Voyager with its upcoming trading app targets to be one of the most convenient processes to trade cryptocurrency. The user can just place an order on the Voyager’s crypto trading app and Voyager takes over, executes and completes the rest of the order. The app uses an advanced algorithm to enable users to make the best trade. It charges no commission from the user for such services and is coupled with various cryptocurrency exchanges that prevail within the global market.
Voyager works on a model where they keep a small margin for themselves in case they are able to provide a price improvement within the trade for the user which is calculated systematically. So basically, the company does not make money based on the volume of the trade but basis the good trades provided which motivates them to find profitable trades.
The CEO of Voyager, Steve Ehrlich, was recently in an interview where he talks about his journey and the product details. Steve has been in the capital markets since 1994. In 2006, he bought an online trading division from E-Trade and formed an online brokerage system with the name Lightspeed Financial. After few years Ehrlich sold that company. The crypto boom of 2017 pulled Steve back into the market.
During his absence from the market, he made himself familiar with the strategies of quantifiable and API driven trading systems and gets this knowledge along with him. He states “I started analyzing the market and the market structure of crypto trading. We sat around a table and looked at the crypto market, and I said, ‘This market looks very much to me like the equities market in the 1990s, when there were multiple ECN’s and ATS’s and there were cross-markets. “
At the time of development of Voyager, Steve said to his co-founders that “I really think we could bring a value proposition to consumers by offering connection to multiple exchanges and being able to deliver a best-execution capability to retail customers,”
And this thought process of Steve is what can be seen in Voyager. The app is easy to use and finds the best possible trade available. The Voyager’s users are not required to manage various exchange accounts which is not only cumbersome but also creates security issues. Voyager would do the same tasks, what a broker does. However, looking at the user perspective, the process seems very simple, but at the same time, the said process is quite complex on the Voyager’s side. Talking about the technicalities, Ehrlich said “Best execution has four components: price, quantity, the depth of liquidity, and the reliability of the API on the exchanges. We look at all those factors and try to get you the best execution possible. […] We’ve built a really detailed, complex algorithm to make sure that we can execute across all those exchanges and still be able to bring back a best execution quality back to our customer.”
Presently, Voyager is in private beta with more than a lakh people on the waiting list. They are currently working with 18 other cryptocurrencies and move legally before adding up any cryptocurrency. Steve mentions his company is not against getting associated with any of the upcoming decentralized exchanges but adds that legal opinion is also necessary. He clarifies that Voyager’s primary mission is to find the best trades possible, irrespective of the exchange where they are found.
Ehrlich added that Voyager has conducted few studies to find out which cryptocurrency exchange are providing genuine volume data. Giving his opinion on the traditional market forging volumes, he states that he does remember few instances and says “I think in the equity world, because of the direct oversight by the SEC, it was probably something that was easier to find. Remember, in the equity world, you had to post your orders directly on the tape and they had 90-second rules and so forth. With this, you have to investigate and find out the reliability of the liquidity. And there’s a lot of testing that goes into that, and that’s how we built our algo. In this world, there’s less rules, so you have to do your homework and make sure it’s executable liquidity.”
Steve thinks that currently the crypto market is not adequately regulated and strongly believes that regulation helps the market to develop in such ways which would be fruitful for all parties. He further adds that with blockchain technology it would get easier to track illegal activities within the crypto market. He stated that “Regulation in the crypto space will help increase the acceptance of crypto across all types of customers. I think it’s really important that we get a landscape over time. And I believe that the regulators are taking the proper approach at this time. They are evaluating everything. I think you have knock-on effects. You could put something in place and it affects the market structure but then it might hurt capital rules. “
He further added that “So I think they’re taking a very measured approach to what regulation comes in. I think it’s super important. I think it helps validate the industry. There’s a lot of validation in the industry when bigger names than myself make investments in cryptocurrency, names like Goldman and Fidelity. They’re validating the industry. But the last step before it becomes really widely acceptable to everybody is for the regulators to accept it and put some rules in place.”
When the app gets fully launched, initially it would not be accepting cryptocurrency deposits. As soon as Voyager would get its first major update, it will start accepting crypto deposits and withdrawals. In this quarter, the iOS app may be available for public, whereas, the Android app shall be available in the third quarter.
Although Voyager app will not be the first to execute easy orders over multiple exchanges, it is one among the first. As time progresses and as the crypto market gets more popular, more and more such apps may be witnessed in the future.