Frequently Asked Questions

Lykke is a movement to build a single global marketplace with equal access for all. We start with a foreign exchange and expand to equities, fixed income, commodities, and other asset classes.

Lykke Corp, incorporated in Switzerland, issues its shares in the form of Lykke Coins on the Blockchain.

Lykke Corp (Lykke AG) is a Swiss-registered corporation with subsidiaries in Vanuatu, Cyprus, and London. For more corporate information, please refer to http://lykke.world.

Lykke Corp is a FinTech company that develops a trading platform (see our Github). The company’s subsidiaries, which are licensed as financial companies, provide broker and trading services for clients. All possible asset pair types are tradable: fiat fx to fiat fx, fiat fx to crypto, and crypto to crypto.

Lykke is not related to Oanda.

Lykke bridges conventional finance with digital assets on the public Blockchain. To ensure this, we plan to be fully compliant with the regulatory regimes in all jurisdictions where Lykke operates.

In the grand scheme, banks may act like digital assets issuers, liquidity providers, and payments facilities.

Lykke is much more than a traditional securities business. We believe that, in the future, many assets will be digitized, from real estate to freelance time, to music IP rights, to rent, to say nothing about SME private equity, project financing, bonds, community coins, and many others. Our users will be able to trade them all.

We will make money by providing liquidity, issuance services, and consulting.

We believe that the UK provides the best-in-class regulatory environment for this kind of trading facility for institutional clients. The compliance is hard, but it enables us to streamline the processes and operations to provide a high-end service to our clients.

Our corporate organization is inspired by the mechanisms of nature and its unmatched efficiency. The crowd-based approach opens our organization to contributors from around the world and provides us with speed and versatility.

Open source software nurtures transparency, enables people from around the world to contribute, and makes it easy to integrate our services with other applications.

Sure, why not? The space needs to be competitive. The software code is only one of the ingredients that makes Lykke special.

Lykke earns revenue from value-add services such as liquidity provision, issuance services, white-labeling, and B2B consulting.

We will first focus on FX, where the daily volume is 4 trillion USD. Lykke will be a profitable company with a market share of 0.025%.

Our marketplace is highly efficient and seamless. We provide immediate delivery and settlement; there is no secondary risk as is typical for the traditional banking system. The spreads on our marketplace and transaction costs are low, thanks to our efficient corporate structure and new technology.

Lykke is not a cryptocurrency or distributed ledger technology venture; we are building a marketplace that integrates seamlessly with the existing financial system. Our trading venue uses a matching engine to cross buy and sell orders. The accounting, delivery, and settlement of traded assets use distributed ledger technology. Our initial focus is the foreign exchange market with a daily transaction volume of 4 trillion USD, the biggest financial market in the world.

Lykke traces its history to 1985, when our founder and CEO Richard Olsen formed Olsen & Associates, or O&A. This firm collected tick-by-tick foreign exchange data and built an online information system with real-time forecasts and trading recommendations. In 1995, O&A organized the first high-frequency finance conference, making a large tick-by-tick data set available to academia. In 1996, Richard co-founded OANDA, a spin-off of O&A. First, OANDA introduced a currency converter, which was an instant success. Then, in 2001, OANDA launched a foreign exchange trading platform with second-by-second interest payments and uniform spreads for all ticket sizes. There was no price discrimination for small traders. Richard is passionate about reforming the financial industry and creating a seamless marketplace, where any asset can be exchanged against any other asset at minimal cost. 

A commercial enterprise has equity with shares that can be traded in the market. In the case of Lykke, these are our Lykke coins. The market value of our coins mirrors the efficiency and success of Lykke. This is a clear-cut metric that aligns interests. 

It is not technically possible to steal your colored coins from Lykke Wallet unless your private key is compromised (for example, if someone has access to your paper backup). The wallet has similar security to Bitcoin. The private key is not to leave the device. Nevertheless, if something like this happens, please send an email to support@lykke.com immediately, so that we may take measures to lock your trading account.

