Blockchain innovation startup Blockstream Corporation has announced that its first bitcoin sidechain, Liquid Network, is live. The new trading platform was developed with the aim of bringing much-needed liquidity to the crypto market by bringing together industry participants.Also see: In Senate Crypto Hearing, Bitcoin and Blockchain Get Defended, Derided
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On September 27th, the Liquid Network went online, generating its first block with over 20 crypto players registered to the platform, as per Blockstream’s official blog announcement. Some of the popular exchanges include OKCoin, Xapo, BitMEX, Bitfinex, SIX Digital Exchange, and the recently hacked Japanese crypto exchange Zaif.The remaining high bitcoin trading volume exchanges are Altonomy, Atlantic Financial, Bitbank, Bitmax, Bitso, BTCBOX, BTSE, Buull Exchange, DGroup, Coinone, Crypto Garage, GOPAX (operated by Streami), Korbit, L2B Global, Unocoin, and XBTO.
Liquid aims to address the crypto market’s biggest issue–a lack of liquidity–by offering a unified platform and connecting industry members such as crypto exchanges, financial institutions, market makers, and brokers.Blockstream’s chief strategy officer Samson Mow said:
“Liquidity across exchanges is definitively not there yet. With the advent of Liquid–with faster settlement times–we should be able to improve it by making it faster and easier to transfer.”
The official announcement explains that Liquid will facilitate fast, secure, and confidential transactions between high trading volume entities, ensuring a higher degree of liquidity. Providing further insight into the modus operandi of the innovative sidechain, Blockstream stated that it will leverage its native asset Liquid Bitcoin (L-BTC), which is “backed by a two-way peg to bitcoin”. Blockstream claims that Liquid can settle transactions between Liquid members in under two minutes.
“Liquid’s native Liquid Bitcoin (L-BTC) asset is backed by a two-way peg to Bitcoin (BTC) and can be redeemed at any time, providing institutions and end users with a secure and rapid way to transfer bitcoin between members with full settlement in two minutes.”The number of cryptocurrency exchanges has been on the rise since last year’s crypto bull run. Reports suggest that bitcoin exchanges collectively are responsible for over 50 percent of all bitcoin trading volume.Now, exchanges will be able to convert bitcoin to proxy token L-BTC and maneuver through the secure Liquid Network sidechain instead of straining the actual main network, which slows transaction speeds. Faster transactions will lead to higher liquidity, as a result, contributing to overall market stability.
Apart from speeding up transactions and offering higher liquidity, Blockstream plans to add support for third-party hardware wallets Ledger and Trezor. Blockstream’s bitcoin wallet GreenAddress has already been integrated with Liquid.Although the Liquid Network is live now, there is still a long way to go. For now, it does solve the lack of liquidity issue for exchanges. Is Liquid Network a solution to improve liquidity in the crypto market? Share your views in the comments section below.