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The futures market is an interesting market that I only just discovered and to help a beginner like me understand the full significance of the project to be discussed in this publication, I'd give a basic but intuitive explanation of what it is.
Futures are agreements or contracts between two parties to buy or sell a commodity at a predetermined price in a future time. For instance, a farmer agrees to sell some quantities of his products to the product processing factory at, say, $2000, at the time of product harvest (a future time, hence the name of the contract - Futures). These kind of contracts originated from farmers who aimed at hedging out the risks associated with fluctuations of the payment currencies and market values of their products in advance for future transactions, hence they were called hedgers.
The buyers often had interest in the tangible products then, but now, with the maturity of market and its birthing different kinds of futures including currency futures, stock market index futures, interest rate futures etcetera, buyers are rarely interested in the tangible commodities anymore but the market movements of the contracts or agreements. Speculators, as they are now called, yield profits by buying/selling this contracts which have no inherent value on its own but tracks the value of the underlying asset or commodity, tangible or intangible.
... Even at maturity, the market still had its flaws which deterred hedgers and speculators from it's incredible margin benefits.
Futures' Market Problems.
Although the problems of the Futures market are quite numerous, most of them emanate from the Future exchanges. Futures exchanges serve as a marketplace for buyers to meet sellers to create this future contract and also for the various kinds of contract traders to lay hands on them for prospective profits. In other words, these exchanges are "middlemen" and of course, they would require commissions for every completed transaction to keep their business running as they are not charity organizations. These commission-fees are a great turnoff for traders as they either reduce their profits or entirely result to losses in their marginally profitable trading strategies.
The futures exchanges held and controlled user funds hitherto, and most of them either mismanaged it or entirely made away with it. Of course, the media does not fail to spread news like this, painting to the public, a risky market more than it actually is, hence forcing old and prospective participants away from the futures exchange. As you may have thought, this also attracted fierce regulators to the exchanges and brought it under their whims and caprices.
Altogether, these two major problems through deterring new entry into the market and pushing old participants out, reduces the ease with which these contracts can be sold for local currencies - the futures liquidity.
An innovative Futures exchange is set to launch soon which has successfully meandered across the aforementioned problems to improve trading experience and birth the future of future exchanges; I give to you Digitex, a commission-free trustless futures exchange for trading digital cryptocurrencies.
The Digitex Futures Exchange
This is a marketplace for buying and selling digital currency futures with zero transaction fees attached and complete control of funds provided via decentralized accounts. Although it seems somewhat temporal or some form of airdrop or marketing ploy to kickoff the platform, It's both surprising and impressing to find out that it's not, as the founder, Adam Todd, in collaboration with the team has conjured an indefinite sustainable revenue model to handle the exchanges operational costs. Futures experts, wannabes, traders and investors confirms the impressiveness of this project as rushed to purchase the exchange's tokens - DGTX - during its ICO, making the ICO one of the fastest to sell out in the history of ICOs, raising $5.4million in just 17minutes!
As if the ICO rush was not enough to prove the Impressiveness of this project which has led to a high demand of it's utility tokens, as at the third week of August, despite the "bearishness" of the cryptocurrency market lately, DGTX has ranked as the third top gainer in coinmarketcap, with a percentage gain of 272.63%! Ooolala!
With these stated facts about Digitex, clearly, there must be something about the protocols and models of Digitex that far outwits other digital currency exchanges which makes its exchange a cynosure to all futures stakeholders, old and new.
Pull up a cushion, sit back and relax as we discuss how the Digitex exchange preens itself to become the most attractive in the futures market.šš
Digitex Zero-Fee Trading
Instead of charging fees, Digitex creates new tokens per year to cover operational costs. Being the only native currency of the exchange on which all the activities including profits, losses, margin requirements and account balances are denominated, the demand for the tokens is sure to cancel out the small inflation cost that arise from minting new tokens per year.
However, no new tokens is minted for revenue generation initially. For two years after the ICO, the revenue raised from the DGTX ICO will be used to fund the operational cost.