No. The special code that makes your colored coins yours is in the OP_RETURN field of the Bitcoin transaction. (We use the Open Asset protocol to encode the digital asset metadata). We have designed the wallet so that it will not transfer to a normal Bitcoin address. For the moment, the only wallets that accept our colored coins are the Lykke Wallet and the Coinprism wallet.

Yes. You can transfer Lykke coins to another Lykke Wallet or a Coinprism wallet.

Yes, but please keep in mind that security does not stop with us. While Apple phones have very good security to prevent malware from recovering data from an app, you should keep a lock code on your phone and take other measures to prevent people from accessing your wallet.

Also, it is very important to create a paper backup of your wallet by writing down your unique twelve-word seed. This seed will help you to recover your private key in case your device is lost or stolen.

Assuming there is no malware already on your computer or phone, there are two ways to do that.

One way is to record your wallet’s twelve-word seed in a few different places, and then delete the wallet from your phone. You can always re-download Lykke Wallet and recover your coins using the seed.

Alternately, send your coins to a Coinprism wallet, and back up your private key there to an offline device.

ICO stands for Initial Coin Offering. Lykke offered 30 million Lykke coins (LKK) from September 13 to October 11, 2016, at a price of 0.05 Swiss francs per coin, representing approximately 2.33% of Lykke’s equity.

They are colored coins: very small fractions of a Bitcoin (like a penny’s worth), with attached codes that specify the value of the underlying asset. Learn more at https://github.com/OpenAssets/open-assets-protocol. 

A Lykke coin (LKK) is a cryptographic token that represents ownership of Lykke, a Swiss registered corporation. It is not a currency. There is no mining, and there are no other exchanges that accept it (although that may change). One hundred Lykke coins represents a single share of Lykke Corp. Read more at our Information Memorandum

No. In a traditional fundraise, early investors get preferred stock in exchange for cash. In this kind of early public arrangement, investors get liquidity instead. All coins have exactly the same rights.

Yes. They are divisible to six decimal places. This is probably overkill, but it enables people to buyLykke coins with an even amount of any currency. In most cases, it doesn’t make sense to divide a Lykke coin, but you could if you wanted to.

We priced our ICO in reference to other FinTech companies that have raised or are raising money. The FinTech market is active with many different startups at various stages of development, so we had a number of companies that we could compare with. We also used standard present value calculations based on the revenue forecasts for the next three years. The valuation of Lykke was derived from these two methods and then validated by professionals with extensive experience in startup and growth companies.

Yes, the coins are traded on the open market of the Lykke Exchange. You can download the Lykke Wallet, deposit Bitcoins, send a SWIFT bank transfer or make a credit-card payment, and buy Lykke coins on the Exchange page.

Lykke coins must be purchased using a wallet that can hold colored coins on the Bitcoin blockchain. At the moment, this includes Lykke Wallet for iOS and Android  and the Coinprism wallet.

Yes. Using any other colored coin wallet, you will need to provide a fraction of a Bitcoin to pay for the transaction.

The price varies with supply and demand. Please check here

Yes. If you own Lykke coins, you are entitled to become shareholders of Lykke Corp, provided that you submit to our minimum KYC requirements. Shareholders have additional rights, such as voting and receiving dividends.

The KYC process is a standard AML/CFT measure required by all financial companies and banks. This includes the verification of your ID and proof of residence. An additional biometric factor (in the form of a selfie photo) is added to secure your account.

Your personal data is encrypted and stored on a standalone server. Only our compliance officers have access to it. 

No. All share certificates are being held by the secretary. The coins represent the value of the company, though the share certificates are legally required to be maintained.

Yes. They will when the company decides to pay profits to investors, rather than re-invest to fuel growth. As with most startups, dividends may be some time away.

Yes. At the moment, there are 12,856,900 shares of stock. The company issues new shares on occasion, usually to bring on new investors. Now that the company’s shares are publicly traded, the company will, in the future, set up a voting mechanism for existing coin holders to vote on matters like this. Be sure to see the Shareholder Memorandum for details.

