Whoever said nothing in this world is free perhaps did not hear about the Digitex futures exchange?
Yes it is true that whenever someone provides a service awesome value they expect to be paid in return. This is how the world and the economy works.
Therefore there is a direct correlation between work/ service and getting Paid in return.
However the Digitex Futures Exchange turns this business model upside down.
Digitex is setting up the first, commission free Futures Exchange on the blockchain.
So anyone in in this futures exchange can transact without having to pay a fee.
When I heard this I got curious and started to investigate.
First hard to find what a futures exchange is all about. By definition a futures exchange is
Futures are a promise/contract to buy something at a specific date - a standardized asset or commodity (apples, oranges, etc), at a specific price.
Futures markets give traders the opportunity to trade prices without the high costs and risks of transferring, storing and paying in full for the actual underlying instrument on whose price they are trading.
Is trading in the futures a bad thing?
Well not quite future trading please are important role in stabilizing the volatility which exist naturally in commodity markets as price very due to seasonality supply demand or various other factors.
Investopedia Definition:
"A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange."
what could be the impact of Digitex Futures Exchange when it offers to trade without any fee.
Usually whenever a trader in the futures market anticipate price movement that would happen in the future he takes the position to make a profit. For every such trade there is fee that is paid to the exchange.
The cost of the fee adds to the cost of the transaction. Due to this only those transactions are viable for traders in which there is profitability after deduction off the fee.
Now what would happen if they were no transaction fee. Just like if there were to be the free lunch people would fill up the plates and eat more.
Similarly traders carry out more transactions to avail of the no fee situation.
As in this case even small price variations can lead to a profitable trade for the trader.
how does the free free of transaction fees business model augurs well for the
Digitex Futures Exchange?
A fee charged by an exchange is its bread and butter. Take over the fee and there is nothing left for the exchange. No money to cover the operating costs or to pay the salaries so how could the Digitex Futures Exchange? see this as a viable business model?
Commission-free Trading
Digitex would have its own currency called DGTX
To use the facility of a zero transaction fee model traders would have to transact using the DGTX tokens.
The free of transaction fees model who attract a lot many more people to come and transact at the exchange.
Everyone who wants to transact on the Digitex futures exchange would need to buy the DGTX tokens and use them for carrying out the order on the exchange.
This will increase the utility, value and usability of the DGTX tokens.
In order to cover the transaction cost new DGTX tokens would be minted.
One might argue that this act is causing devaluation of the token value.
This is quite rightly the case however on the other hand the No transaction fees is creating an enhanced demand to acquire and transact the tokens.
This increased demand would cause an increase in value or price appreciation of The tokens.
Decentralized Governance
The owners of the tokens would decide how much New tokens need to be created in order to cover the cost. As existing token holders it is in there interest to balance out the lowering of value due to the minting of tokens Vs the rise in demand and value of the DGTX tokens.
Decentralized Accounts ~Digitex never holds your funds
A user never has to deposit his funds with Digitex and lose the authority over the private keys. Instead a small contract holds the funds and releases them as per the terms of the smart contract depending upon the outcome of the order placed by the user.
A large pool of DGTX tokens would be maintained to create adequate liquidity in the system.
Other Exchanges and Digitex
Most exchanges are Comissision based so they charge a fee for the trades executed on them.
This means that some trades are viable when the profit margin is substantially large so that even after the deduction of the exchange fees there is something left for the trader.
With Digitex a lot many more trades can be executed and the opportunity to make a profit can be increased.
This is because there is no fee to be paid to the exchange.
Comparing an average trade on Digitex Vs other exchanges we find the following comaprison
Comparing the trade on Digitex with Bitmex.com one finds that the trade on Digitex can bring in much higher returns as compared to the same trade being carried out on Bitmex.com
The future growth of Digitex would take the following path
Summary
Digitex futures exchange offers the opportunity to trade in the futures market without having to take any fee this would attract a large number of people to this business model.
As the funds have more security in the Digitex business model so it would instill confidence in the minds of the traders.
Those who hold the DGTX tokens decide and participate in the token minting process this gives them a say in the governance of the system.
This model is bound to get very popular with the cryptocurrency supporters and traders alike as can be seen from the fact that the ICO got sold out in 17 minutes and was able to raise funds worth $5.2 million.
Once the exchange gets fully functional it is likely to get a lot more support.
Currently there is a great opportunity to join and get an early access to the exchange. This can be done by signing up here.
More Information & Resources:
- Digitex Website
- Digitex WhitePaper
- Digitex Blog
- Digitex Telegram
- Digitex Reddit
- Digitex Facebook
- Digitex Twitter
- Digitex YouTube
https://steemit.com/crypto/@originalworks/1250-steem-sponsored-writing-contest-digitex
Twitter Link : -
https://twitter.com/steemcasper/status/1042054524532387841
- steemcasper
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