The term "liminal" refers to something that occupies a position at a boundary or threshold. As Liminal.market connects the on-chain and off-chain worlds, the name aptly represents its function.
The idea for Liminal.market arose from the realization that the current pension system in Iceland is expensive to operate and could benefit from blockchain technology to reduce costs and increase transparency. After investigating, it became clear that setting up a pension fund investing in cryptocurrencies wasn't feasible due to legal restrictions.
Unable to find an existing project that allowed purchasing securities using blockchain and owning the underlying assets, Liminal.market was created to fill that gap.
Yes, you own both the security and the underlying asset.
Yes, you are entitled to dividends and voting rights.
We believe that creating a bridge between the on-chain and off-chain worlds is the quickest way to bring securities to the blockchain. While there are ongoing efforts to develop tools for companies to issue their stocks on the blockchain, this process will take time, the legal framework is non-existent, token standards have not been created and stock exchanges are at the research stage.
As a result, we believe it will be years before the companies on NYST/Nasdaq issue stock on a blockchain.
While Synthetix and Mirror allow you to buy derivatives, they don't grant ownership of the underlying security. These platforms use a pool of tokens to mirror the price of the synthetic, which can be limiting due to regulatory requirements and pose risks related to the accuracy of security prices.
Liminal.market utilizes the services of Alpaca Securities LLC ("Alpaca Securities") for securities brokerage. Alpaca Securities is a member of FINRA/SIPC and is a wholly-owned subsidiary of AlpacaDB, Inc. Technology and services are provided by AlpacaDB, Inc. For more information about Alpaca Securities and the services they offer, please visit their website: https://alpaca.markets/.
No. Although you may theoretically be able to sell your shares by contacting the broker, this is not a supported. If you do manage to sell your shares and then attempt to sell them again through Liminal.market, the platform will detect the previous sale and burn the tokens upon execution of the second order.
In theory, it is possible, but it should never happen. Trust is necessary in the off-chain world, and this is where governmental oversight plays a role in preventing malicious actions.
In theory, the government could seize your funds, as you are operating within the stock exchange and are subject to the same rules as in the traditional financial world.
Liminal.market's operations are fully transparent, but it relies on a service that is not. The stock market operates off-chain, which means that certain aspects are managed by licensed broker companies subject to governmental regulations.
How does Liminal.market ensure the accuracy and reliability of the real underlying assets represented by the tokens?
Liminal.market ensures the accuracy and reliability of the real underlying assets represented by the tokens through a process of mirroring and monitoring. Specifically, Liminal.market mirrors the user's equity holdings at the broker on the blockchain. This means that for each security held in the user's brokerage account, a corresponding token is created on the blockchain to represent that asset.
To maintain accuracy and reliability, Liminal.market continuously monitors the equity holdings at the broker and compares them to the on-chain token representations. This monitoring process ensures that the on-chain tokens accurately reflect the user's actual holdings at the broker at all times.
Additionally, Liminal.market plans to implement a proof of reserve mechanism using oracle services such as Chainlink. By leveraging Chainlink's decentralized oracle network, Liminal.market will be able to provide real-time, tamper-proof verification of the reserves held at the broker. This added layer of transparency and security will further enhance trust in the platform and ensure that the tokens accurately represent the real underlying assets.
Liminal.market mitigates the risks associated with derivatives by not offering derivatives on its platform.
Instead, Liminal.market focuses on providing users with the ability to buy and sell real underlying assets, such as stocks and ETFs, on the stock market. When users invest through Liminal.market, they are purchasing the actual underlying assets, and for each asset held, a corresponding token is created on the blockchain to represent that asset. This approach ensures a true 1:1 collateralization and eliminates the risks that come with derivatives, such as counterparty risk and complex pricing models.
By offering direct ownership of the underlying assets rather than derivatives, Liminal.market provides users with a transparent and secure investment experience. It's important to note that while Liminal.market itself does not provide derivatives, other DeFi services may choose to build derivative products on top of Liminal.market's infrastructure at the blockchain level. In such cases, the risks associated with those derivatives would be managed by the respective DeFi services offering them.