Potentially, but unlikely. As with any stock, instant liquidity is not guaranteed. Lykke has reserved ten percent of the funds raised for a liquidity pool, and we will be raising more outside funds for an investment pool that will purchase Lykke coins. In general, the company aims to provide as much liquidity as possible. As more people own and want the coins, liquidity will increase. If, for some reason, fewer people want the coins, liquidity will decrease.

Yes. We plan to report annually via our Web site. You may find our 2015 Annual report, 2016 Annual report there as well.

The shareholder’s meeting will be held electronically. Assuming that we know who you are and how to you reach you, we will invite you to this meeting at least 20 days in advance, based on the number of coins that you own. We also plan to have onsite events, which we hope will be an opportunity for learning, meeting people, creating new opportunities, and extending our community.

Check out the News tab on your MyLykke page. Also, if you register your Lykke Wallet, you’ll get our newsletter (assuming that you haven’t unsubscribed from it).

Just put in a sell order using the Exchange page of your Lykke Wallet.

The total number of Lykke Coins issued is 1,285,690,000. The ownership structure is stored on the Blockchain: https://www.coinprism.info/asset/AXkedGbAH1XGDpAypVzA5eyjegX4FaCnvM/owners.

This may occur only if the shareholders vote for it. 

The colored coin protocol enables any issuer to use a Satoshi (1 millionth of Bitcoin) as a vehicle for an IOU. The issuer specifies the terms and conditions of the IOU, which can be virtually anything.

Bank AAA, for example, can specify the following: The holder of this colored coin is entitled to receive 1 million USD upon redemption.

If Katherine has a bank account with Bank AAA, she can request that her assets in the amount of 1 million USD be converted into the bank’s colored coin, worth 1 million USD. She can then use the bank’s colored coin to buy and sell other colored coins from this bank, or from any other bank, or from any other issuer, for that matter.

Settlement with the real world is straightforward: Katherine simply converts her colored coins into a regular balance of USD in her account at Bank AAA.

It is obvious that such a system only works well if the marketplace offers efficient price discovery. Lykke plans to implement a new type of matching engine (price, time, and spread queuing), which is more efficient than the traditional approach (only price and time queuing) in preventing price spikes.

See the Price-Spread-Time priority White Paper.

We reward market makers quoting narrow spreads with priority in the queuing system. This improves the quality of our flow and enhances price discovery, resulting in lower spreads, reduced micro volatility, and higher volume throughput. Traditional matching engines queue on the basis of price and time, which creates an unfair advantage for high frequency-traders.

A financial market needs to provide liquidity and ensure that there is a buyer whenever someone wants to sell. Interest rate payments are a core mechanism to incentivize market participants to buy or sell a risky asset. A major innovation of the Lykke marketplace is intraday interest payments. The batch-based system of the existing market infrastructure has been an obstacle to intraday interest rate payments and has been a major reason for the disjointed price movements in periods of crisis.

Distributed ledger technology is the protocol of decentralized data storage in a blockchain, where the consistency of data is guaranteed by the cryptography and consensus of multiple nodes. The pioneer and the most popular implementation of the DLT is the Bitcoin Blockchain.

Distributed ledger technology offers immediate settlement in a non-centralized framework at ultra-low costs. This will pave the way for the emergence of a global marketplace for all asset classes and instruments that use this system.

Distributed ledger technology facilitates step-by-step transactions. If contracting parties A and B decide to exchange assets X and Y, the transfer occurs synchronous and step-by-step; it cannot happen that just one side of the transaction is executed. Distributed ledger technology operates on a global scale and performs the role of a notary service. The technology is highly efficient, and it dramatically reduces risks associated with any type of transaction.

Distributed ledger technology is one of the most profound innovations of humankind, because contracting parties can execute transactions step by step, independent of location, while maintaining direct ownership. The step-by-step procedure is a safeguard against any misbehavior or fraud between transacting parties and dramatically reduces the risk associated with transactions. Direct ownership reduces complexity.

