The Digest. September 2024

• The “taker” speed bump enhances market integrity;
• Q3 2024 Update: Institutional OTC volumes up 79% year-over-year;
• RFQ execution launches, establishing Finery Markets as the first hybrid crypto ECN;
• A2ZCrypto leverages Authorized Trading for delegated and efficient client transactions;
• Partnership with Stillman Digital expands liquidity options for institutional clients
• Gold-i CEO Tom Higgins discusses crypto trading tech on The Flow podcast.

Enhancing market integrity with toxic flow protection

At Finery Markets, ensuring a fair and reliable trading environment is a top priority. From day one, we have taken a step toward enhancing market integrity and protecting its liquidity providers by implementing a “taker” speed bump, which is now set at 100 milliseconds.

This brief delay helps shield liquidity providers from the adverse effects of toxic, potentially disruptive trading flows, allowing them to maintain tighter bid-ask spreads by primarily exposing them to stable, institutional flows.

Toxic flow refers to aggressive trading strategies that can exploit market inefficiencies, often leading to increased volatility and wider spreads. The speed bump acts as a buffer, allowing liquidity providers to adjust their quotes and manage risk more effectively, thereby contributing to a healthier market ecosystem. Combined with Finery Markets’ recent server migration to AWS Japan, these enhancements boost performance and strengthen the platform’s market integrity.

Institutional OTC volumes show sustained growth in third quarter

Finery Markets saw a remarkable 79% year-over-year increase in customer transaction volumes through our institutional OTC trading infrastructure in Q3 2024. This milestone reflects the continued trust of our clients and our dedication to improving our trading solutions.

This quarter also marked the launch of a strategic partnership with Nonco, a top-tier digital assets firm. Nonco has joined our expanding roster of liquidity providers, serving as a market maker for cryptocurrencies and stablecoins. The first successful transaction was executed via FM Liquidity Match, showcasing the strength of our platform’s deep liquidity.

In line with our commitment to performance, we completed key infrastructure upgrades and introduced significant product features designed to meet the evolving needs of institutional traders. These enhancements have bolstered our position as a leading provider of comprehensive trading solutions, offering both order-book and RFQ execution methods.

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Expanding Execution Options with Request-for-Quote (RFQ)

Navigating large trades or illiquid assets in the crypto markets often requires flexibility. To address this, Finery Markets has introduced a new Request-for-Quote (RFQ) execution method, offering institutional clients a valuable alternative to traditional order-book trading. Our hybrid ECN model integrates both order-driven and quote-driven markets, allowing users to choose the best approach for their trading needs.

RFQ enables clients to receive quotes from multiple liquidity providers, minimizing market impact and securing optimal pricing. This feature adds to Finery Markets' robust trading infrastructure, creating new opportunities for more strategic trade execution, especially in challenging market conditions.

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Order-Driven and Quote-Driven Markets: Meet the First Hybrid ECN

With the introduction of the Request-for-Quote (RFQ) execution method, Finery Markets has become the first hybrid crypto ECN, blending both order-driven and quote-driven markets into one platform. The RFQ feature complements the existing order-book execution, providing institutional clients with the flexibility to choose between firm liquidity in the order book and quote-based transactions for larger or less liquid trades.

This hybrid approach, long valued in traditional financial markets, enhances trading options and allows users to tailor their strategy to market conditions. By integrating RFQ alongside firm order-book execution, Finery Markets offers a comprehensive and adaptable trading environment designed to meet diverse institutional needs.

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A2Z Crypto Adopts "Authorized Trading" for Client Transactions

A2ZCrypto has become the first OTC desk to utilize Finery Markets’ new "Authorized Trading" feature, which enables firms to delegate trade execution on behalf of their clients. This feature enhances efficiency by allowing clients to authorize A2ZCrypto’s trading desk to execute trades without needing to interact directly with the trading platform. This approach is particularly beneficial for voice and chat trading, as clients can now confirm deals through messengers like Telegram.

According to Krish Chatterjee, CEO of A2ZCrypto, the new feature offers a streamlined experience with immediate visibility into open positions and spread tolerance management. Authorized Trading empowers OTC desks to handle transactions autonomously, reducing operational complexity and speeding up the trading process. This client-centric approach is set to redefine OTC trading by offering firms a competitive advantage in managing trades with greater flexibility and precision.

The Flow Podcast: Gold-i CEO Tom Higgins on Crypto Trading Tech

In the latest episode of The Flow podcast, Konstantin Shulga sits down with Tom Higgins, CEO of Gold-i, to discuss the evolving trading technology landscape in crypto. With a rich background in FX markets, Tom offers insights into how technology is adapting to crypto’s fragmented market structure and the challenges of providing reliable liquidity and risk management solutions.

During their conversation, Tom and Konstantin explore the rise of prime brokerage models in crypto, which are opening up liquidity access to smaller players, and the complexities of no-last-look liquidity, where market makers must manage rapid price updates without delaying execution. They also consider the future role of on-chain versus off-chain solutions, emphasizing that each approach has distinct advantages depending on the task at hand. For an in-depth look at these topics and more, tune in to this engaging discussion on how trading tech is reshaping the digital asset space.

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