Launch of Lykke’s market-maker on Melon protocol
The competition and voting have completed. Winners were determined by the citizens of Lykke City.
Days of the project
Nov 23, 2017 - Jan 16, 2018 (53 days)
Nov 23, 2017 - Jan 7, 2018
Jan 7 - Jan 16, 2018
Lykke and Melonport are planning to combine their strength, making cryptocurrencies accessible to everyone, at low cost, with maximum security, by combining the Melon blockchain software, which enables participants to set up, manage, and invest in technology regulated digital investment funds, with Lykke’s own Alpha Engine, a market-making trading algorithm , that brings liquidity to crypto-markets.
Melonport and Lykke are looking for a curious, energetic, and ambitious developer to connect Lykke´s market-making algorithm to the Melon protocol. We need a developer who is fascinated by blockchain technology and enjoys performing thorough research and exploring new concepts.
Melonport – Melon
Melonport offers an easy, low-cost way for participants to set up, manage, and invest in technology regulated digital investment funds.
Blockchain software called Melon enables code features or characteristics of an investment strategy. A feature could be a certain combination of assets, risk parameters, accounting software, regulatory aspects, specific exchanges such as GDAX and Kraken, and so on. The fund manager then can choose between these different features and set up his fund. If the fund manager specifies a feature describing two exchanges, for example, trade is available only on the two stated exchanges. Likewise, if assets are specified, only these assets may be traded. This modular approach to set up a fund offers benefits to investors as well. Investors can be sure that the fund manager acts only within the range of the chosen features, which is enforced by a smart contract.
We want to run the Alpha Engine as a feature on Melon. For this to happen, the Alpha Engine needs to be made compatible with Melon.
Lykke – The Alpha Engine
The Alpha Engine, Lykke’s market-making algorithm, generates profit by providing liquidity to crypto markets. It consists of five main parts: event-based time, market overshoot patterns, cross-exchange arbitrage, early liquidity signaling, and inventory management.
- Entry and exit points. The algorithm finds entry and exit points, dissecting the price curve with the help of intrinsic time.
- Providing liquidity. Orders are placed into the market opposite to short-term trends, thereby providing liquidity. This is profitable through the existence of stable market laws, specifically the length of overshoots.
- Risk mitigation. Early liquidity warnings, as well as continuous position monitoring, are used to adapt order sizes to current market situations.
Alpha Engine System inputs and outputs: Alpha Engine as a system to be integrated, has several inputs and outputs. Its main input is a stream of tick prices for a particular trading instrument, every tick price contains its timestamp, bid and ask prices. Based on those tick prices Alpha Engine generates trading signals. Every trading signal is a data structure with a command (create or cancel the order) and order description. Order description is: order id, price, volume, market or limit, buy or sell. github.com/VladUZH/AlphaEngine
This strategy is theoretically sound and backed by empirical proof.
We invite all developers to familiarise themselves with the Melon protocol and propose a design and initial plan for how to run the Alpha Engine as a Melon feature. Upon successful submission, you will have the unique chance to work with Melonport and Lykke to implement this project.
- Being able to work with others to implement a challenging project and provide feedback towards scaling from a small live fund to the largest market-making smart-contract run fund in the world
- Being able to utilize the Melon.js library to launch and run the Lykke Alpha Engine on the Melon protocol
- Being able to move easily between the Lykke and Melonport work environments and spend time in the Lykke and Melonport offices to get a good grasp of running the Alpha Engine on Melon
- Being able to simulate the managed account process from start to finish (invest/redeem)
- Being able to obtain a real track record on the Ethereum blockchain for Lykke to market to outside investors
- Personal or industry market making and trading experience
- Ability to understand the main concepts behind exchanges and order books and the methods to manipulate both
- A sharp eye for detail and spotting errors
- Ideally, some level of understanding around blockchain and Solidity smart contracts
- Sponge-like intellect, with the ability to learn quickly and grasp new concepts
- Ambitious personality, with the willingness to own a project and see it succeed
- Strong communicator with both teams (Lykke/Melonport)
For more information on Melon:
For more information on Lykke and Alpha Engine:
The first 4 contestants will receive a prize money in 4000, 1500, 1500, 1500 $.
A few disclaimers:
There is no guarantee of winning a prize. The prizes are only awarded to entries that the Lykke judges find worthwhile. Prizes are awarded in Lykke coins, which may be redeemed for currency and sent to your bank. You must be at least 18 years of age. You must not submit twice — your first submission is the one that counts. You will be responsible for declaring your own income to your local tax authorities. All submissions will be disclosed to the public. The prizes are given at Lykke’s sole discretion. The decisions of the judges will be final — there is no appeals process if your project does not win a prize. No other compensation will be given at this stage.
For this project, none of the submitted results matched our experts expectations, so we decided not to award the first prize.