Liquidity.Network – Due Diligence Report

Pre-sale: 14.2.2018 – 8.3.2018

Public sale: June 14th of 2018

Whitelist: yes + KYC

Hard Cap: 27 000 000

Total supply: 100 000 000

Token allocation: 65%

Token base price: average price in pre-sale Dutch auction = 1429,351 LQD/ 1 ETH

Accepted currency: ETH

Underlying platform: Ethereum, ERC20

Ticker: LQD

Funds: Company

 

Pros

  • Already functioning product – testnet
  • Aiming to solve one of the biggest problems in cryptocurrency space
  • Academic team members with a proven contribution to research in blockchain

 

Cons

  • In near future, it will be only compatible with EVM blockchains
  • The token does not have very strong incentive for the investor

 

77%

 

Team: 4/5

Project: 5/5

Token use case: 2/5

Token Metrics: 4/4

Roadmap: 2/3

Community and marketing: 3/5

Hype: 3/3

 

Description

The Liquidity.Network is a non-custodial, blockchain settlement system supporting off-chain payments (e.g. Ether/ERC20). It is operational under https://wallet.liquidity.network and supports millions of users securely, reducing transaction costs significantly and enabling the mainstream adoption of blockchain. Liquidity is trustless, does not require rigid funds to be locked up, supports off-chain rebalancing, easy routing, and free channel establishment.

 

The Liquidity.Exchange is a non-custodial off-chain exchange. The Liquidity.Exchange is designed to not hold any funds (non-custodial) while performing atomic swaps off-chain. As such the exchange is resistant to blockchain congestion and excessive transaction fees. Scalable to centralized exchange throughput and beyond.

 

Team

Currently expanding their team on positions:

Arthur Gervais, PhD. – Co-founder – Obtained his PhD from ETH Zurich (https://www.ethz.ch/en/the-eth-zurich/portrait.html) on the topic of blockchain security. His academic papers can be found here: https://scholar.google.com/citations?user=jLr_xi4AAAAJ&hl=en  

  • He is also CEO and Founder of Hatforce – Hatforce is a scalable on-demand security services company providing bug bounty security testing services.
  • Co-founder of the smart contract formal verification tool securify.ch – providing Formal Verification of Ethereum Smart Contracts

https://www.linkedin.com/in/arthurgervais/

https://twitter.com/hatforcesec?lang=en

http://arthurgervais.com/

https://github.com/arthurgervais

 

Rami Khalil – Co-Founder – He is about to obtain his Master from ETH Zurich. His academic papers can be found here: https://scholar.google.com/citations?user=0fNsmSQAAAAJ&hl=en

  • Inventor of REVIVE – a decentralized protocol to rebalance payment channels without on-chain transactions.
  • He was part-time Security Software Engineer for Gnosis

 

https://www.linkedin.com/in/rkhal/

https://twitter.com/the_rami_khalil?lang=en

 

George Sedky – Blockchain & Security Engineer – He is a research focussed IT security enthusiast. Finishing his BSc at the German University in Cairo has over 3 years experience in software engineering, designed cyber defense tools.

Previous job positions:

  • Software Engineer at Toptal

  • Information Security Intern at Infineon Technologies

  • Software Engineer at simplerApps Software Solutions Ltd. (BC, Canada)

 

https://www.linkedin.com/in/george-sedky-b0978212a/

 

Guillaume Felley – Developer – He studied at EPF Lausanne and ETH Zurich in Switzerland. He is now finishing his master degree at Imperial College London doing research in the field of Blockchain. He built TLS-N, a blockchain oracle system.

https://twitter.com/guillaumefelley

 

Thibault Meunier – Also he is about to obtain both his Master but from Imperial College London and a French Engineering diploma from ENSEEIHT. Previously at CERN, he rebuilt their main front-end hosting website, an entry point for more than 14000 websites.

https://www.linkedin.com/in/meunierthibault/

 

Janine Videva – She is a FinTech marketing and communication professional since 2016, well connected as former communication associate for a leading Swiss FinTech association. MSc degree in Corporate Communication from USI and a Masters in Digital Marketing.

https://twitter.com/janinevideva

https://www.linkedin.com/in/janinevideva/

 

Mohammed Kasstawi – He is the founding partner of zk Capital.

https://twitter.com/elkasstawi?lang=en

https://github.com/kasstawi

 

Imran Khan – An Advisor and partner at zk Capital.

https://twitter.com/lmrankhan

 

There is one another member of the team – Tony Tran, but we could not find any official profile of his.

 

Project

The Liquidity.Network allows any member of a payment hub, to pay any other member of a payment hub with the allocated funds and it operates with simple routing designs, avoiding the complexities faced by Lightning and Raiden. Also offers instant and off-chain channel establishment, as already operational under https://wallet.liquidity.network. Liquidity is designed such that many hubs can be interconnected in a network of hubs to provide redundancy, similar to a network of Lightning peers. A hub is not a bank nor a custodian. A hub can choose to not forward payments. If that were to happen, the user can simply remove his funds from the hub’s smart contract, which the hub operator cannot prevent. The user would then join another hub.

