Legolas to Bridge Gap Between Financial Industry and the Crypto Community
Legolas, a centralized cryptocurrency exchange aims to use blockchain technology in exchange operations to increase transparency and restore investor confidence.
There’s a lot to be gained from investing in cryptocurrency.
Just last year, major digital currencies like Bitcoin and Ether saw astronomical increases in value, and are still worth many times more than they were 12 months ago. Anyone who bought Bitcoin at the beginning of last year would have increased their money by more than ten times.
It seems like a no-brainer. But there’s still a gulf between traditional finance and cryptocurrency. It’s a public feud — with multiple occasions where respected financial figures have outright attacked the cryptocurrency market.
Despite proving to be extremely lucrative, cryptocurrency is still viewed with uncertainty and even hostility by the financial industry.
Apart from negative media reporting, there are other reasons for this suspicion. Cryptocurrency exchanges have been the victim of some high profile hacks in recent times. In January 2018 a Japanese exchange called Coincheck was hacked and $420 million worth of cryptocurrency was stolen.
It echoes a similar disaster in 2014, where the exchange Mt. Gox lost $350 million in a reported attack.
The sad truth is that existing cryptocurrency exchanges are just not secure enough for established traders. Every time an event like this takes place it deters potential investors and makes the whole cryptocurrency market seem unsafe.
And there’s more. Most exchanges suffer from weak, unreliable authentication mechanisms. They rely on simple, easily breached security systems and often leave users locked out of their own accounts.
To make matters worse, large transactions are difficult to process on these exchanges. There are price limits, transaction fees, and commission. Sometimes, hefty transactions will be blocked by banks.
Then there’s the problem of front running. This is where investors take note of big planned trades and secretly get in there first; buying the stock they know is going to jump in value. Although this practice is heavily regulated and prevented in traditional banking, cryptocurrency is a different story.
Because of its natural anonymity, crypto exchanges can easily ‘jump the queue’ before a client makes a large trade. They benefit from foresight, plus higher fees from the client after the crypto value increases.
The lack of transparency and the ease with which exchanges can do this is a massive turn-off for potential large investors.
So what’s the solution? How can the crypto market become transparent and credible enough to attract investors from the world of traditional finance?
A company called Legolas could have the answer.
Legolas is a centralized cryptocurrency exchange that uses decentralized blockchain technology to increase transparency and fairness.
The project aims to attract investors from the financial industry, by maximizing security and acting as a credible and financially reputable way to trade cryptocurrency.
But how can it achieve this? Legolas is working with a number of regulated financial firms, including Makor Securities. They’ll ensure clients’ fiat deposits are stored safely in a major global bank, reducing worries about hacks and breaches.
Legolas will also move away from simple ‘username and password’ logins, and rely on more complex and secure authentication methods for its users.
It also aims to tackle the issue of front running in crypto, by using the blockchain technology that underpins all cryptocurrencies.
This works quite simply — a blockchain is an immutable ledger, which means any information added to it cannot be altered. Once an order has been made, it will be engraved permanently in the blockchain, and after that it will be impossible for anyone to change the sequence of orders.
In other words, opportunistic traders will not be able to insert their own order ahead of a client’s. This removes the threat of front running — a major barrier to would-be investors in the current market.
Solid backing and a bright future
Legolas also brings credibility in the form of an impressive team. CEO Frédéric Montagnon sold his previous company, Teads, for 300 million euros last year. He’s joined by a formidable set of advisors including Elie Galam, a Harvard educated mathematician who manages his own hedge fund with over 70 traders in the U.S. and Asia. Other advisors include several hedge fund managers and brokers.
So what could Legolas achieve in the future? It looks highly promising, and could change the face of crypto trading.
By bringing more credibility to the world of cryptocurrency, Legolas could help bridge the gap between this market and a wary financial sector. By building a solid platform for exchange and working hard to minimize the risk of fraud and security breaches, Legolas could encourage hesitant traders to make the move to crypto.
And that would mean an enormous new market and huge amounts of investment. It would also strengthen cryptocurrency’s reputation, and help the market be taken more seriously in the world of established finance.
Perhaps the most exciting part of all is that the project will run on blockchain — helping to boost cryptocurrency’s safety and reputation using its very own technology.