Last week, we announced that Digitex Futures will launch our public testnet starting 30th November. So far, the announcement has been met with mixed reactions, but our CEO Adam Todd has never been one to shy away from our supporters. In this AMA, he candidly takes on all your questions about the launch and more.
AMA – The Digitex Public Testnet Launch
Adam opens the video by recapping last week’s launch announcement and openly expressing his surprise that the announcement wasn’t received more bullishly. He admits he misread the perception and hadn’t realized people think November is so far away. He highlights that since April, there has been a vast amount of development progress and November is closer than it may seem.
From this brief introduction, Adam goes straight into your questions. Let’s take a look at them one at a time.
Q: Does the BTCUSD perpetual contract market as an initial offering indicate a shift away from traditional futures to perpetual contracts?
Yes, it does. We’ve been looking into other exchanges like BitMEX, and have sought feedback from experts in the market. As a result, we believe that perpetual swaps are more appealing to retail traders. They’re simpler to understand, with no expiry date. With an eight hour funding period, the swap price doesn’t get that far out from the spot price.
With a futures contract that may not expire for another month, there’s a premium because the spot price is further away from the contract price. Also, at settlement, there’s a need to settle the old contract and then open a new contract. Perpetual swap futures are the way forward for attracting retail traders and therefore, ensuring volume.
Q: Will traditional futures with an expiry date be an option, or will Digitex focus mostly on perpetuals?
We plan to focus mostly on perpetuals. The more markets and products that we offer, the more we’ll end up breaking up liquidity between different offerings. We don’t want to be the Amazon of futures exchanges. So yes, we are going for fewer strong markets to consolidate liquidity rather than offer hundreds of different products.
Q: What are the specifications of the perpetual swap contracts?
It will be a dollar’s worth of DGTX tokens. The contract specifications will be the same as the other exchanges like BitMEX or Bybit. There’s a simple reason for this – we want traders from those exchanges to come over to Digitex and therefore, it has to be an easy switch.
Along with manual traders, we expect there will also be many bot traders. We don’t want bot traders to have to reprogram everything for a new set of contract specifications. Bot traders will be able to come over to our exchange easily, using their existing configuration. Having the same contract specifications as other exchanges will also encourage arbitrageurs between exchanges.
Q: Any further information on the peg system?
To explain, the Digitex peg system is just another futures market for the price of DGTX against ETH, BTC or USD. It offers a means of hedging the price of your DGTX while you’re holding it so you can trade on our futures exchange. It locks in the price of DGTX. As you’re holding DGTX, you could sell a futures contract for your holdings on the Digitex peg system so if the price goes down, you may lose money on your trades but you’ll gain money on the peg system futures short positions. The same applies vice versa.
It will be tailored to the perpetual swaps, so a dollar’s worth of DGTX. It will likely be a perpetual swap specification, but we still have to determine all the specs together with SmartDec. Watch this space.
Q: Will there be an API at full launch or even at the test stage?
This is really a development question so it depends on SmartDec. For the testnet, however, there won’t be an API.
Q: For the testnet launch, SmartDec’s announcement stated the platform will support 10,000 users. Does this mean only 10,000 users can use the platform?
Yes, for as long the testnet lasts, there will be a maximum of 10,000 users. We don’t yet know how long the testing will run. It depends on SmartDec as a development-led decision.
Q: Given that you plan to be non-custodial long-term, does this mean that BTC, EOS, TRON, etc won’t be listed on the spot markets?
Not necessarily, no. We won’t offer a spot market without Bitcoin, it doesn’t make any sense. This may mean we won’t offer BTC spot markets with non-custodial accounts. Maybe in the future it will be possible to offer non-custodial accounts with BTC based on a Bitcoin smart contract layer like RSK. However, this isn’t something we’re actively investigating right now.
As things stand, we want to offer BTC on spot markets, even if it’s on a custodial basis. But spot markets will only be part of our roadmap once we’ve launched. Once we do launch, we’ll work with SmartDec to determine how and when we can develop a spot market solution.
Q: Any new exchange listings coming up?
Yes, we have a new exchange listing announcement coming out at the end of this week. We can’t say too much, but it isn’t Binance! There will be an app for mobile trading of DGTX. It’s our plan to get listed on more exchanges.
