Commission-Free Trading for a New Generation of Traders

Author: Christina Comben Date: 17 Jul 2019

It’s finally here! For those of you who couldn’t make the Barcelona Trading Conference, you can catch Adam’s talk on commission-free trading for a new generation of traders. He goes over the explosive rate at which the world futures industry is growing, the all-time highs being hit in crypto futures--and how Digitex will shake up the market when it comes to launch. Check it out below:

You Can Also Catch the Highlights Here

If you haven’t got time to watch the whole workshop, you can catch the highlights here. Adam opens the talk by apologizing about his husky “second-day conference voice” from all the talking (and the afterparty) the day before. “If I sound like Barry White, I’m sorry,” he says. He then gets down to introducing himself and explaining who he is and what he’ll be covering.

The Global Futures Industry Is ‘On a Tear Right Now’

Adam tells the audience that the global futures industry is experiencing exponential growth beating records year on year. According to the latest results released by the Futures Industry Association (FIA) for 2018, a record number of contracts changed hands globally. Futures and options also climbed by 20.2% from the previous year to 30.28 billion contracts, an all-time record.

Cryptocurrency Futures Trading

Adam then narrows in on the crypto futures trading industry and highlights some key indicators that prove the industry is growing. BitMEX hit an all-time high on daily futures trading on June 26th at $16 billion. CME has had two record months in a row this year in May and June, and Binance will be throwing its mighty hat into the ring later this month as well.

Digitex Futures with 1.5 million on its waitlist is expecting to launch to at least 150-200k active traders and will be primed and ready to take a slice of this continuously growing pie.

The Digitex Futures Exchange

You’ll already know by now that there are plenty of things that set Digitex apart from its competitors. We’ll be the only commission-free futures exchange to exist and offer non-custodial accounts as well. 

Not only will we be launching with cryptocurrency futures, but we’ll be adding traditional markets as well. We also have a provably fair matching engine and a one-click trading ladder interface to give us yet another edge. 

How Do We Remove the Fees for Commission-Free Trading?

To achieve commission-free trading, we have transformed the revenue model of the exchange from a commission fee-charging model to a token issuance revenue model using our native DGTX token. This is the lifeblood of our exchange. 

All traders must buy DGTX in order to participate in any trades on the exchange and all account balances, profits and losses are denominated in DGTX.

This means that there is a natural demand for DGTX that rises as more and more traders are attracted to active commission-free markets. They can realize trading strategies such as short-term scalping that are impossible on other exchanges. 

To cover the costs of running our exchange, we have three phases of financing. Phase one was our ICO that sold out in 17 minutes raising $5.3 million. Phase two is our ongoing token sale from the Digitex Treasury in which traders can get a trustless instant transaction straight from us at a small market premium while funding our operations; and phase three is token minting, which will start in 2022.

Minting tokens has an inflationary effect on the token price, however, Adam reiterates that this is likely to be as small as half of one percentage point and will be put to a community vote. So the people who will absorb the inflationary cost are the ones who will vote on how many tokens to issue and when.

Non-Custodial Account Balances

Another pillar of our exchange is non-custodial account balances. In this era of cryptocurrency hacks ($1.2 billion was stolen in Q1 alone) and exchanges acting in unscrupulous ways to interfere with customers’ funds, our traders will never have to trust our exchange with their money. We combine the speed of a centralized order book with the security and integrity of a DEX.

Adam explains that the non-custodial side of things is still tricky and that our world-class Ethereum developers SmartDec are still working on the right solution for the exchange. Since we are at the cutting-edge of blockchain technology and scaling solutions for Ethereum, we will be making our research on Plasma zkSNARKS public and open source.

The Provably Fair Matching Engine

Adam explains that this is actually better than regulation. The provably fair matching engine ensures the integrity of our order book. We will use blockchain technology to prevent front-running, queue-jumping, last look, and censorship. He says:

“We can use blockchain technology to guarantee the integrity of our order book without needing regulators… It’s better than being regulated.”

Commission-Free Trading - Wrapping It Up

He then finishes the presentation by taking questions from the audience about which markets we will be introducing, how traders will be able to hedge DGTX on the exchange to remove volatility, and when moon? To which he laughs and replies… “moon very soon.”