Introduction
A recent survey that was focused on crypto traders was conducted, in a bid to understand the prevailing barriers most trader face when trading in the futures market. The survey involved 1108 participants, and the respondents were from a diverse group of people, in different regions of the world, which improve confidence that the results were an accurate representation of the crypto trading community. The result showed that the second biggest problems crypto traders face are High trading fees, which represents 37% of the total in relation to the other problems. Security was the biggest barrier representing 40% of the biggest problems faced by traders. Other challenges were lack of liquidity, inconvenient UI, customer support etc, you can find details of the survey here
Being a crypto trader myself, I have to agree with this survey, as it personally represents my biggest concern I have encountered during my time so far as a crypto trader. When transferring funds from my bitcoin wallet to my wallet on a given exchange, I have to factor in the cost of that transaction. Even while trading, purchasing a given asset attracts commission fees, and selling the asset also attracts a fee; not to mention the fee you will have to incur when withdrawing your funds from the exchange, which cost another sizeable amount.
If we were to go back in time when things were very much analogue, and traditional methods were firmly in place. Simple processes like sending letters, bank deals, bank transfers attracted huge brokerage fees to be paid. And that is because of the presence of several middlemen involved in the process of getting the buyer and selling to the table. And with the creation of the revolutionary virtual currency that was based on decentralized blockchain system, was meant to eliminate the relevance of middlemen and middlemen like services such as banks and other financial institutions.
One thing was promised, the transfer of financial assets was going to be easy and fast, but some fees still prevail, fees known as “network fees”. Regardless of the decentralized nature of the blockchain, it takes time and effort to perform transactions accurately and securely. Just as internet fees are paid to enable the sending of emails, network fees are paid to enable the transfer of cryptocurrencies.
Platforms that trade cryptocurrencies better known as ‘exchanges’ are hubs where high numbers of crypto transactions occur. And for providing a robust trade platform, in exchange for that, traders are charged a number of fees for trading on their platform, fees like withdrawal fees, trading fees, deposit fees etc. Hence, trading platforms are earning most of the money as traders are put under pressure of achieving their goals, amidst paying all these fees.
This is a real problem, one that Digitex is solving by creating a commission-free futures exchange trading platform.
Digitex Futures Exchange
Digitex is a commission-free futures exchange for trading digital currencies (cryptocurrency) on the blockchain. Digitex Futures Exchange doesn’t charge user on the platform transactions fee, making it the first exchange platform to do so. Futures markets present traders the privilege to trade prices without the risks of transferring and high cost, of storing and paying in full for the instrument on whose price is being traded. Regardless of the commodity being traded futures market are valuable financial tools that make price trading possible, by reducing costs and friction.
In as much as the costs are low, transactions fees are still notable, on high volume trades, as well as low-profit margin trading techniques. The Digitex Futures Exchange eliminates transaction fees by the creation of an Ethereum based tokens known as DGTX, which will serve as the native currency of the exchange platform. The token will power the Digitex Futures Exchange meaning, all profits, losses, account balances and other value related metric will be denominated in the DGTX tokens; and in order to take advantage of the commission-free platform of the Digitex Futures Exchange traders will be expected to own DGTX tokens. The models create a demand for the DGTX tokens as traders will want to take advantage of the platform, this way, the Digitex Futures Exchange will be able to generate revenue by creating and selling a certain amount of DGTX tokens each year, a model that will replace charging traders transaction fees. This model ensures DGTX remains well funded and operational.
Unlike other exchanges where traders are expected to entrust their money in designated in-house wallets, in order to facilitate trade. In a bid to encourage liquidity, the Digitex Futures Exchange comes with a trustless nature where unlike other exchanges, traders don’t need to keep their funds with the exchange. Account balance will be held in decentralized, stand-alone smart contracts on the Ethereum blockchain, and not by the given exchange. Digitex Futures Exchange won’t hold any user’s private key, hence it won't be in the possession of any funds that belong to the user. History is filled with records where users lose their funds that were stored in exchanges, this risk is completely mitigated with the use of the decentralized account balances.
The issuance of new tokens is decided democratically, DGTX token holders collectively decide on the number of tokens that will be issued, and the time when this tokens will be issued. This will be in order to cover for operational cost, as well as the cost of running the exchange. The maintenance of the Digitex Futures Exchange is in the best interest of DGTX holders, as the exchange creates demand for the token, it gives the token value and utility.
Understanding Futures Concept
Futures are contracts for assets bought at an agreed price but will be paid and delivered at a later time. Futures play an important role in the stability of naturally volatile markets like commodities (prices vary from season to season) and cryptocurrency (where prices could be impacted by rumours, market manipulations and regulations).
