IX SWAP

LIQUIDITY AS A PROBLEM WITH SECURITY TOKENS
Although security tokens have significantly grown over the years, there are still many challenges that have to be addressed along the way. A major issue that arises with the security token market is that of liquidity.
What is Liquidity?
Liquidity can be defined as the ability of an asset or security to get converted or sold in the market at the price shown as intrinsic value. It however signifies that the buyer and seller will easily be able to connect, thus performing a transaction in a designed time frame.
The liquidity of tokens is one of the major reasons that attracts investors to invest in a trade. When it comes to security tokens, there is no central depository. A portion of the token is being held by each individual exchange which they can trade. This leads to low liquidity of security tokens on each of these individual exchanges.
Security tokens have to be listed on the ATS (Alternative Trading System) which is according to the SEC Regulations. To list on a regulated security token exchange, various investor protection norms have to be followed which are mandated by the legal regulators. These protection norms include; compliance with insider trading rules, counterparty KYC/AML compliance, suitability check for traders, restrictions on removal process including affiliates. All these checks are the actual requirement and legitimate. Thus while planning for an STO, these protections ensure the secondary liquidity on an ATS, therefore attracting more of primary investors.
A procedure has to be set wherein a buyer and a seller must be available digitally at the same time and thereby on the same venue for the tokens to pass through the network. This is where IX Swap comes in.

WHAT IS IX SWAP?
IX Swap is a next-generation platform that leverages DeFi services backed by CeFi regulatory compliance to facilitate safe and convenient issuance, listing, and trading of security tokens and fractionalized NFTs.
By bridging the gap between traditional finance and innovative blockchain-based solutions, IX Swap is paving the way in democratizing access to traditional financial markets that have never been done before.

The problem of liquidity with security tokens can be overcome by market markers. IX Swap is bringing a positive change to the security tokens market with the adoption of automated market maker (AMM) and liquidity pools that are being made particularly for the security tokens industry. IX Swap is going to be the very first project backed by decentralized finance designed to bring liquidity to the secondary trading of security tokens.
An automated market maker (AMM) is a type of decentralized exchange (DEX) protocol that relies on a mathematical formula to price assets. Assets are priced according to a pricing algorithm. The AMM follows the equation x*y = k. Where x and y are the amounts of each of the two tokens in the liquidity pool respectively, and k is a fixed constant. Here, liquidity added by liquidity providers are covered between the range of 0 and infinity.
IX Swap is creating liquidity pools that allows security token holders to stake their tokens to become liquidity providers. As a liquidity provider, you are entitled to receiving a share of the trading fees.

References
https://medium.com/@komobongsilas/security-tokens-and-the-issue-of-liquidity-25fa00946f0e