The Bitcoin Lightning Network Is Creating Efficiency For Traders

The Bitcoin Lightning Network Is Creating Efficiency For Traders
фото показано с : bitcoinmagazine.com

2021-12-16 04:00

The ability to quickly move bitcoin over the Lightning Network allows traders to expose themselves to minimal third-party risk.

The below is a direct excerpt of Marty's Bent Issue #1130: "The Lightning Network is creating efficiency for traders." Sign up for the newsletter here.

via Kollider

Here's a great blog post from the team behind Kollider, an exchange that allows traders to trade bitcoin using leverage. In it, they dive into the typical needs and workflow of margin traders who have positions on multiple exchanges at the same time, how they operate natively with on-chain bitcoin transactions and how using the Lightning Network changes those operations and makes them extremely efficient. I highly recommend you freaks check out the post if and when you get a chance.

As you can see from the screenshot above, due to the nature of the type of instant settlement that the Lightning Network can provide in comparison to on-chain transactions, the amount of sats a bitcoin algo trader needs to hold on an exchange as a margin buffer is reduced significantly from 30% of value at risk to 5% of value at risk. The ability to quickly move sats over the Lightning Network from a wallet owned by a particular trader or trading fund to an exchange allows these traders to expose themselves to as little third party exchange risk as possible. And as you'll discover if you read the post, this 5% buffer is even a bit conservative as it factors in potential channel liquidity issues that could arise if many traders are moving a lot of sats during periods of high volatility. The margin buffers could get even smaller if fears over a channel liquidity are able to be quelled by increased liquidity on the Lightning Network, which seems to be coming every day.

Right now, intra-exchange activity via the Lightning Network is a very small percentage of overall intra-exchange activity. As time moves on, as the Lightning Network continues to mature, and as traders become more well versed on how to manage their funds over the Lightning Network we can expect more and more traders to begin leveraging this utility. Increased usage of this utility should have some positive externalities that include lower fees for traders (which means higher margin - at least temporarily as the rest of the trading world gets caught up to speed), and less third party risk which comes with holding funds on an exchange. The Lightning Network is enabling traders to hold less and less sats in a third party wallet while still reaping the same benefits of the trading platforms that they would when doing intra-exchange arbitrage via on-chain transactions.

It will be fun to watch this area of the market develop in the coming years.

Onward!

Similar to Notcoin - Blum - Airdrops In 2024

origin »

United Traders Token (UTT) на Currencies.ru

$ 0.0223715 (+0.47%)
Объем 24H $235
Изменеия 24h: 23.70 %, 7d: 34.69 %
Cегодня L: $0.0223715 - H: $0.0223715
Капитализация $0 Rank 6130
Цена в час новости $ 0.0711024 (-68.54%)

traders network bitcoin lightning expose allows minimal

traders network → Результатов: 126


Фото:

Cryption Network Raises $1.1 Million In Latest Private Funding Round

Cryption Network, a crypto platform built for retail traders, announced it had completed its private funding round, which raised $1. 1 million. The funding round attracted numerous investors, including CMS Holdings, GravityX Capital, Master Ventures, GenBlock, Ascensive Assets, X21 Digital, AU21, WaterDrip Sandeep Nailwal of  Polygon, and Humayun Sheikh of Fetch.

2021-5-26 20:38


Despite Bitcoin's $1B shorts liquidations, why does the narrative of a price rally stick?

After recovering from the aftermath of the $1 billion shorts liquidation in Bitcoin, traders have now been hit with increased activity on the Bitcoin network. The supply shortage narrative may still bThe post Despite Bitcoin's $1B shorts liquidations, why does the narrative of a price rally stick? appeared first on AMBCrypto.

2020-12-26 23:30


Фото:

Research: Bots May Be “Front Running” Traders on Ethereum

New research released last week claimed the Ethereum network is susceptible to “frontrunning” bots picking off traders on the network. Frontrunners Running Amok Called “Ethereum is a dark forest,” the paper was published by Paradigm researchers Dan Robinson and Georgios Konstantopoulos and focused on the rise of decentralized exchanges (DEXs) and bots on the EthereumRead MoreRead More.

2020-9-1 22:07


Bitfinex Launches Pulse on Mobile

Bitfinex, a state-of-the-art digital asset trading platform, has launched Bitfinex Pulse on mobile, enabling the exchange’s growing user base to obtain market-moving information on the go. Bitfinex Pulse is a social network tailored to meet the needs of crypto traders, providing Bitfinex’s growing customer base with the opportunity to leverage the exchange’s community to get […]

2020-8-1 23:14


Фото:

Traders Can Now Make Bets On Bitcoin’s Hashrate With New BTC Hashrate Futures Offering

Crypto derivatives exchange FTX will be issuing futures linked to the hashrate of the world’s leading cryptocurrency, bitcoin (BTC). FTX Now Has A Derivatives Contract Offering Investors Exposure To BTC’s Hashrate Hong Kong-based exchange FTX has unveiled a new product for bitcoin enthusiasts to leverage the coin’s booming network: hashrate futures calculated using the average […]

2020-5-16 20:24


Bitfinex Launches A Social Network, Giving Traders a ‘Pulse’ on the Latest Market Insights

Major crypto exchange firm, Bitfinex has launched a new social network for its users. According to Cointelegraph, the exchange platform is seeking to take advantage of the social network craze. The new social network is dubbed Bitfinex Pulse and users will now have a chance to trade, collaborate on different concepts as well as various market […]

2020-4-28 23:40