Liminal.market is accessible to users in most countries, provided they successfully complete the required Know Your Customer (KYC) and Anti-Money Laundering (AML) verification process. This verification is necessary to comply with stock exchange regulations and to ensure that all users are properly identified.
However, there are certain geographical and regulatory restrictions that apply to Liminal.market. Users from countries that are subject to international sanctions, are excluded from accessing the platform and its services. These restrictions are in place to comply with international laws and regulations.
It's important for users to be aware of the specific regulations and restrictions that apply to their jurisdiction before using Liminal.market. Users should also ensure that they meet the platform's eligibility criteria and comply with all applicable laws and regulations in their respective countries.
Liminal.market supports fractional shares by utilizing security tokens with 18 decimal points. This high level of decimal precision allows for the representation of fractional ownership of stocks on the blockchain. When a user purchases a fractional share of a stock, a corresponding fraction of a security token is minted to represent that ownership.
For example, if a user purchases 0.5 shares of a particular stock, a security token representing 0.5 shares of that stock will be created on the blockchain. The 18 decimal points provide the flexibility to represent even very small fractions of a share accurately.
By enabling the tokenization of fractional shares, Liminal.market provides users with the opportunity to invest in stocks with lower capital requirements and greater granularity. This feature enhances accessibility and allows users to diversify their portfolios more effectively.
Liminal.market charges a base service fee for each transaction executed on the platform. The platform aims to set the base service fee at 0.2% of the transaction value. This fee applies to both buying and selling securities and is intended to cover the operational costs associated with facilitating the transactions.
It's important to note that other DeFi services that integrate with Liminal.market may choose to add their own service fees on top of the base service fee charged by Liminal.market. These additional fees would be determined by the respective DeFi services and may vary based on the specific services or features they offer.
Users are encouraged to review the fee structure and any updates or changes to the fees on the Liminal.market platform before executing transactions to ensure they are fully informed about the costs associated with their investments.
Liminal.market takes the security and privacy of user data seriously, especially during the Know Your Customer (KYC) and Anti-Money Laundering (AML) verification process. To ensure the protection of sensitive personal information, Liminal.market does not permanently store the personal data submitted by users for KYC/AML verification on its servers. Instead, the data only resides on Liminal.market's servers for a brief period of time—just long enough to securely forward it to the licensed broker responsible for conducting the KYC/AML process.
The licensed broker, which is a regulated entity subject to strict compliance and data protection standards, handles the KYC/AML verification process and securely stores the user data as required by relevant regulations. By minimizing the amount of time that personal data is held on Liminal.market's servers and relying on a regulated broker to handle the verification process, Liminal.market mitigates the risk of data breaches and unauthorized access to user information.
Liminal.market is committed to maintaining user privacy and ensuring that sensitive personal information is handled with the utmost care and security during the KYC/AML process.
What are the potential use cases for the aUSD token beyond representing value in a brokerage account?
The aUSD token is specifically designed to represent the value held in a user's brokerage account on the Liminal.market platform. The primary function of the aUSD token is to serve as a digital representation of the user's account balance, which is always 1:1 against the U.S. dollar. The token is redeemable for USD and is used to facilitate transactions involving securities on the platform.
It is important to note that the aUSD token is not intended to be traded on the open market, and its use is limited to the Liminal.market ecosystem. As such, there are no additional use cases for the aUSD token beyond representing the value in a brokerage account. The token's primary purpose is to provide a transparent and secure way for users to manage their funds within the Liminal.market platform and to execute transactions involving securities.
Liminal.market handles corporate actions, including mergers, acquisitions, and spin-offs, automatically and seamlessly for its users. When a corporate action occurs that affects the securities held by users on the platform, Liminal.market takes the necessary steps to accurately reflect the changes in the users' holdings.
Specifically, Liminal.market mints and burns tokens as needed to represent the updated ownership of securities resulting from the corporate action. For example, in the case of a stock split, Liminal.market may mint additional tokens to represent the increased number of shares held by users. Conversely, in the case of a reverse stock split, Liminal.market may burn tokens to reflect the reduced number of shares.
The automated handling of corporate actions ensures that users' holdings are accurately represented on the blockchain at all times, without requiring any manual intervention from the users themselves. This approach provides a seamless experience for users and allows them to focus on their investment strategies without worrying about the complexities of corporate actions.
