Liquidity Offset Network

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Liquidity Offset Network
Liquidity-offset-network-logo.jpg
Founded 2019
Headquarters Singapore
Key People Simon Nursey, CEO of OTSafe; Bob de Groot, Europe and U.S. Head of Distribution & Strategy; Chung Khye, Head of Operations; Joseph Lee, Head of Technology & Execution
Employees 10-20
Website Liquidity Offset Network Home

Liquidity Offset Network (LON) is a digital asset clearinghouse for cryptocurrency derivatives.[1]

Background

The creation of the Liquidity Offset Network began in April 2019. Hoe Lon Leng, an ex-Goldman Sachs executive invited two dozen guests to Sentosa Island in Singapore to discuss the creation of a framework for the crypto derivatives markets. The guests included traders from Galaxy Digital and Circle. The group discussed trading bilateral derivatives and the lack of standardization of derivatives contracts in the cryptocurrency markets, among other issues. The group decided to create a central counterparty clearinghouse for crypto derivatives called the Liquidity Offset Network.[2][3] The group originally planned the clearinghouse to launch that July, but did not launch until January 2020.[4]

Products and Services

OTSafe

The Liquidity Offset Network runs a central counterparty clearing service for OTC cryptocurrency trading called OTSafe. At time of launch (January 2020), LedgerX's LedgerPrime, as well as Singaporean trading firm QCP Capital had already begun using the service. OTSafe provides credit risk and collateral management services. The service also provides matching, valuation, risk, and margin calculation tools for digital assets. When it launched, OTSafe's CEO Simon Nursey said he hoped that the service would help improve the nascent cryptocurrency options markets. "With the launch of OTSafe we hope to give the market one of the tools in needs to achieve that potential," he said.[5]

According to the company's website, OTSafe also allows trading parties to allow trade closure with any counterparty through netting, which is a method of reducing risk by calculating the difference between what each party owes to the other party(s) involved with the trade, then paying out the difference instead of the original amounts involved in the trade.[6][7]

Key People

  • Simon Nursey, CEO of OTSafe
  • Bob de Groot, Europe and USA Head of Distribution & Strategy
  • Chung Khye, Head of Operations
  • Joseph Lee, Head of Technology & Execution

References