Futures are financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash - Investopedia
Digitex Commission-Free Futures Trading
Digitex Futures Exchange has distinguished itself by identifying with the pressure point of most crypto trader - incessant transaction fees they pay to conventional exchanges platform. And to buttress this challenge, Digitex Futures Exchange was created, where users and crypto traders can trade for free. This will be made possible by the creation of an ERC - 223 compatible protocol token, being built on the Ethereum blockchain, known as DGTX token. Free trades with zero transaction fees will attract more users to the platform, which will multiply DGTX liquidity as users purchase DGTX which will serve as the native currency with which losses, profits, account balances will be expressed.
The Digitex Futures Exchange will remove transaction fees on all trades, the cost of trading will be covered by the creation of new tokens instead of charging fees. There will be a little inflation cost when creating new tokens, which will be offset by the demand of the DGTX tokens, as traders on the Digitex Futures Exchange will need to purchase the DGTX tokens in order to trade on the exchange for free.
New tokens will not be issued for the purpose of generating revenue for an approximated 2 year period, after the launch of the Digitex Futures Exchange. This is because the cost of running the exchange will be covered by the proceeds of the DGTX ICO. During this 2 year period, trading volumes, and new user registration is forecasted to rise sharply, new traders will compete to buy the limited number of available DGTX tokens, making the token more valuable. The price increase of the DGTX token which is as a result of the swift increase in demand will reduce the inflationary impact for the first set of tokens to be created.
Some traders on the exchange may be concerned about inflation and may need to protect themselves from the probable vulnerability of the market regarding the price of DGTX. Digitex came up with an ingenious idea, which is offering a way traders can peg their DGTX tokens to the current price of Ethereum or Bitcoin and sell their tokens at a later date via smart contracts, this is the effective application of traditional futures principles in the cryptocurrencies market
At the start of 2021, the first set of DGTX tokens will be created by Digitex this will be in order to cover the cost of operations, such as servers, software development, staff, marketing and support, premise and all other costs. Based on projected cost, as well as the price of DGTX, traders will vote on the number of DGTX tokens to be created in order to cover the projected costs. Voting will be done via Decentralized Governance by Blockchain, where 1 DGTX = 1 vote.
DGTX - Digitex Protocol Token
At the core of the Digitex Futures Exchange is the DGTX token, as it is the very reason the exchange can offer free trading activities. All transactional activities such as profits, losses, account balances will be expressed in the DGTX terms, therefore, users of the exchange are mandated to own the DGTX tokens in order to trade on the commission-free exchange.
As activities increase on the exchange, there will be an increase in volumes and liquidity on the Digitex Futures Exchange, also, traders will demand more DGTX as they try to take advantage of the exchange's commission-less policy.
As mentioned earlier, the estimated cost of running the Digitex Futures Exchange will be forecasted transparently, this will ensure users understand how the running costs translate to the needed amount of DGTX that needs to be issued in order to keep the platform running. The spending of this funds will be transparent, and users will be updated on this details.
DGTX Key Features
DGTX is the local currency of the Digitex Futures Exchange
The tick size of the Digitex Futures Exchange is 1 DGTX token
Requirements for trading each future on the Digitex Futures Markets should be made in DGTX tokens, all financial actions are expressed with the use of the DGTX tokens
Unlike other exchanges where users stand the risk of losing their assets by storing them on the exchange; accounts balances are not stored Digitex Futures Exchange they are stored by an independent smart contract. The funds will be denominated in DGTX tokens, being the primary currency of the exchange
2 years after the launching of the Digitex Protocol Tokens, the new DGTX tokens that will be issued will allow the exchange to operate commission free
At the DGTX Token Initial Coin Offering (ICO) an initial supply of 1,000,000,000 DGTX will be minted, which is one billion DGTX tokens at unset
After the launch of the Digitex Futures Exchange, no additional tokens will be created, this allows the initial tokens circulate and increase in value
And 2 years after the launch of the platform, a new set of DGTX tokens will be issued, and this will be used to cover the cost of running the Digitex Futures Exchange
Within the 2 year duration after the DGTX ICO, the Digitex Futures Exchange will attract traders who will hope to take advantage of the commission-free exchange, this will drive up price and liquidity of the DGTX token. This demand will offset the inflation that will result from the creation of new DGTX tokens
DGTX is an ERC - 223 token, and it can be traded for other cryptocurrencies including BTC, ETH on the Digitex Futures Exchange
Holders of the DGTX tokens can actively trade either buying or selling of liquid futures contracts, on the market price of BTC/USD, ETH/USD, LTC/USD. They can trade these currencies without incurring cost in transaction fee, similar trades on other exchanges will incur commission fees.
DGTX Token Distribution and Supply
At the beginning of the initial sale of the token, 1 billion DGTX will be disbursed. 65% of this goes to the public on sale, 20% goes to Digitex Market Makers, 10% goes to the Digitex team and the advisory team too, and the remaining 5% goes to the referral program. A 3-year vesting schedule has been tied to the 10% allocated for the team and the advisors, 100% of the whole sum won’t be available, until the end of the 3-year duration. The will create a deficit because, after the token’s initial auction, there will only be 90% of the DGTX in circulation, as the remaining 10% will be tied to a 3-year vesting duration.