Liminal.market's ability to handle corporate actions automatically is a key feature that enhances the platform's convenience and reliability for investors.
The broker service has established a minimum investment limit of $1 for users on the platform. This means that users can start investing and trading securities on Liminal.market with as little as $1, making the platform accessible to a wide range of investors, including those with limited capital.
How does Liminal.market handle situations where a user loses access to their wallet or private keys?
In situations where a user loses access to their wallet or private keys, Liminal.market has a manual process in place to assist the user in recovering their assets. The process involves the user providing proof of their identity and demonstrating that it matches the information provided during the initial KYC (Know Your Customer) verification process.
Once the user's identity has been successfully verified and Liminal.market is confident that the user is the legitimate owner of the assets, the platform can facilitate the transfer of the user's tokens to a new wallet that the user has control over. This process ensures that the user regains access to their assets while maintaining the security and integrity of the platform.
It is important to note that the recovery process requires careful verification and may take some time to complete. Users are encouraged to take appropriate measures to secure their wallets and private keys to prevent loss of access in the first place. Additionally, users should reach out to Liminal.market's support team for assistance and guidance in the event of lost access to their wallet or private keys.
Remember: We will never ask you for your private key.
What are the steps involved in the process of minting and burning tokens in response to corporate actions?
The process of minting and burning tokens in response to corporate actions on Liminal.market involves the following steps:
Notification: Liminal.market receives a notification from the broker service about a corporate action that affects the securities held by users on the platform. This notification includes details about the specific corporate action, such as a stock split, reverse stock split, merger, acquisition, or spin-off, and the impact it will have on the securities.
Analysis: Liminal.market analyzes the details of the corporate action to determine the appropriate response. This involves assessing whether new tokens need to be minted (created) or existing tokens need to be burned (destroyed) to accurately reflect the changes in the users' holdings.
Execution: Based on the analysis, Liminal.market automatically executes the necessary actions on the blockchain. For example, in the case of a stock split, Liminal.market mints additional tokens to represent the increased number of shares held by users. In the case of a reverse stock split, Liminal.market burns tokens to reflect the reduced number of shares.
Reflection: The user's holdings on the Liminal.market platform are updated to reflect the changes resulting from the corporate action. Users can view their updated token balance and securities holdings on the platform.
Confirmation: After the minting or burning process is complete, Liminal.market provides confirmation to the affected users. This confirmation is typically sent via email and includes information about the corporate action, the changes to the user's holdings, and the updated token balance in the user's wallet.
By automating the process of minting and burning tokens in response to corporate actions, Liminal.market ensures that users' holdings are accurately represented on the blockchain at all times, without requiring any manual intervention from the users themselves.
Liminal.market aims to foster integration with existing DeFi platforms and services by providing a robust and open architecture that allows for seamless interoperability. The platform is designed to be compatible with the broader DeFi ecosystem, enabling other platforms and services to build upon and leverage Liminal.market's infrastructure. Key aspects of Liminal.market's integration strategy include:
Open Architecture: Liminal.market's open architecture allows other DeFi platforms and services to interact with its smart contracts and utilize its features. This openness facilitates the development of innovative financial products and services that can integrate with Liminal.market's offerings.
Integration Support: Liminal.market is committed to providing integration and development support to DeFi platforms and services that wish to leverage its infrastructure. This support may include technical documentation, development tools, and direct assistance from the Liminal.market team to help ensure successful integration.
Standardized Tokenization: Liminal.market's use of standardized tokenization, such as ERC20 tokens for representing securities, ensures compatibility with existing DeFi protocols and services. This standardization allows for seamless integration and interaction between Liminal.market and other platforms in the DeFi space.
Collaboration and Partnerships: Liminal.market actively seeks opportunities for collaboration and partnerships with other DeFi platforms and services. By working together, Liminal.market and its partners can create synergies that enhance the overall value proposition for users and expand the range of available financial services.
By providing integration support and fostering an open and collaborative environment, Liminal.market aims to become a key player in the DeFi ecosystem, enabling users to access a diverse range of financial services and unlocking new possibilities for innovation and growth in the decentralized finance space.
