About HiveEx Dark Pool

Published on
August 7, 2018
We aim to bring a layer of trust to the trading of tokens that hasn’t been seen in the crypto space thus far.

A liquidity service for pre ICO allocations SAFTS and all tokens where discretion is paramount.

What is a dark pool?

A dark pool is a private venue for trading, buyers and sellers place there bids and offers into the pool, however they can't see any of the other orders. The trade will complete when another participant places an order that matches their own. This ensure that the trade remain confidential to each party and the larger marketplace as a whole.

How does a dark pool OTC trade work?

A buyer places a bid for a certain token or SAFT and that is placed into the pool.

A seller places an offer for a token or SAFT into the pool.

A trade is matched when the prices and quantities overlap.

Who can do a dark pool OTC trade?

Anybody can trade in a dark pool however they are generally reserved for larger trades the HiveEx dark pool will initially have a minimum trade size of 50k USD and that is likely to be revised higher.

How much does it cost?

This will spend on the complexities of the deal and what structuring and other services need to be arranged to facilitate the deal safely, we fees in the range of 2.5% to 5%.

How long does it take to do?

Potentially trades can be instantaneous if you place an order into the pool that has a matching counterpart the deal can be done on the spot. It typically will take longer though as the deals we are anticipating to see using this service will be large and potentially exotic.

How is the price of the coins agreed upon?

Each participant sets there own price a buyer tells us the price they are willing to pay and a seller tells us the price they are willing to accept. These may be revised higher or lower over time to increase the likelihood of a deal or to adjust to changing market conditions.

How fast can I get my tokens or my cash?

This will range from instantly to long periods of escrow depending on the nature of the deal and how long it may take to deliver the tokens to the other party.

We aim to bring a layer of trust to the trading of tokens that hasn’t been seen in the crypto space thus far. A problem exists in the transacting of allocations that are yet to vest, SAFT’s that people would like to on sell either in part or whole. In addition, other tokens where discretion is required due to the many reasons that may see people not wanting to be known to be transacting at a particular end of a deal.

We aim to offer a service where we negotiate and create an opportunity for buyers and sellers to post trades in a marketplace that is owned and operated by a company with a large and trusted presence in the space. Backed by a global parent company in the technology and marketing industry.

How do we get the deals at HiveEx?

We have experienced traders that have unparalleled knowledge and contacts across the Cryptocurrency and blockchain landscape.  

We aim to offer a service where a buyer of a token that may or may not exist yet can place an offer in our marketplace they can sign legally binding agreements with us to facilitate this process and we will then seek to fill this order without ever revealing the counterparts to each other.

This also works for people looking to purchase a deal that they may have missed out on, or that they weren’t able to get as much of as the desired, through the sometime tricky process of ICO allocations.

We will provide trust to the market in a number of ways:

· We are one of the largest and most trusted global investment service companies in the blockchain and cryptocurrency space. Backed by a global brand with a strong balance sheet and presence in the world of finance.

· We also propose to use a series of safeguards for both buyers and sellers to incentivise them beyond simply signing agreements. This counteracts the risk somewhat that one of the parties may try and walk away from a deal if circumstances were to change.

· A buyer will be required to pay the principal amount of the purchase price that will be held by us in our secure escrow service. This ensures the seller of the token / SAFT is protected as we safely have the purchase consideration with us, which will then be released on completion of the deal.

· We will require the seller of the token / SAFT to post a margin with us that will be similarly held in our secure escrow accounts. This prevents the buyer from walking away from a deal in the event of a favourable price appreciation of the tokens they have already sold. We are proposing that depending on the deal, a margin be posted of between 20% and 50% of the consideration / deal size. This will be further enhanced by our in house and external legal counsel creating a best in class legal contract for the facilitation of these deals.

We feel we are well paced to facilitate this service with our extensive global client base and operating footprint. We are constantly seeing deals in the industry and have already been able to facilitate trades in a trusted environment while maintaining the utmost discretion around the clients needs.

While this type of service lends itself particularly well to the more complicated deals that arise where people are selling before issuance of the token, or trying to sell a SAFT in part or in whole, it also lends itself well to people that want to place large orders in listed tokens that want to maintain their privacy. Through our service we can move large amounts of tokens in multiple tranches to different parties without ever making it known who is selling what or how much.

This is a concept that has worked well in traditional finance and we feel hasn’t been successfully replicated in the cryptocurrency space. It lends itself particularly well to the type of trading mentioned above and we feel it is a service that will meet our clients needs well.

We have already had some great feedback from industry leaders that this is a service that can considerably boost and de-risk aspects of their business.

We look forward to rolling this out across our network as the first of many ground-breaking and novel risk management products offered by HiveEx, in our endeavour to provide a full scale investment and banking service to the blockchain industry and those around it.

Written by
Tobias Abbey
Head of Investment / Banking services

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Level 10, 99 York St, Sydney, Australia
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Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies and ICOs are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own independent legal, tax and accounting advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision.