The only crypto asset pricing service built within an Type II SOC infrastructure.
Reliable
Transparent
Complete transparency into pricing methodology and individual price calculations.
Fair Market Value (FMV) pricing data for crypto assets
Be aligned to GAAP & IFRS guidelines.
Increase reporting accuracy & reduce risk to your business.
Strike End of Day NAV
Deliver Client Reports
Did you know that GAAP & IFRS requires an executed price to determine Fair market This means any average price (such as VWAPs) are not FMV.
Lukka developed a one-of-a-kind pricing methodology for crypto assets to satisfy this need. Its Fair Market Value (FMV) approach allows you to put actual executed prices on your books to satisfy reporting standards.
Use actual exchange executed prices to strike end of day NAV for your fund or fund clients.
Accurately value assets on your financial statements or reports.
Value your clients' holdings and provide them with accurate reporting and transparency.
Reference & Verify
Use a secondary pricing source to reference against or verify other pricing services.
We offer minute-by-minute post-trade pricing for hundreds of crypto assets. Lukka Prime give you the ability to put USD asset values on your books for crypto assets that have no fiat trading pairs.
Perform Financial Reporting
Lukka Prime
Become a redistribution partner.
Eliminate the worry & scrutiny of digital asset pricing & valuation.
Lukka Prime is integrated into all Lukka software products.
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In absence of a primary market, closing day, and other traditional factors needed to determine the FMV of an asset, Lukka Prime is designed to align to GAAP and IFRS guidelines in order to support post-trade reporting.
Coverage of the most liquid crypto assets
Be Audit Ready
Lukka Prime has been used as a pricing source in multiple audits with some of the largest crypto asset companies in the world
Align to Accounting Standards
Lukka Prime is the only crypto asset pricing source specifically aligned to global accounting standards for Fair Market Value
Trusted by
How it works:
The Lukka Prime Methodology applies a five-step weighting process for identifying a principal exchange and the last price on that exchange. A Base Exchange Score (BES) is assigned in order to select the most appropriate primary exchange and then an executed exchange price is assigned for each covered crypto asset at a specific time.
10+ raw exchange pricing feeds
Five-step weighting process
Executed FMV prices per asset
Assign each exchange for each pair of currencies a Base Exchange Score (BES) reflecting static exchange characteristics such as oversight, microstructure and technology - all done per asset.
Adjust the BES based on the relative monthly volume each exchange services. This new score is the Volume Adjusted Score (VAS).
Decay the adjusted score based on the time passed since last trade on exchange. Here, we are assessing the level of activity in the market by considering the frequency (volume) of trades. The decay factor reflects the time since the last trade on the exchange. This is the final Decayed Volume Adjusted Score (DVAS) - tracks freshness of data by tracking most recent trades.
Rank the exchanges by the DVAS score and designate the highest-ranking exchange as the Principal Market for that point in time – principal market is exchange with highest DVAS.
An executed exchange price is used for each covered asset representing FMV a specific time.
What is the Base Exchange Score and how is it calculated?
The Base Exchange Score (BES) - This reflects the fundamentals of an exchange and determines which exchange should be designated as the principal market at a given point of time. This score is determined by computing a weighted average of the values assigned to four different exchange characteristics. These characteristics are as follows:
Oversight - This score reflects the rules in place to protect and to give access to the investor. The score assigned for exchange oversight will depend on parameters such as jurisdiction, regulation, ‘‘Know Your Customer and Anti-Money Laundering Compliance’’ (KYC/AML), among other proprietary factors. For example, we account for ‘‘jurisdiction’’ by using a basic hierarchy.
Microstructure Efficiency - The effective bid ask spread is used as a proxy for efficiency. For example, for each exchange and currency pair, we take an estimate of the ‘‘effective spread’’ relative to the price.
Data Transparency - Transparency is the term used for a quality score that is determined by the level of detail of the data offered by an exchange. The most transparent exchanges offer order-level data, followed by order book, trade-level, and then candles.
Data Integrity - Data integrity reconstructs orders to ensure the transaction amounts that make up an order equal the overall order amount matching on both a minute and daily basis. This would help expose nefarious actions such as wash trading or other potential manipulation of data.
How is Fair Market Value traditionally defined?
According to US GAAP and IFRS guidelines, the most appropriate valuation methodology is a price that is highly correlated with an executable price in contrast to an average price (including a VWAP, TWAP, etc) which is not considered to be fair market value.
Additionally, ASC 820 (FASB, 2011) indicates that if there is a principal market for the asset or liability, the fair value measurement shall represent the price in that market. For a benchmark to be relevant, the benchmark price should be at least approximately tradable on an accessible market.
