LnMarkets now live on Bitcoin Testnet

LnMarkets gives you access to Bitcoin derivatives on the Lightning Network: instant transfers for instant trading.

Bitcoin derivatives trading today

The most convenient way for retail traders to enter a Bitcoin derivatives position is through exchanges. These exchanges play two main roles, trading venue and clearing house.

To make sure that buyers and sellers honor their contractual obligations, exchanges require Bitcoin derivatives traders to deposit and maintain an account funded with Bitcoin as collateral.

By doing so, traders give the ownership of their asset to a third party : they take a counterparty risk. To mitigate this risk, traders could transfer their bitcoins out of the exchange whenever they are not in an active position and do the opposite when they want to enter into a position.

This is painful, as it means navigating through various interfaces and wallets. It is a slow process since Bitcoins transfers usually take around one hour to be confirmed. And is expensive since each Bitcoin transaction incurs transaction costs, on top of exchange fees.

And on top of this, due to this cumbersome process, traders may miss market opportunities. As a result, in the bitcoin derivatives market, much more funds than needed “stay at risk” on the exchange.

Finally, bitcoin derivatives investors face a dilemma: what to do with my bitcoins? Shall I transfer out of the exchange, through a painful process, or leave them on the exchange to be ready to trade anytime, but taking counterparty risk?

Bitcoin derivatives with LnMarkets

LnMarkets aims to solve this dilemma by improving radically the funds transfer process between investors and the exchange.

LnMarkets leverages the Lightning Network as a settlement layer to provide a completely new experience where trading and transfer of bitcoin funds are done at the very same time, in one click.

Bitcoin funds that are not used in a position never stay at risk on an exchange: traders minimize their risk.

How does LnMarkets work?

After funding a lightning channel with LnMarkets, traders’ funds are connected to LnMarkets and ready to enter a position. When submitting an order, a trader agrees to transfer a margin to LnMarkets. A lightning invoice is sent to the trader and the lightning payment confirms the order.

LnMarkets plays the role of a broker and automatically takes the position in the market on behalf of the user.

Closing a position is the opposite process: once the closing is confirmed, either manually or via an order, the funds are instantly transferred to the trader’s wallet with a lightning payment.

Who is LnMarkets for?

Our typical user is a crypto trader able to manage a Bitcoin wallet, who wants a better risk control and who is open to a new trading experience.

There are approximately 50 million crypto traders, and around 1.6 mio of them bought a Ledger Nano. Hence our user base is comprised between those 2 numbers.

What is going on with the Lightning Network?

A lot, actually:

Come and try LnMarkets!

LnMarkets currently offers an access to BitMEX perpetual Bitcoin future on the Lightning Network.

To trade on LnMarkets, no need for registration, you only need a Joule wallet to try this new Bitcoin trading experience!

LnMarkets is currently running on Bitcoin Testnet, and will be soon available on Mainnet.

Should you have any question please email us at hello@lnmarkets.com.