... Thank God! the ICO sold out, else it wouldn't have survived the 2yearsš
It is speculated that there will be an overall sharp rice in price as there will be only limited tokens - 90% of the total 1billion DGTX supply - to meet the increase in demand. Around the start of 2021, which is approximately two years after the ICO, new tokens will be minted from a fully audited token creation smart contract based on the votes of the traders of DGTX holders of the futures exchange; 1vote = 1DGTX.
The inflation cost this first token creation causes melts down the built up demand in the previous two years of no token creation, balancing any unsustainable ridiculous price rise that may have happened hence preventing high volatility of the tokens price value.
Funding operational costs with just $5.2million for over two years, shows the managing prowess of the Digitex futures exchange management and their commitment to make this project another success story. This No-fee trading will allow traders focus on creating and improving strategies rather than jumping from exchange to exchange, trying to avoid commissions, as it leans their gains.
Digitex Trustless Trading
Prior to Digitex, futures exchanges either limited traders asses to their funds or took complete control of it via a centralized funds account or being in control of their private keys to the wallets of the underlying futures digital currencies. Digitex breaks out of this traders deterring norm by decentralizing traders' account balance and giving them sole ownership of the accounts by having no knowledge of their private keys. These decentralized account balances are smart contracts on Ethereum blockchain, independent of the exchange. As such, transactions on the exchange will not only be trustless, the exchange will also unlikely be on the influence of regulators or aimed at by hackers.
Digitex however is NOT purely decentralized. Considering the obvious pitfalls of some other decentralized exchanges such as the absence of real-time trading, lack of privacy, lack of reliability and scalability etcetera, the Digitex team has built her futures exchange with a hybrid mechnanism combining the speed and reliability of centralized servers with the trustless security of decentralized smart contracts. In other words, Digitex handles funds with secured and decentralized smart contracts and manage transactions order matching with a centralized engine. This strategic combo yields hybrid benefits of both centralization and decentralization, some of the benefits include;
ā¢ Matching engines on dedicated central servers are blazing fast, allowing for real time trading and more sophisticated trading tools and strategies.
ā¢ Central servers have complete privacy, preventing frontrunning of large orders
ā¢ Transactions on a proprietary central server are off-chain and effectively free.
ā¢ Central servers are very fast, extremely reliable and scale well.
ā¢ Margin trading on a centralized server is possible and allows traders to maximize their trading account balance using leverage.
Truly, Digitex has no physical possession of your funds held in the Ethereum smart contracts but its centralized engine interacts with and continually calculates traders' profit and loss each time a withdrawal is requested from the smart contracts to militate against hackers. Also as a means of security to this hybrid modeled exchange, it requires that users have a metamask chrome browser plugin for secure and anonymous access to the exchange.
Digitex Decentralized Governance
As earlier mentioned, Digitex mints new tokens to cover operational costs instead of charging fees for transactions. The creation of these tokens is totally governed by the DGTX token owners who acts in a collective self interest, to vote to implementation a smart contract proposal which would contain the amount of tokens to be created for operational costs. Hence in a sense, the token holders are responsible for the exchange.
Care must be taken by the token holders though, to balance the inflation cost and the demand at the moment to ensure that the market value of the DGTX tokens remain on a steady rise. And so, token owners need to be fully informed about the exchange and its needs to be able to make right decisions or delegate their voting power (which they're capable of) to active trusted persons to help make these right decisions. The exchange does not fail to incentivize the active voters.
Digitex offers 3 futures markets with large tick sizes namely; BTC/USD, ETH/USD, LTC/USD. Coupled with above listed features which solves the earlier mentioned problems, Digitex attracts several traders to its futures exchange which proportionally increases the liquidity of the futures contracts on a sustainable level on the exchange. With all the multitude of traders attracted towards its futures exchange, Digitex understands that it needs to be scalable, and so it is positioned to handle this by being the first blockchain application to launch with the Plasma Technology which promises to scaled Ethereum limitlessly. Also, to further increase the liquidity, Digitex builds in an additional mouthwatering feature to keep traders salivating - Automated Market Makers.
Automated Market Makers.
