Cryptocurrency exchange platform Liquid.com has been selected by Clear Markets Holdings, Inc., to lead the public sale of Clarity (CLRX), the native token of Clear Markets blockchain, a private network to be based on the proprietary distributed ledger technology, Corda, from blockchain software firm R3.
The Clarity token adds a tool to manage the risk of cryptocurrency derivatives and can only be bought once it is released on secondary listing platforms such as Liquid.
The Clarity token sale began on August 28, 2019, 10 am JST. Participants in the token sale on Liquid will be able to purchase Clarity with the following currencies: USD, USDC, XRP, BTC, ETH, QASH, and BCH.
In 2017, Liquid hosted its own QASH token sale successfully in 2017, selling out 350 million QASH tokens, equivalent to USD $105 million, in three days.
All Clarity token sale participants on Liquid will need to have a verified and funded Liquid account in order to qualify for the offering. Persons in the United States, Japan, China, and certain other jurisdictions are not eligible. Minimum electronic verification requirements to participate in the Clarity token sale include submitting a government ID and a selfie.
Clear Markets intends to swap the token sold on Liquid into a token that it has built on R3’s Corda blockchain. Corda provides a global transaction network which affords much higher transaction rates and less risk for hacking and disruption than other typical public blockchain technologies.
Clarity token sale participants will be able to hold their Corda-based Clarity tokens in their accounts at Liquid, transfer them to qualified custodians or keep them on their own private Corda node.
“We are excited to be partnering with Clear Markets and R3 to launch the Clarity token sale. We share the vision of a more complete cryptocurrency marketplace, one that includes derivatives contracts that use distributed ledger technology to improve risk management. More importantly, this will be Liquid’s first Corda-based token, and we now have the ability to support other Corda based projects in the future.”
– Mike Kayamori, co-founder and CEO of Liquid
Clear Markets, operator of marketplaces for swap contracts regulated by the CFTC in the U.S., FSA in Japan, and FCA in the U.K. and Europe, intends to add crypto derivatives to its offerings.
Derivatives are among the most in-demand products in crypto trading, and the firm is bringing a digital token-driven approach to the management of crypto derivatives.
When the two parties to a crypto swap promise to exchange payments in the future, each is at risk of a default by the other. In traditional fiat-currency swaps, these risks add up. In 2017, according to ISDA, about $1.4 trillion in collateral, or margin, was pledged to backstop the risks of the deals.
Rapid growth in crypto derivatives trading drives growing demand for credit risk management tools.
“Managing counterparty credit risk is one of the most pressing challenges in crypto trading today.”
– Jonathan Heng, Head of Partnerships at Singapore-based Tilde Trading
Clear Markets has developed a token-powered tool that is part of a blockchain integrated into its electronic trading platform for swaps and other derivatives.
“The Clear Markets Crypto Derivatives Credit Risk Mitigation System is an exceptional use of blockchain technology. This clever innovation reduces the risk of crypto derivatives trading, which is expanding rapidly across the globe.”
– Kazutoshi Shidehara, CEO of Archinode, the Singapore-based crypto fund that is one of the potential users of the product
The project creates a precedent as the first use of a distributed ledger for the purpose, and the first such system to be integrated with a crypto derivatives trading platform.
By reducing the risk of derivatives trading, it has the potential to reduce capital costs for crypto traders, an important advance for the crypto ecosystem.
Clear Markets is part-owned by both SBI Holdings, Inc. and the Nikkei group’s QUICK Corp, two leading companies in Japan’s financial information and technology sector. Nonetheless, the Clarity token will be on offer in Japan only after the authorities there approve it for sale.
“It was to support remarkable projects like this that we invested in Clear Markets and R3, and proudly support them today.”
– Mamoru Fujimoto, Executive Officer and Head of Blockchain Promotion Dept., SBI Holdings