infrastructure as a service
We built the Bosonic Network to eliminate risk and open participation in Digital Asset markets for member institutions.
Institutions, especially fiduciaries, are principally concerned about risk to client assets. Therefore, they choose their counterparties carefully and will not accept counterparty credit and settlement risk. They are further mandated to seek best execution, which requires executing trades against many sources of liquidity with full transparency to both principal and agency trades.
Institutions in regulated jurisdictions are mandated not to have custody or control of client assets other than directing trades against assets held by independent third-party custodial institutions, which are settled by the same. They can not hold client assets in wallets not protected by an independent custodial relationship.
Institutions are deeply concerned about hacking risk, flash crashes and other market manipulation, lack of transparency, and thin liquidity. Only a handful of super sophisticated hedge funds are able to build liquidity aggregation solutions, and therefore, most find limited utility in trading on individual retail exchanges with unsophisticated order types and high market impact.
Institutions generally do not take direct credit risk to their trading counterparties, but instead use Tier-1 bank-provided Prime Brokerage or large Futures Commission Merchants (FCMs) for credit intermediation. Institutions cannot send assets to a market-maker or dealing desk and wait for them to settle by sending digital assets in return without a guarantor and risk-free settlement process.
Institutions generally will not hold assets with small start-up brokerage providers who may not be regulated as Broker-Dealers, FCMs or the equivalent. In the digital asset space, these upstart brokerage providers represent significant counterparty risk, whether they are acting as an agency broker or a principal to the trades. This is because they typically have custody or control over client assets and may move these assets to retail exchanges to access liquidity, take counterparty credit risk to market makers by trading on unsecured credit lines, and/or extend unsecured credit lines and leverage to other trading customers.
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