The Last Piece of the Puzzle: IX Swap

The Last Piece of the Puzzle: IX Swap

Despite the exponential growth of the STO/TSO industry, the industry still faces a key infrastructure issue – liquidity.

Looking into the most established STO exchanges, such as Open Finance and TZero, you would realize that there is hardly any liquidity on these exchanges, and trades are made OTC (over-the-counter) — these exchanges are simply Craigslist for STOs.

Why is there no liquidity?

Unlike cryptocurrency markets, becoming an STO market maker requires tedious licenses, which may take a long time to attain. Cryptocurrency market makers cannot market make STOs, and traditional market makers have no incentives to start, given the current size and uniqueness of the STO market.

Another key reason for the lack of liquidity is that liquidity is sliced for each exchange an STO is listed on. This differs from traditional markets where there are central depositories that can easily account for share distributions. Due to this lack of liquidity, buyers who would like to enter the market cannot purchase STOs due to the limited supply on each exchange.

The “Uniswap Effect”

Before the introduction of AMMs and liquidity pools, decentralized exchange volume was almost non-existent. This was large because there were no market makers on DEX platforms as many of the traded assets were smaller, less known altcoins that present similar characteristics to the STO market today.

As shown from the chart below, the total monthly DEX volume increased from $39.5 million to $43.5 billion in a year, growing by 110,100%. The phenomenon was purely due to Uniswap’s introduction of the automated market maker.

Given that the total private asset market size ($7.5 trillion) is over 5x the size of the cryptocurrency industry ($1.43 trillion), the potential of growth is much more enormous. IX Swap aims to bring an even greater volume of liquidity to the STO market.

The IX Swap Solution

IX Swap is creating the world’s first liquidity pools and automated market makers for the security token industry. In simplicity, IX Swap is the “Uniswap” for the security token (STO) and tokenized stock (TSO) industry.

Given the complexities and the lack of market makers in the industry, as discussed above, creating a centralized exchange (CEX) would not be feasible. But, by creating liquidity pools with automated market-making capabilities, issuers and individuals can make their liquidity in the market and, in turn, “market makers,” which also replaces the need for traditional market makers in the industry.

Furthermore, to address the slicing of a liquidity problem, IX Swap will allow other licensed broker-dealers to plug into IX Swap to facilitate the trading of their STO assets. This will enable other licensed exchanges to receive a share of the trading fees on IX Swap and allow IX Swap to be the liquidity provider platform for the STO ecosystem.

IX Swap is the last missing piece of the puzzle needed to bring life to the STO/TSO industry. IX Swap will revolutionize the STO/TSO industry and be the liquidity solution for all STO/TSO exchanges globally, bridging CeFi and DeFi.

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About IX Swap

IX Swap is the “Uniswap” for STOs and TSOs, the regulatory and liquidity solution for security tokens and tokenized stocks.

IX Swap will be the FIRST platform to provide liquidity pools and automated market-making functions for the STO/TSO industry. The platform will facilitate the trading of security tokens through licensed custodians and security brokers, which will provide actual ownership and claim over these real-world assets.

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