Digitex addition of the this special feature is based on the statement, Liquidity begets liquidity, which I totally agree with. The substance of this statement becomes conspicuous when we consider relatively new exchanges with a loose spread, where orders of both buyers and sellers are not quickly matched. Problems like these also rear their ugly heads in established exchanges when circulation of a particular asset is limited or hampered by a hoarding speculator.
Innovatively, Digitex solves this unfriendly problem by built-in friendly automated trading bots. I say friendly bots because their algorithms do not permit them to hoard currencies or take profits. Their break-even algorithms only permit them to actively trade, keeping the DGTX tokens in circulation. They are seriously funded, specifically with 20% of the initial total supply i.e 200M DGTX Tokens earmarked as the bots trading capital. This allows the Digitex exchange to be very liquid from day one and also to reduce the amount of funds held down by dormant accounts.
Future Contracts Specification
Digitex has 3 future contracts of digital currencies all paired with US dollars. They are; BTC/USD, ETH/USD, LTC/USD. These pairs of contracts all have similar specifications with very slight differences. See table below;
| Futures Contract | BTC/USD | ETH/USD | LTC/USD |
|---|---|---|---|
| Ticker size | $5 USD | $2 USD | $0.25 USD |
| Tick Value | 1DGTX | 1DGTX | 1DGTX |
| Maker/Taker Fee | 0% | 0% | 0% |
| Finding Costs | 0% | 0% | 0% |
| Initial Margin | 20DGTX | 20DGTX | 20DGTX |
| Maintenance Margin | 10DGTX | 10DGTX | 10DGTX |
| Contract Type | Contract For Difference (CFD) | CFD | CFD |
| Contract Duration | 24hrs | 24hrs | 24hrs |
| Settlement Date | 00:00GMT (Daily) | 00:00GMT (Daily) | 00:00GMT (Daily) |
The ticker size here still remains as mentioned before, the minimum price increments. The settlement prices for all future contracts is determined from BitcoinAverage.com spot price as at 00:00 GMT, rounded up or down to the their individual ticker size (i.e $5, $2, $0.25, for BTC, ETH, LTC pairs respectively). All cash are settled in DGTX tokens at settlement price and all open positions are rolled over to new contracts.
Benefits of The Digitex Futures Exchange
ā¢ Digitex eliminates trading-fees which grossly reduces profits or entirely cancel out profits for losses in successful trades which would have yielded much more profits without the fees. In other words, it dents marginally profitable trading strategies.
ā¢ Digitex futures exchange are completely private. This is because they do not collect or even store any of their users details and they are not bound by any KYC/AML to do so, the reason being that, they do not hold traders' funds.
ā¢ Digitex futures exchange will crush the scams in this industry, by providing a trustless platform, Traders do not have to go through the emotional trauma of trusting the exchange with their funds. Hence, Digitex will heal the industry of its stigma and heighten its reputation.
ā¢ Digitex offers a leverage (think of leverage as some form of bank overdraft) of up to a 100Ć, to allow traders make huge gains from just few ticks, there's also the risk of high losses. In addition to this, Digitex also promises not to cancel out high leverage winnings or profits to save itself from losses.
ā¢ About ticks, Digitex offers large sizes of it. For example, the tick size on the BTC/USD futures contract is $5. The reason for this is not solely for large profits or losses in one step, but to mask noise and volatility of future contracts and allow full display of price movement on its scalper-friendly one click ladder trading interface.
ā¢ By eliminating the "middleman", Digitex not only lowers the possibilities of a fraud, it also creates a direct contact between the buyer and seller, allowing for better communication and understanding of terms of the created futures contract.
ā¢ Digitex uses its smartcontracts to guarantee that counterparties meet their ends of agreement regardless of the unprecedented conditions, therefore eliminating unfair management. Digitex also harnesses other applications of the blockchain technology aside smart contracts like its autonomous governing for new tokens issuance and its trustless security for handling funds.
ā¢ Digitex is capable of matching orders in fractions of milliseconds, hence it provides real time updates of prices and prevents latency. It might interest you to know that it's earlier mentioned centralized engine was built with same programming language used for WhatsApp - Erlang/OTP stack, hence it's WhatsApp-like update speeds.
Digitex Tokenomics.
