While looking at the structure of cryptocurrency exchanges and learning about blockchain, serial entrepreneur Rosario M. Ingargiola realized a potential innovation that could transform the industry for the better. He recognized how a properly architected blockchain-based infrastructure, coupled with key market infrastructure and services, could be leveraged to provide a new way of facing counterparties without credit and settlement risk. “This was not only possible, but preferable, and sorely needed in the real-world asset trading arena, as well as in the crypto market,” Ingargiola recalls. The prospect of creating a market utility that vastly increases connectivity across disparate market participants without intermediaries, with safety, transparency and reduced risk, friction and cost, laid the foundation of OTCXN and is what continues to drive its passion for innovation.
OTC Exchange Network (“OTCXN”) solves the biggest problems in the largest markets using proprietary blockchain technologies developed from the ground-up for high-performance enterprise applications. By leveraging its own purpose-built blockchain stack, OTCXN reduces risk, friction, cost, and eliminates the need for traditional intermediaries and trust. It does so by organizing the world’s liquidity and democratizing market access through the first and only P2P network with an end-to-end, provable trade-to-settlement lifecycle for the institutional trading of spot FX, cryptocurrencies, and other digital assets.
Tackling the Initial Hurdles
Like any other start-up company, OTCXN has had to overcome challenges concerning acceptance and recognition of its mission during its initial phase. The first two years of operation saw the company quietly, yet effectively, write code and gradually build customer support. In a world awash with hype and buzzwords, OTCXN has successfully met the challenge of differentiating itself in a very complex and highly technical vertical to attract top talent and leading global investors, not to mention the company has already signed up a number of early adopters for its product launch and live trading, slated to occur in early 2018.
Its early focus on nurturing a culture of innovation to solve the hardest problems has made it possible to attract strong talent to the company. Additionally, OTCXN placed an early emphasis on establishing a strong and credible management team, thereby making it possible for the company to position itself optimally, even as challenges present themselves. Talking about OTCXN’s key strengths, Rosario mentions that the ability to quickly adjust and align to threats and opportunities, is what has surged the company to great heights.
Meeting the Needs of Financial Institutions and other Industries
OTCXN offers its enterprise-class blockchain fabric, designed from the start with emphasis on performance and speed, privacy, and security characteristics, to meet the needs of financial institutions and other industries in building global scale solutions. Another unique part of its solution set is a Cryptographic Database, which supports the capture of very high-frequency data while maintaining a cryptographic event lineage of this data, which can be directly linked to transactions on OTCXN’s blockchain network. This data can be system data, such as FIX order messages and market data, as well as client data, such as algorithmic trade decisioning, which remains private to the client but allows for provability for compliance and regulatory reporting use cases.
“Our total solution is built with true institutional-grade exchange technologies and includes our OTC block trading (RFQ style), lit pool, dark pool, execution algorithms and order types designed to maximize all these liquidity sources while minimizing market impact and eliminating counterparty and settlement risk – available behind a single, high-performance FIX API,” Ingargiola mentions.
Making the Industry Better
OTCXN exponentially increases the number of eligible trading counterparties and reduces the systemic risks that occur, with the concentration of credit and risk at a small number of Prime Broker banks or Exchanges. “Our model of digitizing collateral held in safekeeping at a custodian greatly reduces risk to client assets and brings provability to all transactions, even trades on a crypto exchange, which is critical for institutional asset managers who want to deploy funds in the crypto space and have to provide assurances to auditors and fund administrators, besides regulators,” mentions Ingargiola.
This level of transparency and provability, coupled with smart contract-based enforcement of the rules of engagement, protects trading entities from counterparty and settlement risks, as well as prevents market manipulation and unfair practices, to deliver full transparency and best-in-class execution. The cryptographic database provides the ability to do analytics and regulatory reporting with full provability. All of this makes for a more mature and well-functioning liquidity landscape in both real-world assets and the burgeoning crypto and digital assets markets.
Bringing-in Experience that None can Substitute
A serial FinTech entrepreneur with a focus on blockchain-based P2P trading networks, Rosario M. Ingargiola, the CEO and Founder of OTCXN, has leveraged his 15 years of experience to spearhead the company towards success. His experience spans across designing and developing large-scale, real-time enterprise trading systems used by global investment banks, hedge funds, brokerages and energy companies. Rosario has designed and brought to market two award-winning enterprise trading technology platforms including a multi-asset algorithmic trading platform and a sophisticated, front-to-back FX exchange platform used by Tier-1 institutions to run their e-FX businesses. Rosario has authored numerous articles related to financial markets trading and technology for major industry publications.
Delivering Unrivaled Benefits to Customers
The blockchain technology of OTCXN provides an immutable cryptographic audit trail coupled with smart contract capability, multi-signature transactional support, stateless verification, need-to-know data privacy, and other related technologies, making it possible to create new ways of transaction across trust and organizational boundaries. Besides the aforementioned benefits, one of the most powerful aspects of the company’s technology is the integration of non-repudiation mechanisms that gives rise to provenance authenticity, thus creating a provable value ledger.
Putting this into plain English, Rosario explains, “Imagine a marketplace where you keep collateral in your own bank account; your collateral is reserved for trading activities within the network. At any point in time, including during real-time order matching, the existence of your collateral can be proven.” In addition, transactions are automatically and programmatically enforced based on the codified rules of engagement, and include all necessary metadata as needed (such as FIX message activity). “In short, a P2P trading network where you need not trust the network operator nor trust your counterparties, while not requiring credit, settlement, and other intermediaries.”
OTCXN does this without requiring a technical integration effort by either of the main actors in its network – Custodians and Trading Entities – making adoption easy.
The company’s core value proposition is to organize the world’s liquidity and democratize access to wholesale liquidity by eliminating that credit gap with a purely technological solution, making it possible for any trading entity to face any other trading entity directly, without counterparty and settlement risk.
It’s not an Exchange
OTCXN is not an exchange – it’s a blockchain and capital market infrastructure company with a next generation, multi-ledger architecture and comprehensive, institutional-grade trading technology stack. Its ground-up implementation and unique approach makes it the only high-performance blockchain network that does not trade any of the guarantees blockchain provides to achieve its market leading performance. OTCXN uses this technology to deliver the only end-to-end provable P2P trading network that supports trading of digital assets, and it’s the only solution that supports cross-exchange clearing and settlement in the crypto space, as well as riskless, off-exchange OTC transactions.
A Future of Continual Expansion
In the near future, OTCXN will gradually increase its reach by supporting trading in many other asset classes and across the entire digital asset spectrum, as it continues to organize the world’s liquidity and connect more market participants than ever before. With blockchain technology widely expected to change the foundational infrastructure across capital markets and many other verticals, OTCXN is well-positioned to be a leading provider of high-performance and scalable blockchain infrastructure for any private or semi-public enterprise use-case. The company is proving this out by supporting high-frequency trading in the most demanding markets.