Wootrade ($WOO) is a digital asset liquidity pool that partners with cryptocurrency exchanges, wallets and over the counter trading desks (OTCs). They also have a darkpool trading platform which claims to offer zero (or even negative) trading fees and above average liquidity for spot and futures trading.
Check out our interview with Jack Tan, CEO of Wootrade!
Background
While both automated market makers (AMMs) and decentralized exchanges (DEXs) belong to the decentralized finance (DeFi) sector, they are quite distinct from each other.
There is no limit order functionality for AMM providers such as Uniswap, whilest the trading role of DEXs is more complete and closer to that of a common cryptocurrency exchange. At present, AMMs are extremely popular. They draw more consumers and have rates of exchange that outweigh those of DEXs.
Wootrade collaborates with DEXs as they solve their liquidity challenges using Wootrade. Exchanges would find it easy to draw even more customers by providing more liquidity and delivering more full features. In DeFi cryptocurrencies, standard exchanges have smaller trading rates than Uniswap, and even losing customers, owing to the popularity of the DeFi sector.
Although supporting both centralized and decentralized exchanges to improve their AMM competition, Wootrade has already listed DeFi coins and intends to consistently list more.
Team
It is worth noting that Mark Pimentel, Wootrade’s Co-founder, worked at Citadel and Knight Capital (acquired by Virtu in 2017), respectively. Pimentel initially operated in the high-frequency trading department at Citadel, and then went to Knight Capital’s electronic marketing group in the United States. There, he was in charge of operating the substantial dark pool.
When Pimentel stepped into the crypto ecosystem, he came across a common problem between quantitative funds and exchanges i.e. the market liquidity is fragmented. He aimed to add his trading skills and familiarity with the dark pool to Wootrade. The inclusion of Wootrade’s token economy was intended to make this model more robust, fairer, and more efficient.
What is Wootrade?
Built by industry-leading proprietary trading company Kronos Research, Wootrade provides dramatically enhanced liquidity, spreads, and fees. Wootrade is regarded as the next evolution of crypto trading.
Wootrade features specialized market-making skills based on alpha through collaborations with the world’s top proprietary trading teams. A self-reinforcing and mutually-advantageous dynamic between traders, exchanges, market-makers, and investors all connected by the WOO token has been created by this innovative framework.
Mark Pimentel and Jack Tan, Founders of Kronos Research, had invented the Wootrade concept to address the big pain points for more challenging crypto traders. Kronos Research has evolved from a team of 2 to more than 60 persons now and trades over a billion dollars on a daily basis.
How does Wootrade achieve high liquidity and zero fees?
Wootrade claims to have above average liquidity and zero trading fees, but how do they achieve this?
Taking BTC as an example, at a depth of 100 BTC, Wootrade will sustain a spread of 0.2%. In addition, it does not charge any handling costs or operating costs to users. Kronos Research, a quantitative market research institution, has incubated Wootrade. The fact that Kronos excels in a number of trading techniques is popularly known.
In various market conditions, Kronos has a daily trading volume of more than $1 billion and can guarantee substantial returns. Although Wootrade implements zero-fee trading, retail-oriented exchanges do not generally compete with it. In fact, exchanges or DEXs, wallets, brokers, and trading institutions are mostly Wootrade customers.
Currently, over 10 exchanges and institutional customers are linked to the platform. In addition, through the exchanges that collaborate with Wootrade, a total of more than 65,000 end users have used their trading profile. New exchanges were queuing up for entry after releasing Wootrade 1.0, as market demand surpassed the expectations of the team.
Open governance on Wootrade
The aim is for the group to have more and more autonomy to grow the project as it sees fit. Voting power grows exponentially in relation to the amount of time involved, but anyone who buys tokens only to vote would not have any control over decisions.
Instead, those who have carried for the right length of time will be able to control with the greater weight the choices made. Additionally, the incentive scheme is aimed to enable those with the right combination of talent and expertise to engage more effectively in the governance and decision-making process.
The aim of Wootrade is to reach 40% of the cryptocurrency market’s liquidity. This includes a significant number of exchange customers and market makers to be on board. There is a big market for wealth management businesses on both exchange investors and AMMs on the platform.
Since it’s not easy to check and trust the trading staff, investors sometimes skip good opportunities. Wootrade can, therefore, be fitted with an oracle computer to solve this. This helps market makers to submit their NAVs and results to the blockchain. For its retail customers, exchanges may then verify and pick outstanding items.
WOO token ($WOO)
Wootrade has its own native token that will act as a value and rewards carrier generated by the system. The WOO token will be used to vote on governance decisions concerning the platform. WOO can also be used in staking/mining reward systems, retail users can stake WOO and ETH or USDT into an asset managment product and receive rewards.
For those who are interested in spot/futures trading, WOO can be used as collateral on the Wootrade platform.
Customers can also get a discount when using WOO to pay for say management fees for asset management items. For Wootrade’s clients or partners that do not have their native token, they can also choose to adopt WOO as their platform token. Thereby giving consumers another place to use WOO.
Prime Nodes on Wootrade
For B2B clients they are different tiers to stake the WOO tokens on the exchange or platform for eligibility to become a Prime node. In addition to the staking requirement, they also need to demonstrate a unique marketing plan and business proposition.
Once they become a Prime node, every dollar of flow they route to the network gives them a reward of a certain number of WOO tokens. The concept behind this is that after a while of doing this, they would not need to charge their users and fees and simply scale off the rebates provided by Wootrade.
Essentially, Wootrade’s rationale is that they do not think businesses would try and rely on market makers (which require a huge fee for their services). Especially when the alternative provided by Woodtrade is that they would get access to a zero fee trading network with proven liquidity, AND get paid to trade there.
WOO tokenomics
- Ticker: WOO
- ICO Token Price: 1 WOO = 0.03 USD
- Fundraising Goal: $650,000
- Total Tokens: 3,000,000,000
WOO is available for spot trading on Uniswap, Huobi, MXC and Gate.io
Conclusion
Wootrade sees the potential for conventional and decentralized finance to incorporate concepts. The crypto industry will increasingly be affected by this new technology. The conventional business of asset management will now pay attention to the optimized use of blockchain technologies and token architecture.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
