Thomson Reuters Partners With Startup for Next Level Derivatives Exchange
Thomson Reuters (TR) provides trusted data and information to professionals across the legal, tax and accounting, and news and media industries. Operating in more than 100 countries, TR lists its shares on both the New York Stock Exchange (NYSE) and Toronto Stock Exchange (TSE). The company has now expanded its scope and entered into the realm of blockchain technology and artificial intelligence (A.I.).
Last month, the peer-to-peer (P2P) blockchain startup Level01 announced its collaboration with TR in order to create a “derivatives” exchange that would change how parties interact with one another, without the fear of losing funds to unknown third parties.
Level01’s proprietary platform, a peer-to-peer (P2P) derivatives exchange, allows investors to trade options contracts directly with one another, without requiring an intermediary or broker.
A “derivative” is a financial security that holds a value reliant upon or derived from an underlying asset or group of assets. An “exchange traded derivative” is a financial instrument that trades on a regulated exchange and whose value is based on the value of another asset.
In the world of blockchain, making it a decentralized peer-to-peer platform changes the game.
“At its beginning stages, we were looking at both Bloomberg and TR,” Jonathan Loi, the CEO of Level01, told Bitcoin Magazine.
“From our perspective, TR proved to be a more competent and receptive company because the individuals we were in collaboration with went the extra mile to ensure things were done moving forward.”
How Does It Work?
Combining distributed ledger technology (DLT) for transparent and automated trade settlement on the blockchain with A.I. analytics provides fair value pricing to counterparties that is based on current and retrospective market data.
Consumers and investors, however, are constantly at war with fund deposits/withdrawals, multiple tier-identity verifications and wallet security.
By implementing this new platform in collaboration with TR, Level01 hopes to remove this friction and allow investors to focus fully on their trading activities.
“Level01 utilizes TR’s data feeds as a trusted source for its A.I. deep-learning algorithms, providing real-time pricing analytics on derivative contracts,” Charles Wong, the chief marketing officer of Level01, explained to Bitcoin Magazine. “Additionally, the data is also used to ensure transparent, timely and accurate settlement of derivative contracts upon contract maturity.”
“We have painstakingly designed a UI that caters for both simple and advanced users. More importantly, new investors using Level01 are assured of the fairest market pricing: e.g. prices coming directly from main industry players like Thomson Reuters and open for all to view at ‘interbank’ rates. New investors are then able to make informed business decisions based on this real-time data, cognizant of sudden spikes or changes in the market.”
According to Thomson Reuters, this is more than just a collaboration with Level01.
“Fundamentally, what we do is supply the non-core technology that helps connect Level01 to the market, plus fundamentally supplying the data that feeds into the machine,” said Michael Go, Thomson Reuters’ Asia Pacific head of trading markets.
“We are the leader in this field and beyond this collaboration, we are taking in crypto-related information, platforms, and exchanges, while diving into blockchain technology.”
“When we are talking about ‘investors,’ it’s important to identify them as ‘institutional investors,’” Loi emphasized.
“These institutional investors that invest in larger amounts can assume roles of ‘liquidity providers’ within the platform. A function of the Level01 platform allows staking of the native token, Level01 Exchange (LVX), to host ‘Trading Rooms’ where the host earns commissions from providing the group trading functionality. Since these tokens are staked and cannot be used/exchanged for long periods of time, this reinforces the pricing of the LVX token by reducing sell pressure from the markets.”
According to the company, Level01 has already begun its plans of launching the public beta version of the platform.