Qurrex is the first hybrid cryptocurrency exchange integrating industrial infrastructure of traditional stock exchanges with decentralized network. It is combines three trading systems:
- Professional centralized cryptocurrency exchange;
- Unique decentralized cryptocurrency exchange for liquidity providers, consisting of thousands of mini-exchanges;
- New generation trading terminal.
The Qurrex platform was designed exclusively as a centralized cryptocurrency exchange system. The reason for this was related to the team’s background: having worked for over 10 years on the creation of various exchange and broker systems and products for the traditional markets, we inadvertently became adherents of this approach. However, research into distributed networks as part of delivering the current project led us to new approaches and tools for solving many of the problems that we had encountered over the course of recent years. Here we refer, first and foremost, to the need to increase liquidity of separate instruments, as well as to increase clients’ confidence in unregulated infrastructure providers. The outcome of our investigations was the understanding that, in order to create an effective exchange system and meet the demands of a wide circle of users, what is necessary is the harmonious merging of centralized and decentralized elements. The main thing we understood was the fact that, within an infrastructure set up to handle various assets, the potential of the community behind the public blockchain networks must be taken into account, as it is precisely this community that is the basis of the future crypto-economy.
In the global sense, Qurrex has two main subsystems: a central node and a client part.
Structure of the central node:
- The core of the system, which is responsible for the work of the orders list and feedback on them;
- A module responsible for verifying orders;
- A module that transmits market data;
- A system contour responsible for non-trading operations;
- An administrative module that provides the ability to manage all the subsystems of Qurrex;
- A module responsible for keeping logs of user accounts and transaction history;
- A module for registration and identification of users;
- A module responsible for non-trading operations;
- A security node responsible for the supply of cryptocurrency and the corresponding settlements;
- A module for settlements and supply of assets;
- A module for settlements on the blockchain network;
- A module for fiat settlements with banks;
- Cold data storage;
- Gateways for exchange of data with external client systems;
- Services for providing market data;
- A node for balancing loads between exchange gateways and for authorization within the system.
As for the client part, it includes the following elements:
- A settlement service and storage of performance indicators for managing trading accounts;
- A news and analytics server that aggregates statistical macroeconomic data, news publications related to the market, and news about the largest exchanges;
- Auto tracking for trading signals;
- A back-end that provides an intermediate API layer for end users. It exchanges information on the WebSocket protocol with a NGINX server, which regulates the load between NodeJS nodes;
- The graphical level is realized on NodeJS Backend. The web client works on iOS and Android mobile devices.
The proposed architecture allows for vertical scaling until the maximum planned performance of each node is reached. As for horizontal scaling, it will be realized through the addition of new nodes and regulation of the load between them. Thanks to horizontal scaling, various tools are available for various executable cores.
In regard to available tools, the trading system will support the following types:
- Spot tools (currency pairs, cryptocurrency pairs);
- REPOs and swaps;
- Futures and options.
Thanks to such an assortment of tools, the hybrid cryptocurrency exchange will allow system users to carry out targeted and anonymous transactions. In the future, we plan to also add the ability to execute transactions on discrete auctions. This is one of the advantages of the Qurrex hybrid cryptoexchange.
Additionally, all market participants, including private investors and institutional clients, will have familiar, convenient, and transparent tools at their disposal. Aside from spot tools and REPO, we plan to add the ability to trade with derivatives, including, first and foremost, index futures. This is one of the most promising niches of the cryptocurrency industry.
At this article’s time of writing, not one of the cryptocurrency exchanges provides a similar tool set or capabilities. At the beginning of legislative regulation of the industry, all of this will help attract the biggest players of the financial market who can’t yet begin working with cryptocurrencies due to the absence of the needed functionality of exchanges and a legislative framework.
QRX VALUE FOR THE PROFESSIONAL CENTRALIZED EXCHANGE
Discount or cash-back. 20% of the exchange income from trade commission fees will be distributed among the whole pool of QRX tokens as a discount/cash-back. This possibility will be useful for the active QRX exchange users who wish to cut their exchange-related expenses. This is an example of the distribution.
Say, the commission income of the exchange is $100, $20 of which will be evenly distributed among 100 tokens. That means that a holder of one token is entitled to a 20 cents discount/cash-back. But what is the full-scale direct and relative economic effect for the ecosystem players?
Let’s take a deeper look.
Exchange. 20% of the exchange commission fees is approximately 50% of net profit, which is a significant part of the company’s business. According to Bloomberg, exchange commission of the World’s top-10 cryptocurrency exchanges ranges from $400 thousand to $3 million a day. Which is approximately $150 million to $1 billion a year respectively.
Project’s hard cap is $55 million (70 million QRX). Taking into account the commission fee and the estimated assets turnover, one can assume the potential token pay-back period within 5–12 months range. But in fact this period is slightly shorter.
We must take into account here that the estimation has been done based on the current cryptomarket parameters, while Qurrex targets the professional market, which capabilities and volume are much bigger compared to those of non-professional.
Retail market. Currently there are around 10 million users of crypto economy. Daily turnover equivalent to one user varies in a range of $1000-$2000, which equals to $350-$750 thousand a year. A user’s exchange commission fees expenses make $600-$1200 a year. In order to allow an average user to get an approximate expenses value refund of $1200 a year they must deposit less than 600–1200 QRX tokens (once) at the Qurrex exchange. Considering the market growth, an additional tokens depositing may be required later in the amount less than 300 QRX.
On the one hand, it is not so much. On the other — at the emission limit of 70 million QRX tokens the total amount of users with 1200 QRX tokens stack cannot exceed 58 333. For the 10 million current cryptocurrency exchange users it constitutes only 0.6%, or every 180th person, for 200 million users of conventional markets it is less than 0.03%, or every 3600th person.
