Blockchain Startup Level01 Aims to Revolutionize Derivatives Trading
by Polina Chernykh · 3 min read
Level01 is a P2P trading platform designed to provide users with a non-custodial and AI analytics-driven exchange for the burgeoning derivatives market.
The cryptocurrency market has witnessed substantial growth over the last few years owing to the rising list of use cases for the digital currency and its underlying technology. Many in the financial industry are starting to realize the benefits of blockchain and its amazing market opportunities, applying the technology across a wide range of sectors, including online payments, capital markets, investment, and trade services. In addition to complete transparency and almost instant P2P transfers, the technology helps financial institutions to significantly cut the cost of transactions.
Level01 is the first project that will leverage the cryptocurrency and blockchain technology to build a new platform for peer-to-peer derivatives (options) trading. The startup aims to transform the current derivatives trading sector, addressing the key issues such as price manipulation, centralization, and hidden fees.
The initial idea, according to Jonathon Loi, the founder and CEO of Level01, was to develop a platform that enables users to trade directly between each other. After using a number of different broker apps, he understood the financial trading industry still lacks a service that would allow traders offer option contracts directly to other traders.
Options are a type of derivatives contracts between two or more parties and whose price is derived from underlying assets like commodities, bonds, and stocks. Today, the valuation of the market stands at an impressive $1.2 quadrillion on the high end.
The derivatives are generally traded on large exchanges and OTC markets and can’t be accessed by retail individuals. To start trading, these investors have to deal with third-party brokers or brokerage firms, paying high fees for their services. Moreover, there is always a risk of fraud on the part of the brokerage.
Level01 eliminates the need for intermediaries, allowing investors to trade with each other on a peer-to-peer basis.
“The project strives to make derivatives trading accessible to a greater portion of the retail user market, eliminating the segregation between retail and inter-dealer trading and offering them an easier entry into understanding cryptocurrency as a medium of exchange and utility,” the company said in awhite-paper.
Worth mentioning, Level01 users can trade derivatives and options in Forex, Cryptocurrencies, Commodities, Stocks and Indices, all without any broker and middleman – Cryptos come as just one of the company’s offerings.
Using machine learning technology, the platform will provide traders with efficient price discovery and fair price analytics based on market price movements to make it viable and fair for both parties of the trading contract. All transactions on the platform are automated and transparent, with profits being instantly transferred to an investor’s wallet after the trade is completed.
To ensure accuracy of the market data, Level01 has partnered with the leading information company Thomson Reuters that will provide derivatives pricing analytics in real time via its API. This partnership marks the first time Thomson Reuters collaborates with not a traditional financial company, what means they believe in Level01 and its solution.
“Thomson Reuters is a respected industry leader in providing intelligent information and data, with trust principles aligned with our vision. Our collaboration with Thomson Reuters ensures we have the necessary quality data for Level 01 algorithms to perform most efficiently,” Loi noted.
At the moment, the company is running a tokensale that is set to finish on December 31, 2018. The soft of the campaign is $15 million, while the hard cap is $75 million.
Given all the benefits of the new platform, Level01 has all the potential to massively disrupt the financial and derivatives market in the near future.
Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.