Exchange Review – How Does Digitex Futures Compare to OKEx?

As the launch of the Beta version approaches, how do we compare against existing exchanges out there? This article takes a look at Digitex vs OKEx to see how we shape up. Check it out!

One thing that Digitex has clear is that we’re not launching our exchange in a vacuum. There are plenty of other cryptocurrency exchanges out there and some of them, like OKEx, offer futures trading as well as spot. But if you’re going to enter a competitive market, you need to be doing something different or better than the rest.

With zero commission fees on trades and 600k+ signed up to our Early Access Waitlist, we’re confident in the demand for our product. No other futures exchange offers commission-free trading–and that alone makes us an industry first!

Add to that the transparency of operations that we will bring to the market with the decentralized account balances of a non-custodial exchange, and we’re pretty sure we’ve got a winning product on our hands.

But let’s take a look at some of the features, characteristics, products, and reputation that another exchange in the space has to offer. Here we compare Digitex to OKEx by analyzing a few key factors.

1. Fees

OKEx like Binance offers among the lowest fees in the industry at 0.1 percent maker and taker fees for all token-to-token trades on spot trading. Futures trading fees, however, depend on the token being traded.

For example, trading BTC involves a maker, taker, and settlement fee of 0.015 percent. But LTC futures trades are a little more complex with varying fees–a 0.025 percent maker fee, 0.075 percent taker fee, and a 0.05 percent settlement fee.

ETC, ETH, and BCH have different fee structures as well.

OKEx fees

OKEx Trading Fees

There are discounts available for traders who trade frequently and manage higher trading volumes.

The native coin of OKEx is OKB and is meant to encourage traders to pay for transaction fees in it to obtain a discount and receive benefits for referrals, rather like the BNB Binance coin. Traders are also encouraged to hold OKB to move up the tier level to receive additional trading privileges.

However, unlike BNB, or DGTX, OKB is not listed on CoinMarketCap and appears to have no other use outside of the exchange.

While OKEx fees are certainly low compared to traditional futures trading, the complex structure can be a little offputting. Moreover, when you compare any kind of fee to zero, like Digitex, it already sounds too much.

2. Volume and Liquidity

OKEx is a top exchange by trading volume, currently the largest exchange in terms of trading volume, sitting right above Binance, according to latest CoinMarketCap data.

top exchanges

These two formerly China-based exchanges are constantly battling it out for the top slot with Binance being OKEx’s main competitor in the spot market.

OKEx reports a current trading volume of almost $400 million over the last 24 hours and more than $2.7 billion weekly, with $20 billion+ monthly. Even in a bear market, these are some pretty impressive numbers.

OKEx is a major exchange to contend with and one of the very few to offer futures and spot trading.

While OKEx only came about in 2017, its roots go back further to OKCoin that was established in 2014. When OKCoin was banned from trading in China last year, OKEx was created and relocated to Hong Kong, before upping sticks and moving once more to Malta earlier this year.

Digitex can currently only speculate on trading volume, however, 600k+ signed up traders waiting to get started is already a great indicator of potential volume.

What’s more, we’ve taken the importance of liquidity to a whole new level. Not only will zero commission fees create a high demand but we have held back a huge supply of DGTX for automated market makers.

In fact, we allocated a massive 200 million DGTX (20 percent) of our initial supply to automated market makers, which are bots designed to create thick order books with tight bid-ask spreads whilst breaking even and creating a liquid and fair market.

Market makers at other exchanges are often rewarded with tangible advantages like faster access to information or priority trades or even the ability to back out of trades a split second after they have been executed. Our automated market makers receive no special treatment, which means that all traders benefit from liquidity and no one trades on a preferential scale.

3. User Interface

When it comes to UI, Digitex has the upper hand. The one-click ladder trading interface will greatly simplify trades and is designed with simplicity in mind. Traders no longer have to enter their positions manually and this greatly speeds up the trading process in one-click rather than several bulky steps.

Trading couldn’t be simpler, faster or easier, and the trader never has to take his or her eyes from the price action or use the keyboard or move the mouse more than a couple of centimeters at any time!

OKEx UI for futures trading is fairly clean and simple, although the process is manual and not built for speed.

OKEx futures trading interface+

OKEx has also recently launched its “perpetual swap” product which is a futures contract with no expiry date and 100x leverage. This is designed for traders who have a deep understanding of risk and like to take a riskier big long or short position.

This type of development shows that OKEx as an exchange is continually improving its suite of products. And this is something that Digitex will also be looking at later on after we launch the exchange.

Currently, our focus is more on short-term aggressive trading where time is of the essence and one-click trading is a game-changer. And while futures trading certainly involves a learning curve, Digitex is making it as simple as possible for even novice traders to get involved.

Unlike OKEx, we don’t expect you to know it all before you get started. As soon as the platform launches, we will provide demos, explainer videos, show you a professional trader at work–and that it is possible to make consistent, small profits that add up over the trading session and don’t get eaten up by commissions.

4. Security

OKEx is a custodial exchange and as such, storing your funds here presents a significant risk. Like other good centralized exchanges, OKEx encourages traders to enable two-factor identification and, unlike other major exchanges like Coinrail or Bithumb, OKEx has yet to suffer any major hacking attacks.

However, in October 2017, hackers did manage to access several OKEx accounts. The exchange chalked this up to users falling for phishing schemes rather than a failure by the exchange itself.

