LCX — Liechtenstein Cryptoassets Exchange

10 min readJan 8, 2021

The Beginning of a Giant

This article examines what the hype around LCX is all about, its potential, but also possible shortcomings. This will be done through extensive citations of the Whitepaper, Economic paper, two World Economic Forum articles, and my own views.

Citations:

All citations that are used in this article can be found here:

LCX Documents: LCX Vision Paper: LCX Token Economics: Branding Kit. (2020, August 27). Retrieved January 05, 2021, from https://www.lcx.com/documents/

LCX Is A New Kind Of Global Financial Technology Company — Empowering The Blockchain Industry. (2019, October). Retrieved January 04, 2021, from https://www.lcx.com/wp-content/uploads/LCX-Vision.pdf

LCX Token Economics. (2020, April 2). Retrieved January 05, 2021, from https://www.lcx.com/wp-content/uploads/20200402-LCX-Token-Economics.pdf

Central Banks and Distributed Ledger Technology: How are Central Banks Exploring Blockchain Today? (n.d.). Retrieved January 05, 2021, from https://www.weforum.org/whitepapers/central-banks-and-distributed-ledger-technology-how-are-central-banks-exploring-blockchain-today

White Paper Building Value with Blockchain Technology: How … (n.d.). Retrieved January 5, 2021, from http://www3.weforum.org/docs/WEF_Building_Value_with_Blockchain.pdf

Humble Beginnings:

On the LCX ‘about’ page, you can get an idea of how it all started. The founder, Monty C. M. Metzger realized that he had to find a way to combine traditional- and crypto finance — by building a regulatory framework and an institutional-grade platform. Becoming one of the world’s first licensed and supervised blockchain ecosystems for professional investors. All of this started on a napkin.

What is LCX?

“LCX’s goal is to become one of the world’s first licensed and supervised security token exchanges as a regulated marketplace for digital assets.”

LCX has three primary fundamentals they focus on, those are as follows:

Secure while introducing new standards for regulatory transparency and reporting.
Technology-driven while delivering a customer-centric client experience.
Focusing on crypto-assets while offering the full set of blockchain services.

Sounds great. But how will they achieve this?

LCX Terminal A sophisticated trading desk for managing the complete crypto asset trading lifecycle across multiple platforms.
LCX Assets Asset management across fiat and crypto assets alike, issuing a variety of tokenized financial assets, and managing security token emissions.
LCX Exchange The LCX Exchange is a regulated trading venue offering a range of digital currencies.
LCX Protocol A decentralized compliance protocol aka. “The Liechtenstein Protocol” to standardize the way security-tokens are issued and traded on blockchains.
LCX Vault Institutional-grade custodian solution with multi-signature, programmable governance, secured by Hardware Security Modules (HSM).
LCX Bank* Part of LCX’s long-term vision — Aiming to become a blockchain bank with a full bank license focusing on corporate banking.

AKA they want to become a technology-driven finance company, helping both traditional and crypto market users make the most out of the explosive growth of cryptocurrencies, and their assets. In other words, the Liechtenstein Cryptoassets Exchange seeks to provide the key infrastructure for the fresh demand for intangible digital assets and the token economy.

Adoption:

I am sure you’ve heard the tales about big institutions, corporations, and wealthy people getting into the crypto market. While this is true for some, it has not even begun to happen on a global scale. LCX seeks to lessen the pain of this process, making it easier for these individuals and organizations to invest in the crypto market. As they mention in their vision paper “LCX will foster the adoption of crypto by helping financial institutions and professional investors understand the potential blockchain holds to ignite global economic reform and financial inclusion.”

Additionally.. they don’t just say big words without any meaning behind them — they put a lot of action into it. In fact, already in Nov. 2018, LCX had received a business trading license, and an FMA — allowing LCX to offer different financial services and licensed crypto products to institutional investors and consumers. If that isn’t enough to clench your thirst and pressing that “buy” button, maybe this will:

WORLD. ECONOMIC. FORUM. You can verify yourself that this is true by searching the words on google, you’ll get a ton of verifiable and legit sources about it. i.e: https://www.businesswire.com/news/home/20190115005477/en/LCX-Joins-World-Economic-Forum-WEF-Centre-for-the-Fourth-Industrial-Revolution

In other words... LCX has become a member of the World Economic Forum’s Center for the 4th Industrial 2 Revolution, supporting initiatives with central banks and other incumbents of the financial industry. Furthermore, LCX has been named Blockchain Pioneer by the Blockchain Research Institute. (citation: LCX Is A New Kind Of Global Financial Technology Company — Empowering The Blockchain Industry. 2019)

Key Features LCX.com

LCX Terminal: advanced crypto trading desk to trade on all major crypto exchanges within a single interface. Register at LCX.com/Terminal
LCX Smart Order: LCX Smart Order is an automated smart order routing system for cryptocurrency trading. LCX.com/Smart-Order
LCX Price Services: The LCX Cryptocurrency Reference Prices are credible and regulated reference prices. LCX.com
LCX Assets*: Security Token Platform, issuing regulated and approved Security Tokens.
LCX Exchange*: Exchange for Security Tokens and other Crypto Assets.

