Introduction
There is no one-size fits all approach to adopt to guarantee that a trader or investor break even when trading cryptocurrencies. But no matter which approach or strategy a trader adopts, he is sure to go through an exchange to easily trade his fiat currencies to digital currency or vice-versa as the case maybe.
There is no denying the fact that there are a lot of good exchanges out there where traders can easily exchange one asset for another but it seems that traders have to pay the price of high transaction fees before they can get to enjoy the benefits of using this good exchanges; which in reality apart from high volatility contributes to the reason why trader's find themselves in one of these three cycles
- Difficult point of entry for new traders
- Inability to engage in real-time trading due to unclear transaction fees which reduces a trader efficiency.
- No or Low return on investment rendering traders strategy unproductive.
Therefore, these three stages captures the position of many trader's and potential traders who will love to get on a good exchange with sufficient liquidity to drive their asset.
The Inherent problem with Centralised (CEX) and Decentralized (DEX) Exchange Options: The Talking Points
Ordinarily, Centralised exchanges represents a deviation from why cryptocurrency and the blockchain was instituted in the first place. On the surface is a huge security gap which leaves room for hacker's to exploit and steal investor's funds. But if we look beyond this veil, we can find that there are some good reasons why Centralised exchanges such as Bitmex are more desirable to use for trading cryptocurrencies over decentralised options such as Ethfinex.
One of such qualities is the Ease of use if centralised exchange backed by a faster speed of matching orders due to provision of a dedicated server making real-time margin trading possible. Thus, allowing traders to balance their account via leverage.
However, on the contrary, security and transaction still takes the top spots on the list of a trader's conundrum when it comes to trading cryptocurrencies on this exchanges.
While security is less of a concern when using decentralised exchanges (DEX), other problems such as high latency of on-chain orders, lack of privacy, expensive transaction cost amidst reliability and scability issues makes it not so ideal for real-time trading.
These means that traders are constantly torned between the hard choice of trade-offs: security for speed, low transaction fees for high liquidity. None of this scenarios are sufficient to independently address the problem of cryptocurrency traders. What is needed is a system that subtly combines all the good benefits of each exchange options for trade benefits.
This leads us to a first-of-it-kind solution for real-time traders on the blockchain, Digitex
What Is Digitex
Digitex is the first, commission free exchange based on the ethereum blockchain.
Digitex is driven by the DGTX token economy which serves as the native currency of the Digitex futures exchange
All profits, losses, margin requirements and account balances are denominated in DGTX tokens, meaning that traders must own DGTX tokens to participate in the commission-free, trustless markets on Digitex. This creates demand for DGTX tokens from traders Source : Whitepaper
This approach will thus enables the exchange to replace transaction fees with revenue generation from minting and selling new DGTX token each year to cover the cost of running a commission-free exchange.
This commission-free economy and high liquid market,
will create a market demand that is greater than the inflationary cost,
that may accrue for minting and selling new tokens to fund the exchange
Although new tokens will be minted only after two years of launching the platform
Digitex Solutions To the Numerous Trading Problems
Commission-Free Futures Trading
The Futures exchange is what gives the DGTX token its utility as a vehicle for trading highly liquid futures markets without any transaction fees.
And the only way for traders to participate in this market is to buy DGTX tokens to cover their margin requirements to open trades. Source : Whitepaper
This drives a high-liquidity exchange platform for all traders within the Digitex platform
Security
Fast Transaction and highly-Scalable Exchange Option
Centralised options are able to achieve high transaction speed and solve scalability issues by providing a dedicated server for matching transaction orders in real-time to the chagrin of short term traders.
Full Benefits and Features of Digitex
* Automated Market Makers
Digitex market makers are automated trading bots with algorithms that are programmed to break even.
This approach is to help create liquidity with tight bids and offer spreads even in a volatile market conditions. This will give traders the confidence to enter and exit positions to further enhance liquidity.
Low liquidity is one of the features of DEX exchange which Digitex have solved through this approach. A large trading bank of 200M DGTX tokens will help curtail low liquidity issue
* One Click Ladder Trading Interface
This helps to stimulate good user experience for traders using the Digitex platform and make it easy for traders to submit buy and sell orders with one click.
