August
11, 2020
9 min read
Opinions expressed by Entrepreneur contributors are their own.
Since the inception of Bitcoin in 2009, a massive ecosystem has sprung up around it. There are now well over 5,000 cryptocurrencies listed on the popular industry data aggregator site CoinMarketCap. So, what distinguishes one cryptocurrency from another and how do investors know what to look for at the time of selecting a project of choosing an exchange to trade on?
Adam Todd, CEO and founder of zero-fee bitcoin futures exchange Digitex Futures, explains why a cryptocurrency must create utility to stay the distance—and how his exchange’s native token DGTX is primed to disrupt the cryptocurrency trading industry.
How Digitex Differs From Other Exchanges
Just as there are thousands of cryptocurrencies, there are hundreds of exchanges all competing for a user base. This makes for an extremely competitive market in which most exchanges come and go after failing to attract liquidity or offering a significant advantage to hold traders’ interest. Digitex Futures is different from all other exchanges in that it has chosen an entirely unique model—making all trading completely commission-free.
Todd explains, “Our main differentiator is that unlike all other exchanges on the market, we don’t charge a single fee on any trade. We can sustain this by the use of our DGTX token which traders must purchase to participate in liquid commission-free markets. We enable traders to execute high-frequency trading strategies such as scalping that have been impossible until now.”
Scalpers accumulate small profits over time and take advantage of the smallest movements in price fluctuations. This simply cannot be done when traders have to pay a commission on every trade. A classic taker fee for example is 0.075 per cent. This may not seem very much but if a trader is using leverage of 100x, that equates to 7.5 per cent. This type of commission tears into traders’ profits and even turns winning trades into losing ones.
“Once more traders learn that they can place trades over and over and even scratch them at no cost, more will flock to the platform bringing more and more liquidity which stays in the collective pool; we don’t siphon it out in the shape of commissions.”
Making Zero-Fee Trading Sustainable
Digitex’s commission-free trading model operates around its DGTX token. All account balances, margins, and trading profits and losses are denominated in DGTX tokens. So traders must own DGTX to participate in its “scalpers’ paradise”, thus creating a virtuous circle and a constant demand for the token.
This demand allows the exchange to cover its costs by periodically selling a small number of tokens from its Treasury rather than charging volume-based transaction fees. At the time of press, the market capitalization of DGTX was $85 million and, since being launched, DGTX tokens have passed through more than 34,938 wallets.
“It’s a revolutionary new revenue model for an exchange that dramatically increases a trader’s chances of winning, and traders are discovering that for themselves in droves,” enthuses Todd.
Not only that but DGTX has that real-life, actual utility that all cryptocurrencies need and that makes people want to own it and use it on a daily basis. The DGTX token is the only vehicle by which traders can engage in fast-paced, ultra short-term trading on a liquid futures market without paying any trading fees.
“I spent a few years as a pit trader in London scalping German government bond futures and I know firsthand how crippling transaction fees can be, even when they seem to be very small,” Todd explains. “That incessant, insidious edge of trading fees is always working against you.”
He says that owning DGTX can drastically transform traders’ results. “That’s real-world utility right there, and that’s why our traded volumes are breaking new records every day and the price of DGTX rose by around 85 per cent upon anticipation of the launch.”
Long-Term Potential of DGTX
Todd argues that it is precisely the real-world utility of DGTX that also makes it a good token for longer term investors who may be looking for a speculative investment with upside potential.
“Since opening the doors to exchange,” he says, “there’s been a clear correlation between the number of traders we have onboarded and the price of the DGTX token. And this makes perfect sense because as demand for the token increases from new traders the price naturally rises with that demand.”
After a lengthy development period, Digitex finally opened its doors to the public on July 31. Todd now says that “all that’s left” to do is to “spread the word” to more traders who want to execute short-term scalping trading strategies.
“Our success so far with a phased launch shows all the signs that the DFE (Digitex Futures exchange) will soon become a major futures exchange to rival other market players.” Digitex isn’t stopping at being a zero-fee cryptocurrency futures exchange either. Development of a zero-fee spot market is also underway as well as plans to amplify the use of the DGTX token further through gambling and other trading platforms.
“We’re only just getting started. You ain’t seen nothing yet with regards to the demand we will create for DGTX tokens,” Todd reveals. “We have huge plans for Digitex coming up. I will be revealing these plans in full around the end of August by publishing an updated Digitex whitepaper that explains how we are going to exponentially increase demand for DGTX making it an excellent long-term hold.”
Other Competitive Advantages
Besides creating a level playing field for traders with no mechanical edge working against them in the form of commissions, Digitex also offers the crypto industry’s first one-click trading ladder allowing for ultra-fast trading when time is of the essence.
This is a very common tool in traditional futures but hadn’t made its way into crypto until now. “Zero fees isn’t our only USP,” Todd ensures, “We also offer a very user-friendly one-click trading ladder. Traders can really get in the zone, as the price moves up and down and they can place trades with a single click next to the price they want to buy or sell at. It’s a great trading UI for stealing quick single tick profits and you can really put a lot of volume through it when you get going – the kind of volume that would bankrupt you on a fee-charging exchange.”
The Digitex exchange is also mobile responsive which means that traders can rack up these profits even when they’re on the go. Todd is also keen to stress that Digitex isn’t built exclusively for scalpers either as its deep liquidity is highly advantageous to longer-term traders as well. He says:
“Scalpers create very liquid markets with their frenetic activity and this liquidity attracts longer term traders who might not be that interested in zero fees but are attracted to being able to get in and out of large positions with no slippage.”
Where Digitex Goes From Here
Currently, Digitex offers just one market, a BTC/USD perpetual swap. “I wanted to concentrate all the liquidity on one popular market to give us the best chance of getting the volume cranking, and that’s exactly what we’ve achieved,” he says. “The 24-hour volume on our BTC/USD perpetual futures market now exceeds $600 million worth of Bitcoin futures contracts and is breaking new records almost daily.”
Todd goes on to say that creating a brand new market from nothing requires attention and intuition as you “breathe life into it.” He says that he knew the “secret sauce” was in the market making.
“When we first launched the mainnet to a closed group of 20 traders back in April 2020 it was up to me to create a thick order book of bids and asks with a tight bid/ask spread that closely followed the Bitcoin spot price and where traders could easily get filled at any time, especially when the price of Bitcoin was volatile. Maintaining a market like this is the key to success and I wanted to really figure it out on one market only.
Fast forward to today and the traders have taken over. My market makers’ bids and offers are now only about 3 per cent of the total bids and offers in the order book at any one time. Now we’re ready to create more futures markets on more cryptocurrencies such as Ether and Ripple’s XRP. We’re also planning futures markets on more traditional instruments like oil, gold and the S&P 500, where traders can also scalp with no commissions on any trades while they win and lose DGTX tokens.”
Closing Thoughts
Digitex certainly seems to have gotten off to a good start, but can it hold the interest of a notoriously fickle crowd? If its ambitious founder has anything to do with it, then, yes. He enthuses:
“People will be blown away by what we are building and I fully expect DGTX to catapult up through the rankings on CoinMarketCap to make us a top 20 cryptocurrency by market cap this year. My role now is to create as much demand for the DGTX token as possible. You will soon see how seriously I have adopted my mission.”