1000 Million Total Supply
- (65%) - 650 Million DGTX (Token Sale)
- (20%) - 200 Million DGTX (Digitex Market Makers)
- (10%) - 100 Million DGTX (Current and Future Team members)
- (5%) - 50 Million DGTX (Referral)
Digitex Futures Exchange
This is the trading environment where the trustless buying and selling of cryptocurrencies, futures contracts and other digital currencies with zero commissions paid. The exchange uses a decentralized wallet, where users won’t need to have their funds on the exchange. With the use of smart contracts, traders can trade on the exchange, and carry out transactions using the DGTX tokens.
Highlights of the Exchange
Zero in Trading Fees - By transacting with DGTX token, which is the native cryptocurrency of the exchange. The exchange operates by minting new DGTX tokens, instead of charging transaction fees.
Decentralized Accounts - Funds are not stored on the exchange, instead, they are stored on an independent, decentralized smart contract on the Ethereum blockchain
Decentralized Governance - The decision to issue new tokens rests on the hands of holders of the DGTX tokens, as the exchange uses the Decentralized Governance by Blockchain in deciding the amount of new DGTX tokens that will be issued
Digitex Futures Exchange Vs Existing Exchanges
When comparing the Digitex Futures Exchange and the conventional existing exchanges out there, one thing is for sure, transaction fees. Digitex Futures Exchange charges nothing in transaction fees, while conventional exchanges charge transaction fees on several actions you take on their exchange, and in most cases, this fees can turn profitable earnings into a break-even or sometimes, it may constitute that the trader will incur some losses.
Source - Digitex Whitepaper
Digitex fee comparison with bitMEX
Above, is an image showing the impact transaction fees can have on a trader’s earning Digitex Futures Exchange is solving that problem by cutting out transaction fees.
Use Cases
Case 1 - Mr Ibrahim
Ibrahim has been without a job and he has been trading cryptocurrencies for the past 18 months since he lost his job. His portfolio is pretty small due to the limited resources he has at his disposal. And despite the size of his portfolio, Ibrahim is mandated to still pay transaction fees on the various exchanges he trades on.
This is quite frustrating for Ibrahim because what may seem like a profitable trade, but because of the transaction fees he has to pay, if he is lucky, this trade will end up being a break-even; else it will result to Ibrahim losing part of his capital while paying transaction fees. Ibrahim is unhappy.
He accidentally stumbles across Digitex Futures Exchange on a random search query he ran on Google, and he was amazed by what he found. He promptly created an account, and proceed to secure some of the DGTX tokens. Ibrahim is happy, because, he has finally found an exchange that won't skin him alive in a bid to pay transaction fees.
Case 2 - Flora
Flora is a crypto maestro, she has been into the cryptocurrency since the days when Bitcoin was a few dollars in price. So she is respected in the crypto space within her locality, as her reputation is quite solid. She often gets calls and requests from clients, all of whom ask her a wide array of questions. But the one question she always gets asked is "Is there an exchange out there that doesn't charge transaction fees?" And she usually gives the same answer time and time again - No!
She became concerned with the question, and then decides to do a little digging herself in a bid to find a solution, and also be able to add value to her clients. Her research was quite extensive, and she eventually found Digitex Futures Exchange and she was really impressed with the project and with her first-hand experience dealing with crypto investors, traders and enthusiasts, she knew she has found something good.
She secured some tokens herself, and used the platform to be sure of its authenticity, in order to attest for its buoyancy, she won't recommend what she is not certain of, her reputation depended on that. Finally, she was done with research and testing of the platform. Flora how has a new weapon in Arsenal, she now has a solution that solves people's problems of paying transaction fees exchange.
And she is going to introduce them to commission free exchange.
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digitex2018
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Twitter Link
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Conclusion
Digitex Futures Exchange is a glimmer of hope for every futures trader out there like myself, an exchange where a penny won't be charged in transaction fees is the crypto trader's Utopian. The DGTX tokens that serve as the local currency on which the Digitex Futures Exchange is built on, has a very strong use case, and despite the periodic issuing of new tokens that will be used to cover the cost of operations that may cause a bit of inflation. The token has a lot of potentials to become one of the top tokens in the foreseeable future.
As traders flock into the Digitex Futures Exchange in order to take advantage of the commission-free policy of the exchange, they will be mandated to acquired the DGTX tokens. All these activities will drive the value of the DGTX token off the roof. And with this increase, it is certain the Digitex Futures Exchange will sustain itself, and the DGTX token will keep increasing in value as more and more traders come onboard.
More details of the project can be found below in the Information and resources appendix.
Information and Resources
Digitex Website, Digitex Whitepaper, Digitex Blog, Digitex Telegram, Digitex Reddit, Digitex Facebook, Digitex Twitter, Digitex YouTube.