Traders can use the feature to view the price movement of a commodity around a central price ladder which are enabled with indicators to monitor trade positions. A large tick sizes also helps traders to have a wider view on price assets for long term projection.
* Sub-Millisecond Order Matching
Buiding the Digitex platform on the same programming language as WhatsApp offers some clear advantages: the Erlang/OTP stack, enables the exchange to handle real-time update capabilities and seamlessly handle spikes in activity with extreme low latency. Other benefits of using this model are
- Trading interface updates prices in real time
- Trading interface is completely web browser based
- Trading orders are matched typically in less than one milliseconds
- Ensure the platform is highly scalable for wide adoption
* Off-Chain Price Discovery, On-Chain Settlement
Typically combining the best of two worlds to make an hybrid exchange which means that Digitex offers user the speed of executing transactions and the safety of their deposits.
* Decentralized Governance by Blockchain
The Digitex platform adopts a democratically governed token issuance revenue model; which means that all Digitex token holders collectively decide on when, if and how many tokens are issued to cover the operational cost of the exchange.
Note : New Token issuance can only commence 2 years
after launching the Digitex exchange platform.
* Complete Privacy
Traders are exempted from completing any KYC/KYL requirement as an offshore exchange that accepts only DGTX token. Therefore traders are rest-assured that their tracks are well covered from hackers by using the Digitex platform.
Other Benefits of the Digitex platform
- No auto Deleveraging
- High Leverage
- Bitcoin, Ethereum & Litecoin futures
Use Cases
High Leverage Trading Platform
Mr Felicity is a cryptocurrency trader who uses numerous exchange to balance his account but the high volatility of this cryptocurrency makes him to come short once in a while but because using a good exchange with high liquidity attracts high transactional fees to him, he tries to leverage using multiple exchange platform just to be able to get some good return on his portfolio investments. To him this method seems crude while also taking a lot of useful time he should be investing into formular market strategies.
So luckily for him, on one of his usual scousing through the internet, he came accross a publication which talks about Zero transaction fees, which means that he can apply low profit and low risk strategies and still be profitable without the fees eating away at their profits!. He makes more research and soon enough he realises Digitex represents the best solution for him to leverage his futures asset in a fast, secure and inexpensive manner by ONLY acquiring the DGTX token when it was cheap!
Mr Felicity is happy to do what he loves to again on a platform like Digitex!
Other use cases of the DGTX token is summarised in this chart
Conclusion
Virtually all of the existing centralised exchanges (CEX) leaves room for its users to be exploited by charging high transactional fees on every single transaction while also exposing their funds to potential attack due to managing their funds while the Decentralised options (DEX) is not ideal for real-time trading due to low latency and liquidity.
Digitex creates a hybrid of this two existing solution by
- Eliminating transaction fees
- Storing account balances trustlessly in a decentralized smart contract
- Allowing its traders to determine rate of new token issuance
Digitex is the smart option for futures traders!
Digitex Futures Contract Specifications Details
| Futures Contract | BTC/USD | ETH/USD | LTC/USD |
|---|---|---|---|
| Ticker Size | $5 USD | $2 USD | $1 USD |
| Tick Value | 1 DGTX | 1 DGTX | 1 DGTX |
| Maker/Taker | 0% | 0% | 0% |
| Finding Cost | 0% | 0% | 0% |
| Maintenance Margin | 10 DGTX | 10 DGTX | 10 DGTX |
| Initial Margin | 20 DGTX | 20 DGTX | 20 DGTX |
| Contract Duration | 24hrs | 24hrs | 24hrs |
| Contract Type | Contract For Difference (CFD) | CFD | CFD |
| Settlements | 00:00 GMT Daily | 00:00 GMT Daily | 00:00 GMT Daily |
Digitex Vs Other Exchanges
Digitex Among Top Cryptocurrencies
Digitex Exchange Review
Roadmap
Meet the Team
For More Information
Check Digitex Whitepaper P19-20: for more details on Futures Contract Specifications for BTC/ETH & LTC
Check Digitex Whitepaper P21-25: for more details on trade comparism between digitex and other exchanges
This post is submitted for the Digitex writing contest organised by @originalworks. Feel Free to join this contest here Digitex2018 Link to twitter post