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Richard Olsen: Reinventing Markets Through Innovative Financial Engineering

As a follow up to OANDA, Richard Olsen founded Lykke in 2015 with the aim of reinventing markets through innovative financial engineering. Lykke is operating a crypto exchange that offers deep liquidity and narrow spreads with no trading fees that is used by retail users and institutions. Lykke also partners with institutions offering them transformational white label solutions based on its modular and scalable open-source technology that fuses deep financial expertise with white-label platforms. Our trusted Swiss heritage and careful adherence to the legislative landscape make Lykke an ideal partner for leading businesses looking to embrace the power of the blockchain and beyond.

Lykke’s goal is to offer retail users a reliable and trustworthy crypto exchange where users can buy and sell cryptos manually or via API at the best possible terms in the industry without any complexity. In addition, Lykke has a broad offering for companies be they established large banks or up and coming startups looking for reliable technology platforms to enter the blockchain space with its many new opportunities.

Tell us about yourself?

I am a serial entrepreneur in the fintech space. My first company was focused on building a real time information system online forecasts and trading recommendations. We eventually had over 60 of the large banks in Europe as our costumes. This venture then led to the creation of OANDA, a highly innovative foreign exchange broker, and most recently to the launch of Lykke. My motivation has always been to better understand how financial markets really work. I never believed what textbooks teach their students and wanted to discover hands on how markets really function and then use my insights to create better products that make the financial world more efficient and transparent for the benefit of everyone. As we experience every day financial markets are far from perfect and there is a lot of room for improvement; so lots of work needs to be done.

If you could go back in time a year or two, what piece of advice would you give yourself?

Two years back – we were betting on rapid approval from the Swiss regulator of the OTF license – I did not foresee that there would be continued delays in the application process. I should have anticipated that the application process would continue to be extremely slow and make alternative arrangements. This is history – the world is turning full circle and now our long term strategy is gradually bearing fruit. Institutions and retail users are gradually understanding what we are trying to do: build a lean and efficient exchange and offer corporations transformational solutions that are cost efficient and therefore do not come with high fees and heavy marketing spend, but relies on word of mouth.

What problem does your business solve?

Our crypto exchange offers no fee trading. This is a big benefit for the trader as fees are added costs turning a winning trade into a losing trade. Equally important, charging no fees makes trading on our exchange simpler; users do not have to worry about maker and taker fees. Who really understands these terms? Crypto trading should be something for everyone and not the nerd.

What is the inspiration behind your business?

I am inspired by nature; the subtlety of how nature solves the most challenging problems. Just think of how a child is born or how a plant grows and reproduces itself. Nature has been super ingenious in how to overcome obstacles and come up with solutions that we could have never imagined.
The world at large appears to be beyond repair, just think of the problem of sustainability, political instability, refugees, working poor, global debt levels and more.

Lykke has this ambitious goal to make the financial system more efficient and equitable, so that it allocates the world’s resources in a fair and equitable way, which today is not the case. I am inspired by the ingenuity of nature in my search for solutions and to build products and services that contribute to the process of reinventing the financial system. We offer retail users highly efficient access to crypto markets with the goal to extend our coverage to other financial products. At the same time we serve large companies and fledgling startups to implement and white label our products so that they can also contribute to the process of innovation.

What is your magic sauce?

Our secret sauce has several ingredients: as mentioned before free trading makes trading easier and most important more profitable for our customers, the traders. We can operate such a competitive exchange, because we generate revenue by netting the flow of buying and selling; we are able to do so thanks to our deep expertise of how financial markets really function. There are many more ingredients to our secret sauce: we embrace open source software to share knowledge and increase efficiency, the scientific rigor in our product development, we have a team of experts working from remote locations prior to the onset of COVID with the home office to attract the best possible talent.

We differ from our competitors, because we are more than a crypto exchange; we are building a broader offering so that cryptos and utility tokens, etc. can be seamlessly integrated into our everyday lives and ultimately contribute to a comprehensive financial system akin the the Internet creating a global ‘Intermarket’.

What is the plan for the next 5 years? What do you want to achieve?

Next 5 years offer unique opportunities – ideally we would like to contribute to reinventing financial markets and creating a global Intermarket, where literally every financial asset, legal right and more are freely tradable with narrow spreads. The Intermarket should be a level playing field, where resources are allocated efficiently creating the foundation for a sustainable and equitable future. Ideally Lykke will be a facilitator of this new Intermarket operating its own exchanges for both innovative cryptos, utility tokens but also traditional financial products and more. At the same time, we hope to create a broader product offering with open source software enabling other enterprises and organizations to participate in this new infrastructure.

What is the biggest challenge you’ve faced so far?

The biggest challenge has been communication. The ideas and concepts that I am trying to follow and leverage are simple and subtle at the same time. It is difficult to overcome natural skepticism towards new ideas and get both messages across: the ideas can be successful, but require patience and persistence. Everyone is looking for quick successes; nature teaches us that things take time and initially progress is hardly visible. The second big obstacle has been regulation; the huge cost of getting regulated and complexity of the regulatory regime in one country and even more so in an international setting. Finally, a project that embraces cost efficiency for the end user as is the case for Lykke cannot spend a lot of money in marketing and advertising to attract users. This makes it more difficult to get traction. This is the reason I am grateful to be invited for this interview.

From the very start Lykke had a huge potential and initially the sailing was smooth. We were a successful startup, but morphing into a growth company was stressful and resulted in a long and painful transition process. The long delay in getting regulatory approval was no help to say the least. In the meantime, we have been able to create a solid foundation and are ready to scale; it is time for the market to discover us.

How do people get involved/buy into your vision?

People seeking to diversify their financial risk with crypto or seek to democratize financial markets, please sign up for our exchange and start to use our services. By taking advantage of the benefits of our services, we generate revenue and bringing us closer to funding our expansion plans and making our dreams become reality.

Businesses, governments and other organizations that decide to innovate and embrace the opportunities of the new technology of blockchain and finance, are invited to get in touch with us. Our innovative products and services are ready for rollout and are good backbones for bespoke solutions that give your organization a long term competitive advantage. Please ping us, so that we can give you our expert advice. Last but not least, we are always looking out for passionate collaborators who share a similar vision, so please contact us in our Telegram group or other social venue.

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