Over-the-counter trading (OTC) accounts for a large portion of crypto activity.
At a retail level, much of market activity is conducted through exchanges. This is because these platforms offer a simple and secure means for traders to quickly move in and out of positions with ample liquidity and fair spreads.
And for retail traders, alternative options such as OTC are often unavailable.
For institutions however, sometimes exchanges are not the best route, particularly when engaging in large swap trades where the counterparty is known
Partially this is down to privacy, but also it is because institutional trades with a higher than average value can move the market, making it more difficult to secure a steady price.
In those instances, exchanges can prove tricky, and so many institutional investors have instead opted to conduct their crypto trading through channels such as Telegram.
While this can alleviate some of the issues that come along with exchange trading, it also throws up a host of issues around security, time of settlement, and more.
Qredo offers a more secure and direct means of settling peer-to-peer (P2P) OTC trades using atomic swaps, underpinned by our decentralized Multi-Party Computation (dMPC) algorithm.
Here is how Qredo offers a better structure to conduct private trading without the risks involved in the current way of doing business.
This service is open to both institutions and retail traders, opening up professional-grade custody for all users and helping to level the playing field across the board.
Using Qredo, you can instantly engage in P2P atomic swaps across a host of cryptoassets, with the transaction secured by the network and minimizing the risk of information leakage.
If you know the crypto wallet details of your counterparty, you can easily enter those details on the Qredo platform and trade directly.
If not, the trade can still be completed without requiring that information. You can trade P2P by setting up the trade on Qredo and then sharing a secure link, allowing for off-exchange trading through our secure network.
This helps address the potential pitfall associated with counterparties failing to deliver the assets, as the exchange is only possible if both parties agreed to accept the transaction.
One of the main bugbears that people often cite when trading cryptoassets is the long time it takes to fully settle transactions.
In some cases the time – and often cost – of settling a simple transaction between two familiar counterparties can make it prohibitive to finalize the trade.
Qredo runs on a Layer 2 blockchain infrastructure, which helps to address the scalability and cost issues which can hamper the usability of traditional platforms such as the Bitcoin chain.
Spreads on trades – the difference between the price bid for an asset and that which is being asked – is one of the most important factors weighed up by participants.
The bid/ask spread is often a function of liquidity. When there are fewer buyers or sellers willing to make a market on a trade, the spread can widen, leading to a worse deal for the parties involved.
Through OTC deals, price is agreed and so buyers and sellers can engage trading safely in the knowledge that they are getting a reasonable rate for their assets without the risks of wider spreads through order books at exchanges.