Flovtec is a liquidity provider and the latest company from entrepreneur Anton Golub. In his previous life, Anton was a high frequency trader and market maker in the FX markets. Then in 2013, he found himself ‘in the right place at the right time’ and co-founded Lykke, a semi-decentralised digital asset exchange.
Lykke was one of the first blockchain companies to launch in Switzerland. From this early experience it was clear to Anton that liquidity was going to be an important piece of the rapidly growing token ecosystem. Fast-forward six years and Flovtec is open for business. Anton has drawn on his wealth of trading experience to create liquidity provision for exchanges and issuers of digital assets.
If you don’t know, liquidity is the ability to buy or sell an asset at any given time, without causing a drastic change in price. Liquidity providers, sometimes also referred to as market makers, enable this, by making sure there are constant buy and sell orders in the market. The service features are tailored towards client requirements and include constant bids and asks, narrow spreads and deep order books, something the digital asset markets still badly lack. I chatted to Anton to glean his perspective on the industry past, present and future.
‘The transition from 24/5 to 24/7 trading has been part of a natural evolution, it more adequately reflects how we live day to day.’ Anton explains; ‘We run liquidity provision infrastructure 24/7, but it is not a world that’s easily understood by the wider audience, yet. In fact, the digital asset community underestimate rigid views from the ‘traditional finance’ world, how much lack of understanding and fear results because of that’.
Perhaps because of this, Flovtec has taken care to develop an operating model that complies with the Swiss regulatory framework, to ensure it operates within tight risk frameworks in order to reach a wider audience. The company is also preparing to launch its first investment product within the next weeks. Investors will be able to deploy capital into proprietary investment strategies to get exposure to digital assets, whilst being shielded by a proper risk management .
With the decentralised ecosystem creating its own liquidity of DeFi platforms such as Curve and Uniswap, DeFi is making headlines at the moment but does this trend spell the end for centralised liquidity providers? Anton has an eye on the evolving space but a very clear answer: No.
’DeFi shows that you don’t need exchanges – the gate keeper and token issuer can be sidestepped – now anyone can swap assets anyway they like and that’s an interesting development. However, providing liquidity is actually really difficult and a lot of these projects are at early stages, both from a pricing perspective and in terms of speed.’
‘If you are coming from markets where trades operate in milliseconds, you have to wonder where the market is going over a slow blockchain with smart contracts?
It’s like playing poker, but you show your cards before the flop comes in. When it comes to showing a good and fair price it has to be low latency, fast infrastructure.’
‘In the future centralised liquidity provision firms could well bring their technology and trade against these protocols and either demolish them or force change.’
With all the activity around digital assets, 2020 is starting to look a lot like another 2016 and that can only be a good thing for the ecosystem as it matures and expands.
To find out how to make your token or exchange more liquid, or to find out more about Flovtec’s investment products, visit Flovtec.com and stay liquid!