The world is evolving, and this applies to every industry. For futures exchanges to survive, they also need to evolve and find ways they can offer more value to their users.
Users are displeased and put off, especially when they have no control over their transactions and they could wake up one morning, and everything they have worked for is gone.
Digitex is a zero transaction fee TRUSTLESS futures exchange that ensures that users can retain 100% value of tokens being traded. It is able to sustain itself by an innovative process, which we will look at in detail, in a bit.
2.0 COMMISSION FREE FUTURES TRADING
Instead of charging transaction fees, Digitex uses a process of minting a little supply of tokens, which are basically voted upon by users. To be able to vote, users need to be holders of Digitex token (DGTX) which is a native token that makes trading possible within the ecosystem.
Users voting power increases by the number of DGTX held. 1 DGTX=1 vote.
All account balances, as well as profit and loss of each user are displayed in DGTX.
Demand for DGTX will ensure that minting costs are covered. Seeing all activities within the ecosystem need DGTX tokens, the demand will be retained, and inflation caused by minting activities wont be a problem.
3.0 DIGITEX PROTOCOL TOKEN (DGTX)
This is an ERC-223 compatible protocol token, and it is based on the ethereum blockchain. Total supply of DGTX will be 1 billion tokens. 100m will be reserved for the founding team, in the form of vests (3 years schedule). 200m will be reserved by market makers. This means that only 700m will be available during the ICO.
No new tokens will be minted within the first two years, because its ICO will be able to sustain Digitex’s activities within this period.
New tokens minted in early 2021 will go towards covering staff salaries, maintaining facilities, marketing activities, maintenance of servers and software development, amongst other related costs.
Holders of DGTX tokens can purchase and sell liquid future contracts on BTC/USD, ETH/USD and LTC/USD prices, without any fees attached, be it small or large transactions.
We will be assuming that $150k worth of DGTX tokens will be purchased by 2% of big time buyers; 10% which is equal to $15k, will be purchased by mid level traders, and 88%, totaling $1500 will be purchase by low level traders.
Token Issuance Inflation Projections
To eliminate price risk on futures trades, the Peg System can be made use of. This enables users to lock in sales price at current market prices.
4.0 TRUSTLESS FUTURES TRADING
Digitex makes use of a hybrid system that borrows some features, both from centralized and decentralized exchanges. Decentralized brings better security. Digitex matching engine is centralized based, while it also makes use of smart contracts in handling account balances.
Some challenges of decentralized exchanges are:
- Latency prevents real-time trading
- Privacy issues
- Reliability and scalability related issues still abound.
- Margin trading is not yet a possibility on-chain.
Centralized Matching Engine & Order Book vs Decentralized Exchange
- Machine engines on centralized servers are extremely fast.
- Central servers have very high levels of privacy
- Central servers are very reliable and highly scalable.
- Margin trading is possible on centralized servers. This ensures traders can effectively use their account balances.
Digitex effectively ensures that its centralized servers trustlessly communicate with smart contracts from its decentralized counterpart. Digitex does not have access to traders funds. It cannot hijack funds, nor is there any means for traders funds to be misused. They do not hold any private keys either. This is essential in ensuring traders confidence and safety.
Communication between the centralized and decentralized aspects could be a target for hackers, who will be hoping to manipulate the system, to withdraw more funds than they have. Digitex is able to prevent this by calling up traders balances, calculating profit and loss from the foundation.
Metamask browser plugin can also be made use of, to improve users safety, seeing it ensures only that user can access his/her accounts. It is also totally anonymous.
5.0 THE DIGITEX FUTURES EXCHANGE
As we said earlier, this is a no transaction fee exchange. It makes the reality of purchasing and selling futures without transaction fees a reality.
Some of its features and benefits are:
- No transaction fees
- Highly scalable and efficient.
- Large tick sizes.
- Token issuance revenue model.
- Automated market makers bot.
- Has a native currency
- Extremely fast order matching
- Makes use of Decentralized Governance by Blockchain
- Privacy ensured
- Powered by the Blockchain
- BTC,ETH and LTC futures
- Highly liquid futures market.
Digitex markets have large tick sizes. BTC= $5, ETH= $1 and LTC= $0.25. Future markets are also displayed using ladder trading interfaces. They also offer traders high leverage up to 100x. This ensures that profits could be greatly improved. Digitex also doesn’t close users out of winning positions, to ensure it doesn’t incur losses.
6.0 DECENTRALISED GOVERNANCE BY BLOCKCHAIN (DGBB)
The blockchain ensures that Digitex is able to eliminate transaction fees and also enables the use of smart contracts, with regards to calling up the profits and losses of traders accounts. New token issuance is also efficiently implemented thanks to the blockchain. Voting on minting activities is also another feature that the blockchain makes possible.
DGTX holders will also be responsible for deciding the number of DGTX to create that will be sufficient to run the ecosystem effectively.
Voting power can also be delegated to trusted sources, seeing the process takes time.
7.0 USE CASES
Giovanni wishes to become active in the decentralized space, but he is worried about the losses incurred due to transaction fees, and doesn’t see the need to leave the comfort of what he already understands, as per traditional solutions of transferring value.
With the expected growth in decentralized markets in the next few years, Giovanni wants to be properly positioned in time for this.
He is referred to Digitex by a friend, and he discovers that he doesn’t need to pay any transaction fees for activities carried out on the platform. This ensures that he is able to retain maximum value, and he is very happy. This also motivates Giovanni to purchase more DGTX tokens to boost his holdings.
Digitex ensures that the way crypto enthusiasts relate to futures is improved vastly, by eliminating the need to pay fees, related to transactions. By giving users the power to decide on issues such as how many tokens need to be created to cover operations, users are totally in charge of their future and the direction in which the platform is headed. This also means that they are in charge of how their funds are managed and how value is exchanged on the platform.
Fees complicate issues like knowing how much of what a user holds will be sufficient for a transaction, and it also reduces the value users gain from trading activities. When this fee is eliminated, the portion that would have gone to the exchange goes to the trader, ensuring that he/she retains more value. This is also how trading fees kill profits.
Additionally, it also ensures that some users lose interest in trading activities, due to what they perceive as exorbitant fees.
After the launch of Digitex’s ICO in 2019, trader will begin to troop in. 2019 will be used to improve on its infrastructure, and also preparing for the massive influx of users, who will be looking for the best offers in 2020. The bulk of these will become a part of the ecosystem in 2020, and with scalability not being an issue, they will be accommodated easily. By putting all these in place, Digitex will be ready to receive these users, whose activities will ensure that the creation of new tokens in 2021 will not be a problem, and inflation related issues as a result of this will be absorbed easily.
Giving users the power to decided how Digitex’s Futures Exchange is funded basically means that users can steer the ship in the direction they wish. Decisions implemented will be the choice of majority, so most users will be retained, unlike when businesses make unpopular decisions without consulting their users. This prevents such a scenario.
Entry to @originalworks contest which can bee seen here