINE's LIQUID platform is a financial utility that will benefit the entire crypto economy. A platform where token issuers, token holders, innovators, and users of next generation financial services all benefit and contribute to Liquidity.” I have no idea what that means. What they are really doing is much easier to explain, basically the same thing as Coinbase/GDAX but in Japan. Sounds like a ticket to print money right? Don’t drop your chopsticks just yet.
Team
The team is top tier. It is a few ex Softbank guys and some experienced traders and capital markets professionals. I do not feel they will have any problem creating viable products and their Quoine and Qryptos exchanges already seem to be operational.
Technology
Their tech gets a bit tricky. I think you would really have to be a high volume/high speed trader to really test it. At the end of the day it is an exchange so if you can trade successfully it works.
They have added benefits of margin trading and approval from the Japanese regulators. At the surface they seem to have everything in order. The issue is that an exchange requires market participants to be effective, it’s a shining example of the network effect. The more volume you have the tighter the spreads and the better the price discovery. They report to have had $12B in annual volume which sounds like a lot but it really isn’t. To put things in perspective, Binance is doing $7.3B in volume a day at the time of writing.
The Liquid platform they are developing sounds very promising. Essentially they will be building a platform that allows you to trade all cryptocurrency pairs across all exchanges. This would all but eliminate price disparities among global exchanges given sufficient utilization.
Market
They operate in Japan which is great from a regulatory perspective. Unlike most of the world Japan has clear laws and licensure for cryptocurrencies and exchanges. This sounds great but the elephant in the room is bitFlyer, a mature exchange in Japan that is already doing $200m in volume a day. For the math wizzes out there that works out to much more than the $12B annually that Quoine/Qryptos doing.
The other issue is that cryptocurrency by nature is borderless. It doesn’t really matter if you have the best exchange in Japan because the best exchange in China can beat you i.e. Binance. The problem with exchanges is they are relatively undifferentiated, if you can buy and sell crypto, then it works. Differentiating features like leverage matter to a subset of traders, but at the end of the day you need volume to make an exchange work and that means broad based adoption.
The Liquid platform they are building sounds very promising. But sounds promising and market success are two different things. I think it is possible that differing processing times among currencies could create liquidity problems. Other issues might be pushback from the outside exchanges and higher fees as a result of sourcing volume from 3rd parties.
Final word
If QASH can be the Japanese Coinbase the currency will likely skyrocket. The problem is it is increasingly looking like bitFlyer is the Japanese Coinbase and they are also working on their own superfast blockchain called miyabi which has taken the interest of Japan’s largest bank clearing network.
The Liquid platform they are building is what I would call a big hairy audacious goal. They essentially want to be the market maker for every crypto asset in the world. If they can do it great, but as it stands there are likely a few big hurdles to achieving market success.
Watch the volume on their exchanges, if it starts to pick up consider QASH. If you are betting on the Liquid platform current timeline has a rollout of Q2 2018.
To do your own research have a look at How to evaluate Altcoins like a Venture Capitalist
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