Quick Look:
- Crossover Markets raised $12M, led by Illuminate Financial and DRW Venture Capital.
- Mark Beeston from Illuminate Financial joins the board, adding strategic vision.
- The ECN platform reported $3.15 billion in trading volume in Q1, known for speed and efficiency.
- The balanced fee model charges one basis point to makers and takers, attracting diverse market participants.
Crossover Markets has raised $12 million in Series A funding. Illuminate Financial and DRW Venture Capital led this round, with notable contributions from Flow Traders, Laser Digital, Two Sigma, Wintermute, Exness, Gate.io, GMO, Pepperstone, Trademax, and Think Markets. Illuminate Financial’s founder, Mark Beeston, joins the board, bringing valuable experience and strategic vision to propel the company forward.
Crossover Market’s ECN: $3.15B Q1 Volume, Hidden Road Partnership
Crossover Markets operates an ultra-low-latency electronic communication network (ECN) under CEO Brandon Mulvihill. Known for its exceptional speed and efficiency, the platform has partnered with Hidden Road as its prime broker. In the first quarter of this year, the platform reported a trading volume of $3.15 billion, showcasing robust activity in the financial markets.
Mulvihill emphasised the value the model provides to both makers and takers of liquidity. The platform allows multiple independent market data sessions and liquidity pools, charging one basis point each to makers and takers. Therefore, this balanced fee structure attracts diverse market participants and fosters a healthy trading environment.
Ethereum PoS: Enhancing Security with Slashing Mechanisms
Ethereum has transitioned to a Proof-of-Stake (PoS) consensus model, incentivising users to stake ether and operate Crossover Market’s validators. This model enhances network security through economic incentives. The slashing mechanism penalises dishonest behaviour by destroying a portion of staked ETH. Although most slashing events are unintentional, they deter misconduct effectively.
Client diversity within Ethereum is crucial. Due to severe slashing penalties, any consensus error can lead to significant losses if many validators are involved. Maintaining a diverse array of clients ensures Crossover Market’s resilience. Client implementations are pivotal in Ethereum’s security by verifying data against protocol rules and ensuring network integrity. Consensus clients run alongside execution clients, which handle transactions and smart contracts.
Geth’s 47.6% Validator Usage Poses Network Risk
Geth, an execution client, is utilised by 47.6% of validators, while Nethermind is used by 34.5%. The concentration of validators on Geth poses a risk: if a majority of Geth validators make an error, it could jeopardise the entire network. To mitigate this risk, a proposal for cross-validation on the execution layer involves creating a witness for the executed block and sending it to other clients. The aggregated results are then sent to the consensus client. This process enhances security by ensuring multiple clients validate blocks, reducing errors, and strengthening network stability.
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