The Liquidity.Exchange performs instant atomic off-chain swaps without holding user funds and is resistant to excessive on-chain transaction fees. It can still operate under blockchain congestion, provides a more stable and professional service level. Because the Liquidity.Exchange performs the atomic swaps off-chain these are instantaneous and can reach trading speeds of traditional centralized exchanges.  

Multiple Liquidity.Network payment hubs can be interconnected. Similar to traditional payment channels, two users of different payment hubs are eligible to perform off-chain payments across different interconnected payment hubs.

The design of the Liquidity.Network and Exchange are centered around the notion of universal hubs. As such, a user that is joining a hub, can transact his funds with any other member of the hub, instantly, off-chain and therefore at significantly lower costs than regular on-chain transactions. The funds are no longer locked between only two users, but accessible to thousands of other users on the same hub. At the same time, the funds are secured by the blockchain, other users can’t steal other user’s allocated funds.

The Liquidity Ecosystem is currently implemented for Ethereum and enables millions of users and payment processors to exchange crypto.

REVIVE (https://eprint.iacr.org/2017/823.pdf) is an integral part of the Liquidity.Network and allows different hubs to rebalance their respective balances.

The Liquidity.Network is deployed since the beginning of March 2018 on the Ethereum testnet under https://wallet.liquidity.network. It’s fully operational and has shown to work stable. Users can create Liquid Ether from their on-chain Ether and then transmit this off-chain to a recipient. The recipient can forward the off-chain Ether or choose to withdraw the Liquid Ether, to create on-chain Ether. Fully bi-directional transfers, working on Desktop as well as on mobile with Dapp browser apps. Dedicated mobile app under https://mobile.liquidity.network.

The mainnet should be released in the coming months.

Currently, the project is backed and in partnership with Danhua Capital (DHVC), zk Capital, ZMT Capital and YouBi Capital (of those they can openly name)

Token use case

Neither the security nor the usability of the core Liquidity.Network protocol fundamentally relies on the usage of a utility token.

The LQD Token’s primary purpose is to be used to access premium features in the Liquidity. Network (e.g. Service Level Agreements). That is for example to guarantee a particularly high number of transactions per second, the user would need to provide a certain amount of LQD tokens to the hub provider.

End users will not be encumbered with having to interact using LQD tokens in regular usage scenarios but for commercial users and others with high throughput requirements, remuneration for access will be mandatory in the form of LQD tokens.

A core part of the vision for an open network is an open marketplace for payment processing, whereby any hub operator and a commercial user may advertise their payment processing services. The purpose of this marketplace is to strengthen the utility value of the LQD token.

The Token allows the holder to participate in the Liquidity Network – it is an access Token to pay for auxiliary services (e.g. channel monitoring). LiquidChain GmbH plans to operate several Liquidity.Network hubs on top of the Ethereum blockchain building the foundation for instant and cheap transmission of crypto. The Liquidity.Network team will offer to run an auditing service to its users, in case they wish to have added security against 3rd party hubs. Payment for this added value monitoring service will only be accepted in the form of LQD tokens.

 

Token metrics

The Token symbol is LQD. There will be 100 Million LQD Token created, and a fixed 50% of these Token will be sold during the public sale (additional 15% was sold in public pre-sale).

Tokens are sold in a uniform price Dutch auction, which is set up to discover a fair price for a fixed amount of LQD. The Dutch auction allows for everyone to decide the price per token they deem appropriate. All participants receive their tokens at the same final price of the auction.

Participants of the pre-sale were already automatically whitelisted and fully KYC compliant and could participate again.

The team has a green light from the Swiss Finance Regulators (FINMA) to perform light KYC for contributions < 3000 CHF. For contributions beyond, full KYC is required (Video or certified ID/Passport copy).

The tokens will be issued 14 days after the end of the public sale.

LiquidChain GmbH is currently building and pushes the development of the Liquidity.Network and therefore will retain 35% of the Tokens. These tokens are vested linearly over a 2-year period. No funds are directly attributed to team members.

 

Use of the funds from the ICO:

Roadmap

The roadmap on their website is very clear about the goals of the team – scaling.

Their goals for 2019 are fostering merchant adoption, and integration with other EVM blockchains – RSK, ETC. Furthermore, they want to grow beyond Ethereum and build the network for non-EVM based blockchains.

Community

Their Telegram https://t.me/liquiditynetwork has about 13 000 members. The Github https://github.com/liquidity-network currently contains only Revive repository. Their blog https://medium.com/@liquidity.network has about 430 followers and they are posting content regularly. On Twitter https://twitter.com/liquiditynet they have about 1800 followers. Their Youtube channel https://www.youtube.com/channel/UCun8UadDUB5-lBVUli_R6GA has 91 subscribers.

Based on the differences between other social media and Telegram it seems that the hype is rising fast. It is connected also with that the whitelisting is done by Telegram bot.