Tokenomics(economics):

Summarizing the tokenomics in this paragraph — Numbers speak louder than words here:

Token Burn

As LCX will be accumulating LCX Tokens over time, it will implement a transparent and verifiable mechanism to burn LCX in order to reduce the supply of tokens in the ecosystem. LCX will burn 100% of all “used” LCX Tokens, which LCX receives in the payment process of the utility token. LCX will burn these tokens on a quarterly basis and publish the number of tokens burned. As a result, the supply of LCX will decrease over time as the activity on LCX increases. This is subject to further amendments after one year.

Utility Token

The LCX Token is created as a utility Token which may be used to pay all fees associated with the services offered by LCX AG. The LCX Token can be used as a voucher to pay fees, such as fees for LCX Terminal subscription; fees for custodian solutions LCX Vault; fees for exchange transactions for all crypto assets; exchange fees for fiat-crypto-fiat transactions; processing fees; and other fees within the LCX ecosystem.

LCX Token Facts & Figures

https://www.lcx.com/wp-content/uploads/20200402-LCX-Token-Economics.pdf

To keep yourself 100% up to date for the correct circulating supply, you can go to https://www.coingecko.com/en/coins/lcx

Monty vs. CZ Binance:

I gotta say- in life, I got huge respect for those who can discuss different matters in a peaceful and civilized manner. These qualities are especially important for a leader. One of many instances and examples of Monty being a terrific leader and transparent person is this tweet thread last summer. CZ directly blocked him, after calling him out as a scammer. How did Monty reply? By coming with evidence against the allocations, showing that he is playing by the rules in order to create something truly great. I highly recommend checking out how this transpired, links below:

https://twitter.com/montymetzger/status/1269332622355894272?lang=en

Now, this is only speculation from my side — but I can’t help wonder if CZ seems kind of afraid here. Looking at LCX, its team, advisors, and current partnerships — It is hard to see how it won’t succeed long-term. CZ might be feeling the pressure of potential-future competition. In any case, it will be interesting to observe.

Potential Shortcomings or Obstacles:

For my future articles, I will try to include a paragraph that might help you analyze these plentiful aspiring projects in the crypto space from a more critical perspective. It is a fact that most projects in this market are highly ambitious, energetic, and more often than not, give false promises. Sadly, for the majority of projects, the roadmap never completes, and the promises once given can’t be upheld. Subsequently, these projects end up dying. So how do you differentiate between the trash and the gems? In order to be as safe as you can, there are many factors to consider and lots of research to be done. In a future article, I can dig deeper into how I determine if a project is worth investing in or not. For now, I will look at the potential shortcomings of LCX.

Of course, launching an ambitious project like LCX, where you have to compete with the top-dogs like Binance is not an easy task. Regulatory tasks, licenses, and interest from the target audience is hard to lockdown. Most users are placed at Binance, Coinbase, Uniswap, and other exchanges, so what would make people switch their positions to a totally new exchange?

Additionally, will they be able to handle the flow? Exchanges are often unable to manage their current account opening facilities due primarily to the rapid surge of people. As a result of this problem, many affluent traders are not in a position to register for their preferred exchange. At the end of 2017 and the beginning of 2018, multiple exchanges were facing temporary closing due to a sudden rise in prospective customers. Will LCX be able to handle a futuristic market in crypto where the crypto market cap is in the multitudes of trillion dollars $?

Another thing to consider is 1. the regulatory difficulties with International customers. 2. Considering the flaws of Mt. Gox with manipulation, do they have the means of accountability, and manipulation? These themes are worth considering — because they NEED to be done right.

Why I am bullish:

This whole article is a testament to my bullishness. To keep it short and simple LCX has covered my whole checklist. Product? Check-check-CHECK! Business trading license, and an actual legal use-case? Check. If there is any competition, do they have something unique to compete with? Check. Team? Beyond great. Advisors? Arguably, top-notch.

Most points in the “potential shortcomings” paragraph above are already secured by LCX. But of course, doing your own additional research is always worth it.

In my opinion, LCX’s future is only limited by their willingness. The motivation, resources, and vision are already there.

Team:

LCX is a core technology business, thus balancing skills in the crypto, blockchain, and banking fields. Team members have been at the forefront of disruption in the industry for many years and have led fast-paced development businesses in the past.

Not only among the core-team but also among the list of advisors you will find familiar faces like; Don Tapscott, and Jimmy Wales, founder of Wikipedia.

Here are some of the primary-members of LCX: