Key facts:
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It is currently in phase 2 of early access for a closed audience.
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This exchange uses the Nostr protocol.
LN Exchange is a novel solution that expands the use cases of the Lightning Network, the second layer for Bitcoin payments, by being built on top of it.
It is a platform whose objective, as reported by the documentation of the project, is to offer a decentralized exchange house where to trade bitcoin and taproot assets P2P, spot and perpetual.
Taproot Assets are a protocol with the ability to issue Bitcoin assets that can be transferred through Lightning Network channels. These Lightning assets are based on the improvements of the Taproot update.
LN Exchange is powered by Lnfi Network, a finance layer that moves asset tokenization to the Lightning Network and integrates the Nostr protocol as the messaging layer that “allows users to submit their bid and request orders to LN Exchange to match and execute orders.”
LN Exchange is in private testing phase
Through a tweet on social media platform X, LN Exchange announced that “the first order book has arrived on Lightning!” Starting on September 2, 2024, certain users included in the closed whitelist can now enter the platform’s early phase 2.
According to another post from the exchange, by meeting certain requirements new users can enter the whitelist. Method one is to check if you are eligible to enter and apply in a form, which can be access using a QR code.
Step two involves transferring 1,000 USDT via the platform’s interchain bridge, LN Bridge.
LN exchange is in the testing phase. Source: LN exchange.
What does LN Exchange currently offer?
Currently, the trading platform allows connecting to Nostr through wallets that support the Injected module and the wallets OKX wallet, TokenPocket, OneKey and the Albi browser extension.
At the time of writing, LN Exchange allows access to the trading window and observe it from outside. It is impossible at the moment unless you belong to the whitelist of the platform.
The trading window has the characteristic integration with TradingView and, in general, it does not differ much from other simple trading modules built on second layers: it allows you to see the order book on the right and to switch from spot to perpetual in the top menu.
LN Exchange offers spot and perpetual trading. Source: LN Exchange
Offers in addition a points and rewards system through which users can earn LN points for their contribution in the various phases of the project. Although the platform does not clarify what these points are for or how to use them.
The platform also aims to offer other services in its full form. One of them is a split-custody service “where user funds are securely stored on LN Exchange’s Lightning node.”
In the future, LN Exchange intends to incorporate Pocket Universe, a system that requires “both the node operator and the user to approve any fund movement request,” the documentation says. They also aim to offer a full self-custody and node setup service on the platform. Blockchain/” target=”_blank” rel=”noreferrer noopener”>Lightning Network.
With these initiatives, LN Exchange joins other solutions that already existed on Lightning and that allow Cryptocurrency trading. One of them is LN Marketswhich allows trading of derivatives (futures and options) on the second layer. 10101 is another trading platform on lightning, also for derivatives.
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