DeFi platforms that choose to build on top of Liminal.market can enjoy several potential benefits, including:
Increased Product Selection: By integrating with Liminal.market, DeFi platforms can expand their range of offerings to include traditional securities such as stocks and ETFs alongside existing crypto assets. This expanded product selection allows DeFi platforms to cater to a broader audience, including investors who are interested in both traditional and digital assets.
Increased Revenue: The integration with Liminal.market provides DeFi platforms with additional revenue streams through transaction fees associated with trading securities. By offering a wider range of investment options, DeFi platforms can attract more users and generate higher trading volumes, leading to increased revenue.
Access to Regulated Assets: Liminal.market's protocol enables the tokenization of real underlying assets that are traded on regulated stock exchanges. This access to regulated assets provides DeFi platforms with the opportunity to offer investment products that comply with regulatory standards, enhancing their credibility and appeal to institutional investors.
Enhanced User Experience: The seamless integration with Liminal.market allows DeFi platforms to provide users with a unified and streamlined experience for managing both crypto and traditional assets. Users can benefit from the convenience of accessing a diverse range of investment options within a single platform.
Innovation and Differentiation: By building on top of Liminal.market, DeFi platforms can develop innovative financial products and services that leverage the unique capabilities of blockchain technology and traditional securities. This innovation can help DeFi platforms differentiate themselves from competitors and establish a unique value proposition in the market.
Broader Market Reach: The ability to offer traditional securities alongside crypto assets enables DeFi platforms to appeal to a wider range of investors, including those who may be new to the world of decentralized finance. This broader market reach can help DeFi platforms grow their user base and increase adoption.
Overall, building on top of Liminal.market provides DeFi platforms with the opportunity to enhance their offerings, generate additional revenue, and attract a wider audience, ultimately contributing to the growth and success of the platform.
Liminal.market acts as a facilitator for securities transactions, leveraging blockchain technology to represent the value of securities held in users' brokerage accounts. However, the actual settlement and clearing of securities transactions are handled by a licensed broker service that is integrated with Liminal.market.
The process for settlement and clearing of securities transactions through Liminal.market is as follows:
Order Execution: When a user places an order to buy or sell securities on Liminal.market, the platform facilitates the order by securely transmitting the order details to the licensed broker service.
Broker Service: The licensed broker service, which is a regulated entity with the necessary permissions to operate in the securities market, executes the order on the user's behalf. This involves interacting with the relevant stock exchange and counterparties to complete the transaction.
Settlement and Clearing: The broker service handles the settlement and clearing of the securities transaction in accordance with regulatory requirements and industry standards. This process involves the transfer of securities and funds between the parties involved in the transaction, as well as the reconciliation of accounts.
Blockchain Representation: Once the transaction is settled and cleared by the broker service, Liminal.market updates the blockchain representation of the user's holdings. This involves minting or burning tokens as needed to accurately reflect the changes in the user's brokerage account.
Confirmation: Liminal.market provides the user with confirmation of the completed transaction, including details of the securities bought or sold and the updated token balance in the user's wallet.
By partnering with a licensed broker service, Liminal.market ensures that the settlement and clearing of securities transactions are conducted in a secure and compliant manner. Liminal.market's role is to facilitate the order execution and provide users with a transparent and accurate representation of their securities holdings on the blockchain.
Are there any plans for Liminal.market to support additional asset classes beyond stocks and ETFs in the future?
Liminal.market primarily focuses on facilitating the buying and selling of securities, including stocks and ETFs, using blockchain technology. While the platform's current offerings center around these asset classes, Liminal.market is open to exploring opportunities for expansion and innovation.
Liminal.market recognizes the potential for blockchain technology to revolutionize the way various asset classes are traded and managed. As such, the platform may consider supporting additional asset classes in the future, depending on market demand, regulatory considerations, and the feasibility of integrating new assets into the platform's infrastructure.
Any plans to support additional asset classes would be carefully evaluated to ensure that they align with Liminal.market's mission of providing users with a transparent, secure, and efficient trading experience. Users and interested parties are encouraged to stay informed about Liminal.market's developments and updates, as the platform may announce future expansions or enhancements to its offerings.