Is Lukka Prime aligned to US GAAP & IFRS guidelines?
Yes, it was specifically designed to align to GAAP and IFRS in absence of formal standards for crypto markets and then it was tested and challenged by thought leaders, accounting & audit firms, and industry experts for two years before it was offered as a data product.
How does Lukke Prime compare to SEC guidance?
§ 270.2a-5: “The board of the fund must determine fair value in good faith for any or all fund investments by carrying out the functions required in paragraph (a) of this section. The board may choose to designate the valuation designee to perform the fair value determination relating to any or all fund investments, which shall carry out all of the functions required in paragraph (a) of this section, subject to the requirements of this paragraph (b).”
Lukka Prime is aligned to IRS rules?
Yes, as of April, 2021, IRS FAQ’s 10-13, 15, 17, 18, 20, 21, 24-28, 32, 35, 40, and 46 all specify using a fair market value methodology to determine taxable income, gains and losses on crypto asset transactions when possible.
When could I use Fair Market Value (FMV) pricing data instead of a VWAP or other average?
A FMV should be used when the party has an obligation to comply with US GAAP or IFRS, or when the application of the data requires an executable market price such as when striking NAV, (Net Asset Value), performing financial reporting, tax compliance, or as a best practice when creating indices. Indices may choose to use a FMV as a best practice because it is compatible with how fund assets are valued and because an actual executable price is tradable for hedging purposes.
What are VWAP, TWAP, and other averages used for in contrast to determine fair market value prices?
VWAPs are more commonly used for pre-trade analysis, certain instances of transaction cost analysis, and when the application of the data does not require an executable market price. TWAPs and VWAPs do not represent real, executed prices - the averages usually don’t actually exist in the market as tradable prices.
What primary markets are included in Lukka Prime methodology?
As of Q2 2021, Lukka Prime considers Binance, Bitfinex, Bitflyer, Bittrex, Bitstamp, Coinbase Pro, Gemini, HitBTC, Huobi, Kraken, KuCoin, Poloniex. Lukka Prime is rebalanced quarterly and ecosystem changes, including DEXs are considered. Read more about Lukka Prime, see the latest updates, or download the white paper here.
How often is the Lukka Prime exchange composition reviewed?
At minimum the Lukka Prime steering committee holistically reviews the exchange composition quarterly. However, the steering committee meets monthly and will review and adjust the exchange composition more frequently, if required.
What kind of data quality checks are performed for Lukka Prime?
Both algorithmic and manual quality checks are run during and after the creation of Lukka Prime FMV prices. These checks evaluate things such as data quality from the member exchanges and significant price deviation from market trading activity.
If the primary market has materially deviated from the other larger volume exchanges, will it still be selected as the primary market?
Not necessarily, the primary market is determined by a range of factors, including jurisdiction and volume. An exchange can become the primary market only if the cumulative weighted sum of all the qualitative and quantitative factors is the highest amongst all exchanges. Volume alone will not necessarily move the primary market (see “BES” inputs for additional factors).
What about price challenges?
External price challenges can be sent to [email protected] When a price challenge is received, the Lukka data team will respond within 24 hours or within the appropriate timeframe as described any contracts or agreements. The Lukka data team will perform an independent review of the price challenge to ensure the price is representative of the fair value of the market. Any price challenge escalations will be reviewed by Lukka’s Price Challenge Committee, which is responsible for reviewing any escalation evidence and determining if any changes to the price need to be made. This committee is made up of Lukka employees, including at the senior and executive level. If the committee determines that a price must be changed, the pricing feed will be corrected, customers will be notified and will have the option to access the updated price.
How are exchanges evaluated for regulation and oversight within the Lukka Prime methodology?
Factors such as exchange jurisdiction, local regulation, and Know Your Customer (KYC) and Anti-Money Laundering (AML) are among the factors considered when evaluating exchanges for the primary market.
How does Lukka Prime deal with price spikes or price outliers?
The Lukka Prime methodology algorithmically evaluates and eliminates (when appropriate) price spikes and outliers in trade data. Parameters are set so that the Lukka Prime FMV price does not deviate significantly from market trading activity. Note, these events are very prevalent in crypto markets.
How do decay rates work?
Decay rates are determined by looking at the time between trades compared to the most recent trade on the exchange. Please read the Lukka Prime Whitepaper to further understand how decay works.
Is Lukke Prime aligned with IOSCO Principles for Financial Benchmarks?
Yes, Lukka Prime is closely aligned with IOSCO Principles for Financial Benchmarks although not formally certified at this time.
