Updated: Dec 21, 2019
Lykke is a Switzerland based, cryptocurrency exchange that was launched in 2015. The exchange offers its users to trade in a variety of cryptocurrencies using fiat currencies. The selection includes popular crypto coins, such as Ethereum, FX, and Bitcoin. The LKK coin is issued by Lykke, the value of which is representative of a 1/100th share of the company itself. LKK token can be considered a Colored Coin that represents shares in the exchange.
This post will discuss what Lykke is all about, the reason it is designed for, the team behind it, how it works, and various uses and applications.
What Is Lykke Designed For?
Lykke was designed to address the glaring issues of high commissions and large spreads charged by existing cryptocurrency exchanges. The team behind the exchange offers to trade at 0% commission with ultra-tight spreads. The exchange was also designed to offer immediate ownership of the digital assets after a quick settlement.
Olsen upon creating OANDA faced a dilemma. He wanted to use cryptographic tokens to represent the value of the company, but these tokens were not recognized by the legal world. So, he created a traditional company but later went to Coinprism.com to create a batch of Colored Coins. These coins were tiny slivers of Bitcoins that came to be called Lykke coins. These coins allowed Olsen to represent the shares of the company in crypto.
Who Is the Team Behind Lykke?
The Lykke Exchange is the brainchild of Richard Olsen. He is also the co-founder of the leading online forex broker OANDA, a currency information company and market maker in foreign exchange. Cameron Fletcher is the Chief Technology Officer is a seasoned professional with a strong engineering background and extensive experience working in the financial sector across Europe.
Lykke has Heinrich Zetlmayer as part of the Board of Directors, who is engaged in several growth companies in FinTech, crowd tasking, and other digital domains. He was a member of IBM’s Executive Board in Switzerland and served as Vice President and Country Leader of IBM Global Business Services.
How Does Lykke Work?
The Lykke blockchain is developed in such a way that nearly every financial instrument in the world can be listed on it in the form of a Colored Coin or Token. Colored Coins are the digital equivalent of real assets, allowing holders to buy or sell assets.
These coins are always connected to the offerer with the underlying asset covering them. A unique factor about Lykke is that the coins only serve as a digital unit of the real asset. For instance, a Colored Coin can be used for the rights to a song or an ounce of gold.
Ownership to a Colored Coin is signaled by coin holders by attaching their signature to it. There are already two different types of Colored Coins launched by Lykke – for CO2 certificates and music rights. A person holding Colored Coins for a music title has the right to earn money with it.
In this way, Lykke offers a platform to regular companies for listing and trading their offers on the blockchain (piece by piece). The International Securities Number (ISIN) is included in the Colored Coins protocol allowing for security.
What are Current and Future Applications of Lykke?
LKK cannot be purchased directly for fiat on any exchange. It can only be traded for other popular cryptocurrencies, such as BTC. The Lykke Coin is built from the ground up to serve as the glue for the decentralized web of trust and value. The primary function of LKK is to act as a share by representing the 1/100th share of Lykke.
The team members are involved in building a mechanism that will allow LKK coin holders to participate in voting. This will allow the coins to satisfy another important function to be realized as a crypto share. This mechanism shall also be successful in replacing the existing voting mechanism in which traditional shareholders participate.
Lykke has a total market capitalization of $92 million, of which almost half a million dollars are traded daily. The platform is doing very well, which can be seen by the value of its Colored Coin LKK. The coin currently has a value of about USD 0.35.
Lykke has already made a name for itself as a single global marketplace for trading and settling any type of financial instrument by using P2P and second-by-second interest payments. Lykke has paved the way for companies to seek or raise money by using a new model. It is expected by many industry experts that the Lykke model shall someday replace traditional stock exchanges.