Upcoin, Tokens.net, Dimensions Network, ... There are more than a few new exchanges that will come online in the coming months. I've put quite a bit of time into researching them, and in my opinion, CoinMetro is positioned as a winner.
I think there is a golden spot reserved for a fiat-crypto exchange that scales with demand, has customer support and doesn't have criminal fees. CoinMetro is the only one that ticks all those boxes in my opinion.
So basically, we're looking at four features:
1. Fiat exchange.
Binance and Kucoin already do crypto to crypto in a great way. What the market lacks is a great fiat to crypto exchange. Legacy exchanges lack altcoins, aren't able to handle the huge influx of customers, have horrendous support and charge criminal fees. Improve on those and you're golden.
Fiat requires regulation, and that shouldn't be an afterthought, it's as simple as that. Acquiring a licence when you've already accepted customers without KYC, or when you ran an ICO with price predictions, or have a token with profit sharing... That's going to be a near impossibility. That's what I like about CoinMetro, they've started this proces of acquiring licences months ago, and they're very careful about what they do and say to make sure they'll get these licences and future ones. An Estonian e-money licence is a bit easier to get than a USA licence for example.
2. Ability to scale.
I asked them quite a few questions on this subject, and they're confident that they'll be able to scale. Hindsight is 20/20, so they have designed their exchange to be modular and able to scale well. I'm quite confident they will be able to do so for the actual exchange and wallet in and out movement. However, I think the most difficult part to scale will be the support staff. We'll see in March if they're able to scale that as well.
3. Actual customer support.
Current customer support on exchanges is horrendous. Not without reason of course, with the huge influx in customers it's hard to find enough support staff. However, with the huge profits that legacy exchanges earn on their volume, they should have done better by now.
Story time: Stellar announced an airdrop of Lumens for Bitcoin holders this summer. Kraken was one of the supported exchanges and had credited a previous airdrop already, so I left my (partial) Bitcoin on Kraken. Half a year has passed, with barely any communication from Kraken on the subject. When I contact the support staff they "have no ETA as of yet", and "no information has been released to us on the subject". Well, go ask your boss then right?!
Good support should be the mentality, and CoinMetro has it. Check out their Telegram. You'll get fast answers to whatever question you have from the admins, and often from Kevin (CEO) himself. He's also on Reddit.
4. Low fees.
The basic default fee all aroud for just about everything will be 0.1%. While that seems low in the current environment, it is still too high for Kevin. Maker fees will be half of that and holding XCM, their token, will give you a fee reduction as well. Over time, they plan to reduce trading fees even more. Their business model, as I understand it, is as follows:
Combine low fees with scaleable KYC to get volume and customers quickly. Other exchanges will have to follow your pricing, they will lose revenue. You’ll price even lower until you don’t profit from it anymore, gaining even more customers while making money on value added services that the other exchanges don’t provide.
So now I talked myself into talking about their value added services.
Value Added Services
They aim to be a one-stop shop. They will offer crypto debit cards, margin lending, crypto ETF's and managed crypto funds. All in one place.
BONUS: They have experience.
Kevin is also the CEO of FXPig, a niche FX broker that focusses on transparency and customer support. So not only does he have experience in building matching engines, acquiring licences and banking (another big hurdle for exchanges), but you can also see that his mentality is to focus on customer support.
EXTRA BONUS: Token Economics
While I'm at it, I'll write a bit about why their token (XCM or COIN) will increase in value.
Basically, there are a few factors that will increase the demand for XCM, and increased demand increases the price.
You’ll get a fee reduction if you hold XCM, just like on Binance. So the first thing people will do on the exchange is buy some XCM to have cheaper fees. (Also, participating in the ICO will give you a lifetime fee discount.)
Every exchange fee on CoinMetro will be converted to XCM, so there is constant demand for XCM. A percentage of that will be burned, so over time there will be less and less XCM.
Both CoinMetro and FXPig will use 20% of their profits to buy back XCM.
Now, I've written quite a bit. If you want more information I would recommend reading their whitepaper and asking questions in their Telegram. Also, check out the
AMA Kevin did a few days ago. (I will post time-stamped questions in the comments so you directly go to the questions that interest you.)
This analysis is my work and opinion. I don't have a crystal ball to see the future, so please think about my arguments for yourself and do your own research.
If you end up participating in the ICO because of what I wrote, then let me know in the comments and I'll give you a referral link that will give you 2.5% extra XCM on your first purchase, and me 5% extra. Ok, that was a lot of writing, back to studying now :)
Kind regards.
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