Using this compilation we can come up with clear understanding of demand and competition of a QRX token at the retail market.
Professional market. It is highly probable that rather than an average user, the main beneficiary of the discount/cash-back will be the institutional players in the form of FX and traditional brokers, trading companies, liquidity providers, banks and other companies, whose trade turnover volume is significantly high.
Let’s make an example.
An average broker with 10,000 users will pay $6–12 million in exchange commission fees every year. Possession of 1 million QRX tokens will allow to save $1–4 million every year, that is practically comparable to 30–100% of net profit in this business. For the institutional players the crypto market will long be one of the segments with highest margin, so possession of tools which provide long-term savings at the market will become a strategic competitive advantage.
At the emission limit of 70 million QRX tokens, the total amount of users with 1 million QRX tokens stack cannot exceed 70. For 20,000 traditional market users this is merely 0.35% or every 250th person.
Financial lease. Qurrex exchange specialized trading section features provide the possibility to operate the QRX token derivative financial lease with a floating and fixed rate in order to allow the QRX token owner to make an interest rate profit nominated in highly liquid currencies (USD, EUR, BTC, ETH, QRX), while the lessee of the QRX tokens can get a discount/cash-back for the trade commission fee for the period of time.
So, the owners of QRX tokens who do not actively trade at the platform can still benefit from them. They will get passive income thanks to secured transfer of tokens for temporary use by a third party. In accordance with our estimates, the lease cost will be no less than 50% of the redistributed discount/cash-back for the lease period.
Besides the application listed above, QRX token will be used:
- As exchange asset — QRX quotes will be listed for the key crypto and fiat pairs. Therefore the token will have the attribute of market goods with high liquidity, with a market price that is subject to a change due to exchange rate gains. This function will primarily be demanded by exchange speculators (professional traders), hedge funds, investment banks, trading companies, etc. who profit off of expectations of the economic agents (volatility).
- QRX token will become a payment instrument for any services of Qurrex exchange at the market (current exchange rate) price, and in this case we expect demand growth from tokens emitters (ICO) and HFT traders (co-location zone);
Fundamental factors that influence the market price of the token are the economic results of Qurrex exchange (trading volume and trading exchange fee) and market agents’ expectations of the parameter fluctuations in future. Project team is sure that Qurrex will be among the top-3 cryptocurrency exchanges, and this is only a matter of time, even relatively soon.
QRX VALUE FOR DECENTRALIZED EXCHANGE
The concept of decentralized Qurrex exchange suggested by the team is aimed at finding solution for the current key issue of the decentralized exchanges — absence of trading volumes.
The solution is to create the first decentralized cryptocurrency exchange with turnover exceeding $10 billion per day. Currently the mutual turnover of all decentralized exchanges is less than $10 billion per day, which is less than 0.1% of daily crypto market turnover. If we consider the highly liquid pair (e.g. ETH/BTC), it will be even several times less than that.
Resolving this, rather than consisting of only technological aspects (atomic transfers or their speed), means to address the economical aspect. The issue is that currently there are no decentralized exchanges that would economically encourage the liquidity providers to participate in the organization of trading by means of providing the liquidity. Therefore, the core of the decentralized Qurrex exchange is the liquidity node, which by its functionality is a truncated type of exchange capable of drafting a request register and drawing up the balance.
The owner of a liquidity node can receive income by means of:
in-chain exchange commission fees of the decentralized exchange for the provision of own liquidity and management of the client’s passive liquidity.
off-chain commission fees for provision of leverages, repo, access to the system and other services.
Decentralized Qurrex system is designed to allow for thousands of liquidity nodes as part of its structure. It is expected that liquidity providers will be constantly earning at least several hundred thousand dollars up to several dozens of million dollars a year by means of providing liquidity for niche tools paired with high liquidity currencies.
Taking the average broker above with the 10,000 users we can estimate that they would earn $ 6-$12 million dollars a year from their clients in the decentralized environment of hybrid crypto exchange.
Liquidity providers — who are they?
At the traditional markets they are banks, specialized financial middle-men, prime brokers, market makers. In the crypto economy it is possible to add major miners, mining pools, and owners of significant stacks of niche cryptocurrencies to that list.
The rights for creating of a liquidity node can be acquired only in return to QRX tokens by the formula:
The value of QRX token at the decentralized Qurrex exchange resides in the fact that in return to possession of a liquidity node it is possible to get active and passive kinds of income. Guaranteed demand will be provided from a wide range of players, such as institutional participants, major miners, mining pools, owners of significant stacks of niche cryptocurrencies (altcoins). Only several thousands of participants can own liquidity nodes.
QRX and it's role for the trading terminal
Trading terminal or middleware Qurrex will provide a series of trading services for b2c. For example, such as algorithmic trading, autofollow, trade signals. Socialized traders — owners of small QRX amounts — can get access to these services at a discount or, in some cases, free of charge. Also, the owners of medium and major QRX stacks will have discounted access to b2b information services of the exchange, such as market data.
In is impossible to buy QRX tokens at retail prior to private pre-sale completion. Currently the team of hybrid crypto currency exchange is interacting with and processing the orders of institutional investors only.
According to plans upon completion of pre-ICO in May-June, 2018 a small amount of tokens will be provided to public sale via a white-list with a depositary system. The depositary system has already been launched.
The cost of 1 QRX is equalized to US$1 or cryptocurrency equivalent. You can buy tokens using Ethereum, Bitcoins, or Litecoins. Total amount to be sold during ICO is 55 million tokens out of 70 million emitted, which is 78.6% of the total amount of emitted coins.
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