You probably figured by now that the ticker symbol for the Digitex exchange tokens is DGTX. It indeed is. DGTX is the native currency of the Digitex futures exchange, and all account activities, profits and loses, marginal requirements are denominated in these tokens. This automatically make it a token with a strong utility and hence high demand. There is a total of 1billion DGTX in supply, of which 65% has been sold out in its ICO/Tokensale. The automated market makers are capitalized with 20% of the total supply. 10% of the total DGTX tokens go to the team, which is vested for 3years after ICO i.e 1year after the first creation of new tokens and the remaining 5% goes to referrals.
Speaking of referrals, there's an early access DGTX airdrop of 600,000 tokens to the 5000 highest referees. Join here!
DGTX is an ERC223 compatible token which can be freely traded for any cyptocurrency ranging from Bitcoin, Ethereum to the other numerous altcoins via the exchanges it has been listed on such as Mercatox or on the Digitex Platform through the integrations the platform has established with trustless decentralized token trading protocols such as bancor.com, swaptech.com and 0xproject.com. DGTX tokens also posses a pegging system that helps traders eliminate price risks from their trades. See Whitepaper, Page 6.
Digitex Use-Case & Trade Example
Billy is an unsatisfied digital futures trader. He's had almost all challenges every futures trader could think of. If it wasn't Low leverage, it would be auto deleveraging or high commission fees. There was a time he made some good profits GDAX.com but after commissions were subtracted, he was almost at a loss, barely above break even.
Being also a fan of the blockchain technology, he decided to do some research about how this tech can possibly affect his futures trading and then he met with this publication. He couldn't believe his eyes and eyes, that a solution like this already existed, even with his name used in the use-case.š
Since then, he's been making some nice profits off his trading, even with the marginal trading strategy he once wrote-off as useless. Below is an example of one of his day trade;
Billy conceiving a strong speculation that the price of BTC would go bullish soon he jumps on to Digitex and with few clicks he bought 600 BTC/USD contracts at $12,000. Indeed there was a sharp rise! Towards the end of the day, the price hit a strong resistance and was about falling down and so in few clicks again, he created a sale order at $12,300, which is matched in blazing fast speed, preventing further profit reduction. This is a profit of 60ticks per contract (300/$5 per tick - on BTC futures contract) on a contract, which will total to 36,000tick profits. Since 1tick is equivalent to 1DGTX, this means Billy made a gain of 36000DGTX. Say, current value of DGTX was $0.10 per DGTX at the time of trade completion, Billy's profit would be $3,600. Mind you, Billy had to have a minimum of 12000DGTX(600Ć20 DGTX) ~ $1,200 in his account balance held by the independent smartcontracts, for marginal requirements purposes. Billy's profit remains $3,600 as there are no commissions deductions.
Digitex Team
Digitex Advisors
Digitex 2018 Timeline
Implications of Digitex / Summary
Hinted in the words of the founder, Adam Todd, "The futures traders' utopian dream of a commission-free exchange is now a reality", it would not be "too imaginative" to picture in our minds an overall increase in market capitalisation of the Cryptospace. As traders who never even did currency, old and new, will flood into the cryptosphere to leverage this opportunity that Digitex creates. In addition to this market cap increase, Digitex may just also be the solution to the time old problem of cryptocurrency volatility.
Harnessing the power of the blockchain technology, Digitex brings alive with its new and unique token issuance model what use to be a mere wish - a Commission-free trustless digital currency exchange - to allow Futures traders get the best out of their marginally profitable trading strategies in a user-friendly, carefully thought of, one-click away trading platform.
More Information & Resources
See introductory video below, for more clarity;
See Digitex Futures Exchange in Action;
Information Channels
ā¢ Digitex Website
ā¢ Digitex Whitepaper
ā¢ Digitex Blog
ā¢ Digitex Telegram
ā¢ Digitex Reddit
ā¢ Digitex Facebook
ā¢ https://twitter.com/digitexfutures
ā¢ Digitex Youtube
ā¢ Digitex Originalworks
Thanks for reading lovelies;
CED.
ALL "unsourced" Images used in this publication are Credited to Digitex
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