Liquidity Network : The gateway to A Fast, Secure cryptocurrency Exchange on the Blockchain

An oppurtunity to realise the Satoshi dream of a fast, scalable blockchain

As if the anonymity of the wrily man behind the invention of the blockchain has not proved effective enough to discountenance any doubt one has about this technology in the first place; then its impact on the financial system within the first decade of being introduced should prove a point to the naysayers that this technology has come to stay. But the question on every ones lips is, how far??

Is Private Channel the way Forward?

Those who are yet to believe in this project has a point, lets take a look at it

• Blockchain is too slow for making instant payments
• Blockchain is too costly to run for a single entity as private blockchain
• Transaction fees is not a big let off when time and speed is a big factor

However, one can not take away the good characteristics such as security and user control. Which is why new solutions are geared towards finding new concepts to build an efficient network around the blockchain. In this search, came Private Channels; A subtle way of maintaining a 2-party ledger system in an off-chain fashion; which means that private channels in a nutshell ensures users benefit

• Low cost transaction
• Better transaction throughput
• Drive a Scalable network for all

The Status Quo

Some developments in the way of private channels can be found in projects like Lightning Network for bitcoin blockchain and Raiden for Ethereum blockchain. However, they have a limitation when the channels resources is depleted since the rebalancing scheme takes the transaction on-chain. Consequently, this on-chain transaction attracts

• high cost; Atleast two expensive on-chain transaction is needed
• Poor Routing topology; since channels needs to be closed and refunded on-chain once resources are depleted making the whole network less redundant.

A Better Proposition

Liquidity Network

Liquidity Network is a secure, private payment and exchange channel based on the Ethereum blockchain. Their aim is to drive a fast, scalable, decentralised exchange and payment network.

The two(2) major components of the Liquidity Network protocol are

• Establising a peer-to-peer off-chain communication
• An on-chain enforcement mechanism (in case of dispute)

The Solutions

• No-Cust Hub Architecture

No-Cust is the acronym for Non- Custodial and it simply ensures that the network could run in an off-chain mode while it ensures

[1] Users have custody of their accounts hence private key without fail when performing off-chain transactions .

[2] Users have the licence to remove their funds from the hub's smart contract without the knowkedge of the hub operator.

• Revive Protocol

Introduced inorder to avoid transactions from being hosted on-chain. Via the help of the linked-payment network, it is able to rebalance depleted channel in off-chain mode.

This approach helps to solve the problem of

• high costs associated with on-chain transaction
• Relieve the blockchain work threshold and reduce blockchain congestion by hosting most transaction privately except when needed (in case of dispute),
• Build a network of redundant and highly scalable payment channels.
• Ensures micropayment transactions via the channels

The Universal hub Framework

Liquidity Network Architecture

This framework is based on the concept of Non-Custodial universal hubs formed from a network of payment channels. It is comprised of

Liquidity Network server ; managed and maintained by the hub operator While it
Liquidity Network Smart Contract : The smart contract is introduced inorder to avoid counterparty risk.

Therefore, utilizing this framework for an underlying blockchain will make the network to realise the benefits of

Benefits of Hosting on Liquidity Network

• Privacy; Blockchain maintains its users anonymity at best. However, hosting on Liquidity Network ensures users transactions are fully private without leaving any trace for those who desire it

• Redundant Network; Liquidity Network ensures instantaneous transaction since it is able to utilize already used channels to refund a depleted channel without on-chain transaction.

• Better Costs benefits; Since the need for on-chain transaction is removed, it leaves the possibility for micropayments which are feasible in a zero-cost network like Liquidity Network.

• Scalable and secure ;

The decentralised nature of the Liquidity Network ensures it remains secure while it remains open for new users to join and exit freely without affecting the overall performance of the network or underlying blockchain.

Application

Liquidity Network Exchange

One of the very first applications based on the Liquidity Network network, decentralised in nature, although its operation doesnt depend on the blockchain. Some characteristics which makes the project interesting are

• Low Setup Cost
• Low Maintenace Cost
• Ability to handle multiple users per hub

In the Spotlight

• Payment and Exchange Characteristics
  

• Market Feasibility
  

• Generic Features
  

• Vs Other Exchanges

• Vs Other Off-chain solutions

• Vs Other Payment solutions

Use Case

Influencers Economy

Image credit

Social media influencer is one of the common commodity in this present era. And one of the challenges that they face is poor compensation plan for the work that they do in promoting a product or business since most the process are manual at best

However, Liquidity Network with its micropayment feature via the help of smart contract will render the process automatic while they get compensated in a fast, trustless manner, effectively sacrificing the old system that can be manipulated or controlled. Users also do not need to worry about the security of their asset

Roadmap

Meet the team

Watch this video