The crypto market is relatively new and very diversified. Furthermore, prices vary in different markets. So much so that investors face serious disadvantages when choosing one market without the thorough knowledge of all the others.
The crypto’s price can be very high on one market while being very low on another. So, if the traders don’t have adequate information, they may pay much more, then the real cost.
Several large corporations, such as Nasdaq, Visa, and Morgan Stanley, decided to address this problem. These trading vets want to make fair, equal environment for all traders around the world. That’s how they began building a liquidity solution for the world’s different cryptocurrency markets.
David Weild, a former vice-chair of Nasdaq, stated the crypto marketplaces are highly fragmented and remarkably inefficient. The investors who usually have access consolidated marketplaces, find bid discrepancies as major turn off. The real-time bids can differ by thousands of dollars from one market to the next.
What is the solution and how it works?
Nasdaq, Morgan Stanley, and Visa began the project Apifiny 18 months ago to solve the problem. They created a new platform named ExOne. It is essentially a tool, which gathers information about cryptocurrencies prices on the different markets and offers all the data to the traders. So, they can choose which market suits their needs the most.
As Weild stated, if pipes (aka information sources) don’t see every venue, then the investors risk getting a much worse execution. ExOne tries to lay those proverbial pipes. It’s the plumbing to the more interconnected and consolidated trading experience.
According to Wield, ExOne will access all the marketplaces to generate a “global best bid and offer,” a consolidated quote, securing the most optimal bid for the system’s users.
It’s similar to the “national best bid and offer,” a Wall Street term for a broker’s Security and Exchange Commission-mandated responsibility to get their clients the best possible price. However, Apifiny has not announced the ExOne’s release date so far.
- Trading Instrument