Distributed ledger technology may be used to record ownership of literally any type of financial asset. A new global marketplace will evolve, where all types of assets and instruments will be traded. Literally everyone will have direct access to this market, as is the case for the Internet itself. The market will be a level playing field, where any financial asset can be traded directly for any other asset and instrument. The operational efficiency of the marketplace will foster liquidity. The marketplace will be universal and ubiquitous, just like the Internet, and any asset or instrument will be exchangeable for any other asset or instrument.

The refund transaction guarantees the return of Bitcoins in case of emergency or the loss of your private key. A refund transaction can be broadcast after a specified refund delay. Read more.

No. It uses the colored coins or tokens of other blockchains, such as Bitcoin and Ethereum.

In theory, yes, as long as the blockchain supports issued coins. In practice, not all implementations make sense.

Currently, we use Bitcoin’s Open Assets Protocol and the Bitcoin Blockchain for settlement. We plan to expand to Ethereum.

Since Lykke settles all transactions on the Blockchain, the block size limit puts constraints on the number of transactions that may be processed. We are developing off-chain protocols for upscaling capacity. See our white paper for details.

Lykke was the surname of Richard's grandmother on his father's side. The word means luck and happiness. His father explained to them that they are Lykke.

Richard has pledged his shares to a social cause after fulfilling his other responsibilities.

We use Lykke coins to reduce our dependence on external funding. If a holder of Lykke coins wants to convert these coins into CHF, EUR, USD, or BTC, Lykke will make the conversion and transfer the money to the designated address.

We dream of transforming the world into an Amazon rain forest, so there is no lack of work. We invite you to become a Lykke citizen and contribute in any way that you think is relevant. There is work at all ends, which needs to be done; just take the initiative. We want to emulate the success of Wikipedia, where people from around the world, under no one’s direction, added a tremendous amount of value to the overall goals of the organization. You are invited to initiate new projects. We have a budget of Lykke coins to award to new projects, and there is also a scheme of rewards at daily, weekly, and monthly intervals to show appreciation for voluntary work.

Today, banks spend massive resources on inhouse operations. The adoption of distributed ledger technology will lead to massive cost reductions and enable banks to focus on their core expertise of managing risk.

Colored coins issued by banks are money market instruments. For example: Bank AAA will pay xUSD in n days from time t, when the holder of the colored coin notifies the bank that he is cashing in. Banks will issue colored coins for any currency and any maturity. Initially, the Lykke marketplace will trade so-called spot colored coins, which can be cashed in according to terms and conditions as a regular foreign exchange spot transaction. In the medium term, there will be colored coins for any maturity, from ultra-short time periods of 10 minutes to one hour, 6 hours, and 24 hours; to days, weeks, and months. There will be a market for colored coins with different maturities. We will have a yield curve that starts intraday and extends to months and years.

The colored coin protocol (www.coloredcoins.org) makes it easy to use distributed ledger technology for any type of financial instrument. A financial institution can, for example, buy one Bitcoin on the market and then divide this one Bitcoin into one million increments. It can then use each one of these increments as a so-called colored coin and specify with the colored coin protocol the terms and conditions of that particular financial instrument.

A colored coin issued by the financial institution may represent a share of the company itself, but it doesn’t have to. It can represent any type of IOU, such as the commitment to make a payment of x EUR in n days to the holder of the colored coin, if so requested. The colored coin protocol makes it possible to use the distributed ledger technology to deliver and settle any type of financial transaction of any asset within minutes. Colored coins can have International Securities Identification Numbers (ISINs) to map them into the existing back office and risk management systems of banks, making the system compatible with the existing financial architecture.

Issuers of colored coins will buy virtual currencies to securitize financial assets, but they can use a small fraction of a Bitcoin to issue a colored coin. One Bitcoin can be sliced into one million increments; so, in theory, a colored coin needs to include only 1 millionth of a Bitcoin (1 Satoshi). If Bitcoins trade at a price of 300 USD per Bitcoin, the intrinsic value of the virtual currency per colored coin will be 0.0003 USD, a negligible amount compared to the market value of the colored coin. The price volatility of Bitcoin will therefore not impact the market price of colored coins.