An independent Layer-3 mesh network connecting brokers and exchanges
Yellow Network enables brokers and exchanges to aggregate their liquidity cross-platform and cross-chain. This reduces market fragmentation, adds market depth, and mitigates areas of conflict.
Liquidity aggregation helps smaller, specialized participants to offer better pricing and handle larger volumes of trades. End-users can trade additional token pairings which they otherwise would have to move to another broker, exchange, or chain.
Yellow Network participants hold margin accounts with the clearing house for which they use margin netting, allowing for more efficient use of their capital.
Yellow Network uses a fully decentralized Layer-3 state channel solution, that will enable participants to self-custody their assets in their personal wallets.
Trades can be settled across various brokers and exchanges without moving assets to other chains or platforms. An automated netting process greatly reduces the risk of overexposure to any given party.
In case of settlement disputes, Yellow Network operates a reserve vault adding a backstop for failed transactions between participants.
Transactions between Yellow Network participants are handled off-chain via state channel technology, thus not congesting the underlying blockchain. Our Layer-3 network allows for a high transaction throughput at a low cost, where participants can swap their tokens cross-chain without bridging or wrapping them.
The clearinghouse can accurately report transaction data to regulators and participants, thus lowering the reporting burden for traders and brokers. At the same time, it can increase the safety of the marketplace overall by helping to identify and exclude bad actors.