Q: What about the DAO?
We’ve had a lot of questions about this, but it isn’t really a topic for this AMA, as we want to focus on the testnet announcement. We’ll be dedicating a further AMA to this later on. However, we can provide a brief update.
We were going to issue DigiDAO tokens in October, but we’ve made a conscious business decision to delay this for now.
The reason is that if we start issuing DigiDAO tokens now before the testnet has even launched, there’s a risk that people might start dumping them at any price. Even with the testnet announcement having come directly from SmartDec, there is still a lot of doubt and FUD going on right now which is reflected in the current price. While we understand this, it means that there’s currently too much risk to start issuing DigiDAO tokens.
To explain further, if we do start issuing tokens and people try to dump them, it creates a further set of problems. The DigiDAO has some characteristics of being a security as it represents equity ownership, so it won’t get listed on any of the big, liquid, centralized exchanges. If people do decide to dump the tokens, their only option will be to sell them on illiquid DEXs.
We need to make sure that the DAO tokens are tradeable and liquid if the DAO is to be a success. Once we launch our own spot market, we’ll be in a position to manage liquidity. Until then, we won’t be releasing the DAO tokens. It may be disappointing but from a business perspective, it’s the best and most sustainable way forward.
Q: If the Treasury doesn’t sell tokens for a while if the price is below $0.05c, will Digitex survive?
Of course, Digitex will survive! Adam and the team are committed to the future of the company no matter what happens. In every sense of the word, we’re better than we have ever been. The current price doesn’t reflect the current state of the company, and our cash flow situation is secure.
Q: When will we see a demo or screenshots?
As soon as we have screenshots or a demo from SmartDec, we will share them with you. SmartDec are conservative in their approach, to make sure they can deliver what they promise. So they won’t release anything too early, in order not to build excitement before they’ve ensured the reality matches up.
Q: Is there a chance that existing exchanges with their own coin will steal the Digitex idea?
If nobody wants to copy our idea, that’s not necessarily a good thing! Look at the markets – even Binance is entering the futures game, which is great and lends validity to what we’re doing.
However, remember that for the existing exchanges, their fee model is working for them as it is. There isn’t necessarily any reason for them to change it at this point. Digitex is different in many ways from these companies. We don’t exist to make our stakeholders profit. But if the competition is there, we’re happy to take it on.
Q: Have you considered offering trading competitions on testnet?
Yes, once the testnet is open then we’re happy to offer some user-generated content. Anything that can generate interest and engagement is a great idea. It’s not yet confirmed, but we like the idea.
Q: Is KYC needed for test net?
There isn’t any reason why we’d need to perform KYC on testnet because we’re not trading real money. There will be KYC on the live launch.
It’s possible we may keep the testnet open beyond the live launch date. It could be a great training ground for new traders. It’s just an idea at this point, but it’s possible.
Q: When will the promotion begin? Will you be opening up the waitlist competition again?
We have so many big plans! We can’t say too much at this point, but we have a viral marketing campaign in store, and starting soon.
Q: Will there be 100x leverage on testnet?
Yes, the testnet will have all the features of the mainnet contract, but without real money.
Q: Are SmartDec devs ever going to appear on videos? It would help morale.
We would love them to, but not everyone enjoys being on camera! Perhaps in the future we may feature some of the developers on our videos.
Q: Will the exchange be in multiple languages?
Yes, absolutely. We’ve translated our website into Chinese, Japanese, Korean and Russian. Our waitlist and affiliate program is also already translated. We’re looking at more languages, including Turkish, Vietnamese, and Brazilian Portuguese. Our marketing campaigns will also be in multiple languages.
Q: When will we see a roadmap with future events?
At the moment the roadmap is just to get us to the beta launch. After that, we’ll put a roadmap together, with timelines for further features, such as a mobile app.
Bear in mind that this is going to be a long development process. If we do all the things we want to do to make our exchange what we want it to be, we have to take it a step at a time.
Wrapping It Up
We hope we’ve been able to answer all your questions! Overall, everything at Digitex is going very well. We’re really happy with the development progress and our marketing plans. We will be doing another AMA at some point soon, with more updates on development progress. Thanks everyone for joining this session and if you have any questions, don’t forget to join in the conversation on Telegram.