Liquidity Network: Trustless Off-Chain Transfers

Off-chain Hub, NO-CUST HUB

The main idea of ​​the Liquidity architecture is based on the concept of "Universal Hub". This design allows users who are participating in the Hub to pay/exchange their cryptos instantly. This is done off-chain, therefore the cost of the transaction is practically negligible compared to an on-chain transaction. Within each Hub, there is an operator and a Smart Contract associated with the transaction.

The innovation of Liquidity is to have an off-chain server that works at the same time with perfect synergy with a Smart Contract. So anyone can run their own server, plus each user has full control of their own private keys. Liquidity can easily manage the payments hubs without any congestion problems and with low maintenance costs. Allowing the management of millions of users.

Even more, funds are not blocked only between two people, the funds are accessible to all users who are within the same Hub. However, Liquidity uses the Blockchain Technology to secure funds so that no user can steal the allocated funds from another.

Liquidity allows users who are in different Hubs to make exchanges or payments between them, thanks to the Interconnected Hubs, like any traditional payment channel.

Liquidity is implemented for Ethereum Blockchain, allowing millions of users who use this platform to make their crypto payments/trades.

Currently, there are some design problems in the payment channel, which Liquidity solves. The main problems are rigidly locked funds, complex design, costly and delayed channel establishment, third-party custody of funds.

About this architecture many people may think that Liquidity is a centralized network. But it is not because of the following characteristics:

A Hub is not a bank or an entity that holds funds. So the owners of the funds (via private key) remain always in control of their funds.

Similar to a Red Lightning peers where fast transactions between the nodes are made because of the network always is always searching for the quickest and shortest way to carry out the transaction. Liquidity designs many Hubs that interconnect with each other, to create redundancy in the network and perform the transaction instantaneously and securely.

The user can eliminate their funds from the Smart Contract of the Hub, in case the Hub does not forward the payments. So, in case of conflicts, the user can simply move to another Hub.

The token issued by Liquidity is an ERC20. Its name is LQD. Its use will be fundamental for the ecosystem off-chain payment. Liquidity seeks to integrate its token into the open market to make secure payments where hubs can compete to attract merchants and end users.

Although some of the useful features of the token are its security and ease of use, these are not the primary ones. The LQD token is not a cryptocurrency for general use. The true utility of the LQD is of special purpose for added-value services.

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Airdrops

Currently, the Airdrops market presents some problems, which go against the decentralization of the system and the essential characteristics (secure, open, fast, scalable, decentralized, etc.) of Blockchain technology.

Since the airdrops are made through a custodian, as if it were a bank, it saves, sends and maintains the private keys of the users (as well as their funds). In addition, to make millions and millions of on-chain transactions, they produce slow, not scalable, massive, and fee costly transactions that spam the blockchain.

Liquidity revolutionizes the world of airdrops since there is no custodian (no more leakage of the user's funds or private keys) the transactions have negligible costs. Instant drops can be made allowing the propagation of the airdrop much faster. As it is known, Airdrops are an important tool for the construction of any crypto community. Liquidity improves this tool, to help building new and better communities. If you want to try an Airdrop through Liquidity enter HERE.

How Liquidity boost Airdrops performance

Normally issuers that wish to distribute large amounts of tokens to millions of users, must to compliant with the regulators. With Liquidity the Issuers do not need to worry anymore about the legal aspects that concern the distribution of tokens in the Airdrops.

It does not matter how many millions of users will benefit from the Airdrop, since they will not cause the Blockchain to collapse, thanks to Liquidity. The transactions being designed with the off-chain protocol, have no cost for the Blockchain.

Liquidity has mechanisms to avoid Sybil Attacks. So, it is easy to avoid scam and create multiple accounts per user. However, if the Issuers so wishes, they can request identity validation.

Liquidity is an off-chain platform built to provide multiple solutions to Ethereum, thus allowing free transactions from Ether and any ERC20 token.

Instant Payments and Micropayments

Another tool that Liquidity has is instant payments and micropayments. Since the fees per transaction are practically zero, making micropayments (buying a coffee, candy, snack, etc.) is viable, safe and instantaneous (faster than instant coffee).

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As indicated above, one of the objectives of Liquidity is to unite end users and merchants in the same payment network in a large liquid, secure, reliable and instantaneous market.

It is known that the payments (transactions) or the exchange of funds (or information) is the main application of the Blockchain networks. Currently, the most important Blockchain platforms such as Bitcoin or Ethereum present some difficulties. For example in the execution of transactions, since they are slow and can not meet the demand of users (since January 2018 has increased drastically). In addition, high commissions and transaction delays worsen and deteriorate the primary use (payments/trade) of the Blockchain platform.

Liquidity has the solution for these problems. Primarily Liquidity solves the problems of scalability, thanks to its novel design, which is responsible for transactions in off-chain payments hubs. Transactions can be made quickly and safely. While more users use Liquidity, that is to say, the more transactions there are, therefore the more liquids there are in the system, the fees for transactions can become free.

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The aim of Liquidity is to build a network that allows Blockchain networks to scale to the maximum, taking advantage of the design of off-chain transactions.

Why choose Liquidity?

There are several channels of off-chain, Raiden and Lightning payments. According to Liquidity, these payment channels have characteristics that make them a worse option than Liquidity. They are more expensive, unnecessary complex routing, and have rigid collateral fud lockage. Liquidity provides an efficient solution based on off-chains hubs.

Below is a table comparing Liquidity with other off-chain payment channels:

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Comparison of Liquidity with other payment channels

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Comparison of Liquidity with other Exchanges

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Liquidity is presented as the next step of the evolution in the exchanges world. The first exchange was the Marketplace, the only positive characteristic that it had was the control of the funds by the users. A step up on appeared the NYSE (New York Stock Exchange) that provides two features that the Marketplace does not have (Speed ​​and Scalability), but with the great inconvenience that users can not always control their assets.

Then and for less than 9 years, Kraken appeared a cryptocurrency Exchange with characteristics similar to NYSE but allowing transactions with cryptos. One step before Liquidity are the DEX (Decentralized Exchanges) where the best have only managed to allow users to control their funds and can handle high volumes, but they lose speed, their transactions are expensive and there is a lot of congestion in the system.

Liquidity allows instant transactions without custodians. Making use of the Blockchain technology, Liquidity allows users to always have power over their funds and with their design of off-chains hubs it allows them not to represent additional costs in the Blockchain or be slower.

If you want to install Liquidity Network Wallet. You have two options mobile application :

In the next video you can watch how to use free Ethereum faucet and how to transfer ETH from one mobile app to the other without paying (gas costs).