The Digitex Futures team announces with great regret that the much-anticipated launch has been postponed until further notice. The founder and CEO Adam Todd recorded an explainer video and public apology, which you can see below. He says that he takes full responsibility for placing his trust in the wrong developers, missing the launch, and letting the token holders and the team down.
Development projects are often delayed due to various reasons. However, the Digitex team is fully aware that its credibility and reputation are now in question. After missing the Beta launch deadline earlier in the year, the company was extremely cautious about putting out the official launch date.
The April 30th date was announced only after extensive and exhaustive discussions with the new development team Spotware, to which Digitex had outsourced the final build of the exchange.
However, despite understanding and agreeing to the specifications given to them for the functionality of the exchange and the timeframe, the Cyprus-based developers who had (until now) an unblemished reputation for building robust exchange software, were unable to deliver.
Adam was aware of some key bugs several weeks ago. They had been reported and brought up in face-to-face conversations with the developers in Cyprus. He had all the reassurance that they were being worked on and would be fixed well in time for launch. But with just a few days left to go, Spotware revealed that the so-called “bugs” were, in fact, not bugs, but, in their words, “expected behavior,” and therefore unfixable.
Adam, utterly furious, visibly shaken, and foul-mouthed as ever says “I have been totally blindsided by this, really, really let down by Spotware.”
A List of the Problems One by One
No 24-Hour Volume Figure
As you can see in the video, the first big flaw with the final build of the software delivered to Adam at the beginning of this week is that it is missing a trading volume figure. Obviously, volume is a key metric for assessing market sentiment. But it’s also a key metric for CoinMarketCap since all exchanges are ranked by volume there.
Spotware cannot add a volume figure to the exchange for at least another two months after launch. As Adam says in the video, it’s not ideal, it’s far from ideal, but the missing volume figure in itself is not a deal-breaker.
Missing Spot Price
When you’re trading futures markets, you need to know the spot price of the underlying instrument. According to the original specifications given to the Spotware team, the spot price should appear at the very top of the ladder on the right. However, the developers have now said at the eleventh hour that it’s impossible to add the spot price at the top. Something that the exchange needs and is not optional can only be added with two month’s work.
As a workaround, the developers suggested opening a menu on the left of the interface. You can see the spot price as a bid and ask, where the bid and ask are the same. So, basically, you can see the spot price duplicated on the left if you open up the menu.
In Adam’s words, this interface is, “getting a little screwy now.” You can trade the futures on the right, but the spot price is all the way over on the left. Again, this is far from ideal for user experience. However, the spot price being duplicated on the left, again, would not be a deal-breaker in itself.
Leverage Can’t Be Changed
The leverage is set at 10x and cannot be changed. This means that the company’s plan of allowing traders to set the leverage level they need up to 100x is no longer possible. Once again, according to Spotware, this is something that could be worked on and added within two to three months. So, once again, another major factor detracting from the exchange, but perhaps it could still go live with this so as not to miss the launch date.
Inability to Sell a Contract Bought
The software as it is allows traders to buy a contract, but they can only sell it if they have the same amount of margin again to be able to sell. This means that to get out of a position that you get into, you need more margin. This is completely unviable. Anyone with 1,000 DGTX tokens (which is 10,000 traders to start with) cannot sell a contract once they have bought one as they have insufficient funds.
This problem was spotted weeks ago and was reported as a bug, registered and brought up in face-to-face meetings with the developers. Bugs are common in software development, after all, and Adam was reassured that it was being worked on.
However, on Monday of this week, the Digitex CEO was informed that this was not a bug, but in fact, built into the system. Traders can only sell at market value, not on the ladder but by closing the position. Therefore, traders have no ability to make money except by selling at market value. Moreover, the ladder is rendered completely useless.
This one is an absolute deal breaker for the exchange. In Adam’s words, “If traders can’t buy and sell on the exchange, we have no exchange.”
The Spotware Software Is Built to Charge Commissions
A few weeks ago, Adam noticed a problem with the market makers, which was again reported as another bug. They were losing money instead of breaking even, despite them trading with only themselves on the same account. This money leak was an obvious bug and Adam was assured they were looking into it.
However, with a week to go before launch, Spotware broke the news that this money leak was in fact not a bug and was expected behavior.
Basically, when an order hits multiple prices, like when the market moves, instead of all the orders going in at different prices, the software gives the trader an average price of the full order and then rounds it up or down to the nearest tick size. This is why the Digitex market maker bots were losing $20,000 worth of tokens every day during testing despite them trading only with themselves. This money was being made by the exchange.
In short? They have built an edge into the exchange. It is essentially charging commissions. Let that sink in for a moment.
DIGITEX FUTURES IS A ZERO-FEE EXCHANGE
The Cyprus team tried to reassure Adam that the rounding up or down was nothing to worry about because it is in favor of the exchange. But it is basically just another commission system. The more the trader trades, the more he loses in the rounding issues. Adam points out utterly infuriated, “What part of zero-fee exchange don’t you get?!”
To summarize, the Digitex Futures exchange, if it were to launch next week, would have no 24-hour trading volume, and no spot price. Traders would not be able to sell a contract that they had just bought, nor can they adjust their leverage. Oh, and they are getting charged commissions.
“What the f**k do I do with this?” implores an exasperated Adam. “I’ve been blind-sided here, a week away from the launch and we’ve been delivered a piece of garbage that doesn’t work. It doesn’t work…. We can’t launch this, it’s as simple as that.”
Where Does Digitex Go From Here?
Clearly, the company cannot launch a product that does not work and that charges commissions. So, what is next for Digitex? You can bet that Adam Todd and the team will not take this latest knock-back lying down.
In fact, the company still has the original code base that it built in Dublin with its original development team. This is already, in fact, a functional futures exchange with an attractive and intuitive trading interface that was live demoed in November at the Malta Blockchain Summit.
Adam also reassured the community that Digitex has a very well built frontend and a blazing fast and robust matching engine built in C++. It also has a pre-built back office module that it is plugging into, which means the team is very close to having a fully functional futures exchange that it can put online.
In January 2019, after realizing it was many months away from being able to launch that original futures exchange, the team made a business decision to instead outsource its exchange technology to Spotware.
But now that it has discovered what a huge error that was, thankfully Digitex is not going back to square one trying to develop an exchange from scratch. It has a well-built, fully documented codebase and will very soon have a full development team once again working on bringing that to market as fast as possible.
Adam is now building a new development team in Serbia to restart work on that original application and expects to have a robust and launchable exchange in several months from now.
He says, “We’re not going back to a blank page, we have that code base that we built in Dublin. We were not happy with the time frame, which is why we went with Spotware, but we are now going to use the original code base and build up a team around that.”
Building a New Development Team
The Digitex CEO has already secured premises in Serbia. Apart from the lead developer there in Belgrade, he is bringing back the lead developer and front-end expert from the Dublin operation.
Adam is now relentlessly looking to build up a team of a further seven or eight developers who he says will be “working around the clock” under his strict and “unreasonable” supervision and demands. It will be a high-pressure environment in which Adam will be present seven days a week.
He reassures token holders, “We will get over this disaster, we are going back to a solid code base and building a team around it.” Adam knows that the token price will suffer and the fall-out may be harsh. But he would rather take the knocks that come his way now than launch a broken, commission-fee charging subpar product to his loyal community.
For questions, the Digitex Telegram team is manned 24/7. You can also contact [email protected] for press inquiries and Adam Todd will be available for interviews as well as hosting a live AMA on Tuesday 30th April.