Another month has come and gone, and the Digitex Futures Platform continues to grow. With over 1,600 active users now onboarded to the Exchange, volume is starting to ramp up significantly. Every day brings us closer to the anticipated public launch and realization of the full potential that is the Digitex Futures Exchange.
This time last month, we attempted to quantify this potential by analyzing the first 30 days trading volume on the platform. In the previous report, we used the information available from the phased on-boarding. Mapping the number of registered users with the daily transaction volume of the exchange, we were able to extrapolate this data and estimate the potential 24-hour volume generated by a larger user base. This report estimated that with an arbitrary 5,000 users Digitex could potentially generate $1 Billion USD in daily volume transacted.
We also outlined that this projection was highly speculative, as it was based on only a few data points. It also held the assumption that future traders would operate at the same trading rate as the initial batches of onboarded traders to the DFE. We promised to continue to monitor and amend this projection over the coming weeks, so here we go with a second round, based on another month’s worth of trading data.
64 Days – 1070 Traders
As touched upon above, the phased onboarding of users has allowed us to investigate the relationship between userbase and daily volume. With 9 different onboardings and another month of trading, we now have more than twice as much data available to expand upon the previous analysis. Below are two graphs representing the updated metrics:
The first plot overlays the number of traders registered on the Digitex Futures Exchange with the daily 24-hour volumes transacted by that number of users. The second plot groups the daily volumes traded into their respective user brackets to show the range of volumes traded as each additional batch of users are onboarded.
What is immediately evident is that an increase in active traders’ correlates to an increase in 24 Hour Trading Volume. Thus far, with a user base of only 1,020 traders Digitex is generating daily volumes ranging from $100M to $140M.
The trend shown after 64 days is consistent with what we previously projected after 31 days of trading. Updating the projection for a userbase of 5,000 active traders we still see the same trajectory and an estimate of $1 Billion USD daily volume.
The DGTX Potential
So what does all of this mean for the DGTX token? At the time of writing, the Digitex team is laying the groundwork in preparation for a successful public launch, the extent of which should not be underemphasized. With more than 29,000 test-net users and over 28,000 telegram members, it is evident that a demand exists to trade on this platform.
If Digitex can convert 35% of current testnet users to the mainnet, that would result in a userbase of 10,000 users and potentially generate a daily BTC Perpetual Futures volume of over $2Billion USD. This would place Digitex in the top three perpetual futures exchanges currently in the market.
That alone would promote further adoption – if not mass adoption – as DGTX rises through the rankings.
With a testnet conversion of 75% (20,000 users) we could project from the current data that a daily volume in the region of $4Billion USD is achievable, assuming the same rate of trading amongst future traders that currently exists in our 1,020 mainnet users.
This would place Digitex Futures as the leading Bitcoin Perpetual Futures Exchange on the market.
Although this model is still in the early stages of its development, it is based on the current daily volumes that are actually being generated by the current users of the platform, and, the numbers don’t lie.
What this tells me is that there is one simple thing that each of us current DGTX holders should do in order to help our investment succeed:
Sign-Up and use the mainnet when it is available.
The reason this is the single most important thing for the community to do is because it promotes adoption.
Demand and Adoption
When new innovative products are introduced to a market they go through what is known as The Technology Adoption Lifecycle. This is detailed by Geoffrey A. Moore in his book Crossing the Chasm.
In this book, he outlines that the market is split into 5 key market segments that a product must conquer in order to achieve its full potential. These categories exist due to human personalities where Innovators and Early Adopters are higher risk higher reward thinkers who adopt technology because they see its potential and believe in its future. They’re prepared to deal with the kinks of up-and-coming companies because they know that it will have a bright future. If you’re reading this, the chances are you’re in one of the first two categories of the market, accounting for only 16% in total.
The Early and Late Majority of the market account for the majority of the Mainstream Market and 68% of the total market. The Early Majority is the most important market segment to win over. When companies successfully navigate the chasm and are successfully adopted by the mainstream market, they can see exponential growth.
At this moment in time Digitex Futures is preparing to cross the chasm.
To achieve mainstream adoption, the Early Majority likes to see that the product offers a whole solution, they take advice from other like-minded people and once they see that it is being adopted they will follow suit.
Therefore, the key to unlocking the DGTX potential is to cross the chasm and win the adoption of the mainstream market. To do this, the mainstream market needs to see that the product is in demand and providing a whole solution.
Once the Early Majority see Digitex Futures Daily Volume rising on the CMC rankings, adoption will follow. The best way to achieve this is simply trading on the Exchange.
The DGTX Token Price
The big question – how does this relate to the DGTX token price? In this report, we used the current data to extrapolate the potential volume of Digitex Futures with user adoption. This suggests that Digitex can compete as a top Exchange in the BTC Derivatives markets. The current market-leading exchanges currently have 24 Hour Volumes in the region of $1.7Bn to $4.4Bn which results in 24hr Open Interest ranging from $561M to $1Bn.
With open interest being the sum of all open positions on an exchange, it serves as a great indicator of the demand for the DGTX token.
Taking the values above as a base for open interest on the Digitex platform and using the token velocity model previously developed, we can project a price for the DGTX token.
This projects that if the Digitex Futures Exchange can grow to compete as a top-three BTC Derivatives Exchange, the utility demand for the DGTX token will drive the price to be in the range of $2.00 – $7.00.
Although this model is not perfect, it highlights that using the DGTX token to trade creates a demand for DGTX. As Digitex Trading Volume and Open Interest grows, its limited supply will begin to get throttled. To be able to continuously facilitate such large monetary transactions, with its limited supply, the DGTX token must appreciate in value.
If you’ve been waiting for the DFE to onboard you, then you don’t have to wait much longer. We’re onboarding waitlisted and testnet users over the coming weeks ahead of launch. Before we open to the public, all mainnet users will first need to create a testnet account so we can onboard you. So make sure you’ve signed up to avoid any delays in getting you onto the mainnet.