OKEx explained that the causes of the security breaches were basically the low-hanging fruit, such as incorrectly kept passwords, PCs affected by malware, and users logging in by public computers. Luckily the breach was contained, however, it still highlights the risks associated with a centralized exchange.

Traders on the Digitex exchange won’t have to worry about hackers getting hands on their funds as all account balances will be decentralized from mid-2019, held in an independent smart contract on the Ethereum blockchain. Unlike OKEx, Digitex will combine the best features of a centralized server such as speed, reliability, and scalability, with the trustless security features of decentralized account balances.

When Digitex goes non-custodial next year the exchange will never have possession of any private keys that hackers can steal and traders will never have to trust the exchange with the custody of their trading funds.

Digitex is at the forefront of blockchain technology, developing a system with members of the core Plasma development team that will allow trades to be recorded on-chain in real-time as they happen.

Being able to record trades on-chain in real time enables the non-custodial aspect of the exchange because trades can then be executed without Digitex needing to have physical possession of the traders’ funds. Instead, the exchange can communicate with the independent smart contract that holds each trader’s funds and ask it how much credit the trader is good for as each trade is submitted.

The trader’s losses can be deducted from this independent smart contract in real time and his profits can also be added instantly, meaning the exchange doesn’t have to hold your money at any time.

OKEx works rather differently. Just last month, amid the uncertainty caused by the Bitcoin Cash fork that caused crypto markets to head into a tailspin, they decided to force early settlement of its Bitcoin Cash futures contracts.

They claimed to do this for fears of heightened volatility and the hash war that ensued between the two blockchains fueling fears over Bitcoin Cash’s uncertain future. However, plenty of traders were forced to close at a price that was detrimental to them and many spoke out about OKEx losing credibility, even accusing them of market manipulation.

Early settlement wasn’t illegal but it was unusual and OKEx was the only exchange to take it upon itself to this–just days after announcing that it would list Bitcoin ABC after the fork.

5. Available Products

OKEx as one of the biggest exchanges offers a suite of products to its users including fiat to token trading, token to token, and futures trading. Focusing on its futures offering, the exchange currently supports eight coins – BTC, ETH, LTC, ETC, BCH, XRP, BTG, and EOS.

Contracts are settled weekly, bi-weekly, and quarterly, and each contract represents $100 of BTC and $10 of other digital assets. The leverage available for this type of contract is 10x and 20x.

OKEx offers 100x leverage on its perpetual swap product, which it introduced recently to compete with Bitmex’s popular perpetual swap futures contract. Digitex is also considering introducing a perpetual swap product when more futures markets are added in 2019.

Keeping in mind that Digitex is the new kid on the block and already innovating with zero trading fees, OKEx has the home advantage. But as 2019 unfolds, we move into the spot market and our futures markets expand, we’ll be able to compete on a much more level playing field.

Another noteworthy point is that both OKEx and Digitex are not able to work with US citizens.

5. Reputation

OKEx claims to be the most trusted digital asset exchange. But that’s a statement that not everyone agrees with. The Asian now Malta-based exchange has had its fair share of controversy. Beyond the most recent forced early settlement of BCH futures contracts, OKEx initiated a “Clawback” after a futures contract amounted to a whopping $420 million worth of BTC.

According to the company’s policy, this enormous long position was forcibly liquidated. However, it was not a loss that the exchange could cover with its insurance fund alone. When this happens, a full account clawback occurs.

This meant that users with a net profit across three contracts for that week were subject to the clawback. OKEx then took a portion of the profit. While the clawback is in line with the company’s “social loss” policy, it left traders fuming with some forced to relinquish as much as 50% of their profits.

As if that wasn’t enough, OKEx has also been accused of reporting fake trading volumes, with as much as 93% of its numbers fabricated. According to trader and investor Sylvain Ribes in a Medium article:

“A bit of wash trading and artificial volume inflation is to be expected in a thoroughly unregulated market. What I did not expect was the magnitude of the fraud.”

slippage chart

The chart represents slippage and volume over a range of cryptocurrencies that have a daily volume of more than $100k on four key exchanges over 24 hours: Kraken, Bitfinex, OKex, and GDAX.

You can see that a GDAX pair, for example, reports $200m, with a slippage of less than 0.1%. Other exchanges act similarly, while OKEx has a massive slippage compared to volume, which seems to point to fabricated numbers.

Digitex like all crypto companies has had its fair share of mudslinging during development. Rightly so, many people in this space are guarded after seeing so many scams, one after another. However, we’ve been consistent with our goals so far and transparent about operations.

We have one of the top ten busiest, most engaged groups on Telegram and our Community Managers are on hand 24/7 to answer any questions.

Wrapping it Up

A few bumps in the road notwithstanding, OKEx continues to thrive, particularly with its Asian clients. Part of the exchange’s plan when relocating to Malta, however, is to go after the European and latterly the US market.

OKEx is currently one of the top exchanges by volume, although certainly not as well known as popular spot trading exchanges such as Coinbase or Kraken in the US or even Europe.

It will be interesting to see how much of the European market the exchange manages to gain in the year ahead. OKEx is not our main competitor and their futures market is geared to a different kind of trader. However, once Digitex gets up and running, we’ll go from a blip on the OKEx radar to major contender to be reckoned with.