Meet “Digitex”: commission-free futures trading is now a reality

An established industry always has a futures market

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Every healthy and successful industry has a high financial activity where people can trade with each other on a constant basis, facilitating the possibility of having a highly dynamic market in which traders can develop and apply their strategies in order to achieve the best possible profit, therefore, highly versatile financial instruments are certainly something necessary to traders so they can count with a complete range of options regarding how to move their investments in the most effective way they could think.

One of these financial instruments are future contracts, they are defined as “… an agreement between two parties – a buyer and a seller – to buy or sell an asset at a specified future date and price. Each futures contract represents a specific amount of a given security or commodity”. | Source This particular instrument is useful because it allows both parties to set the conditions of their future negotiation without worrying about what might happen regarding price movements or any event that could have an impact in the market, in a way, future contracts can offer a certain stability in any industry, even when it comes to cryptocurrencies and its inherent volatility.

The blockchain industry, its futures markets and the impact of fees

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Blockchain technology with all the different cryptocurrencies, is the manifestation of an entirely new industry that even though it is very volatile, it has been gaining a lot of worldwide recognition thanks to the amount of innovation that is being created with clear potential to disrupt several industries. Since in this case, people are dealing with a new generation of currencies, traditional financial instruments need to be adapted to leverage the advantages that decentralization makes possible.

In the crypto sphere, exchanges in general, need to charge transaction fees to cover expenses such as the maintenance of the platform and development costs, and this obviously reduces the profit of the people doing these trades, the impact of fees in trading profits can be so strong that it can even make a profitable trade become unprofitable. Below we can see a particular example of something like this happening with exchanges that have fees and comparing them with the Digitex that doesn’t charge any fees:

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It is clear that the presence of fees can discourage a lot of traders from participating in transactions where their profit is not capable of covering the corresponding commission, which means the financial activity could be lower, resulting in the market being less dynamic and less active.

So far, charging fees was the only way to make this type of platforms something sustainable, but thanks to the breakthrough capabilities of blockchain technology, it is now possible to cover these costs without charging any type of fees whatsoever, and as we can see in the image above, Digitex is one of these projects making this idea finally a reality.

What is Digitex?

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Digitex is the first exchange that will allow its user to participate in cryptocurrencies futures markets without needing to pay any fee for the transactions that they make. In order to participate in this exchange, people will have to first buy a certain amount of the DGTX tokens, which are the currency fueling every activity that takes place in the exchange, buying these tokens is required because every “trader must have a margin balance of DGTX sufficient to cover his potential losses”. | ^Source

Zero fees and sustainability

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The strategy that allows Digitex to be a sustainable project without charging transaction fees consists in using their own token sales as a way to gather enough resources and cover every single one of the project’s expenses. Since this token will be required to participate in the Digitex futures exchange, traders interested in this will buy the token, and then proceed with their trading activity. This dynamic will create a demand for the token, and eventually, a self-sustaining economy with the DGTX token as the central part joining all the parties together.

Regarding the management of the resources to fund the project, it is important to notice that for the first 2 years the project is going to run with the resources they already received in the ICO (which only lasted 17 minutes before being completed ^Source), and after 2 years, there will be new tokens created that will be sold in the market through a smart contract, and use these resources to further develop the project. This will be a fully audited event to ensure transparency.

This will allow crypto users to have a new way of trading with futures, and will surely facilitate the developing of more trading strategies to optimize as much as possible their time and their holdings. Since the DGTX token will be required, some users might have the need to protect themselves from any considerable price swing regarding its price, which is why Digitex can offer them a way to peg their DGTX tokens to the current price of Bitcoin or Ethereum and sell these tokens later through the use of a smart contract, effectively applying traditional futures principles in the cryptocurrencies industry. The result of this will be an increase in the possibilities of trading strategies and general activities, making this market a more energetic one, and therefore, a more attractive market to investors in general.

Decentralized governance in Digitex and its impact

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Since there will be inflation due to the creation of new tokens, every single individual who has DGTX holdings, will have the right to participate in the decision making process regarding the number of new tokens that should be created when the time comes. The larger the holdings, the stronger the vote will be from the particular token holder, and clearly it is in the interest of everyone involved to find the best possible balance between avoiding too much devaluation by creating too many tokens, and guaranteeing the project has enough resources to continue with its development in the best possible way, besides, given the fact that everyone involved will be able to participate and cast their votes based on what they think is the best, this will ensure that governance is fully decentralized and allow for the optimal efficiency of available funds to take place.

The best possible scenario, is to have the increased market demand for the token outweighing the negative effect inflation could have in the price, and this will only be possible if the exchange operates in a proper way and can scale when massive adoption starts to happen. However, there are a few projections we can see below, where the higher percentage of inflation needed would only be 5.5%.

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Nevertheless, the actual % of inflation and its corresponding amount of new tokens created will be decided by DGTX holders in the near future. This will certainly make every trader involved to become much more interested in the project itself because their own opinions will matter and will be taken into consideration thanks to the implementation of the decentralized voting system. Users will be encouraged to be constantly informed about the state of the project, so they can have enough information to take the best decision for everyone involved, and this will avoid having users thinking their needs or interests are being ignored, which is a feeling that might be present in other similar exchanges.

Leveraging decentralization to secure traders funds

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In the Digitex futures exchange, the private keys are not in the hands of the exchange, instead the funds are secured by a smart contract in the Ethereum network, this adds a new layer of protection for users because even in the remote scenario that Digitex gets hacked, users funds won’t be lost because Digitex will never have control of those funds in the first place.

The same happens with other circumstances such as exchanges freezing users accounts for any reason, with Digitex this simply won’t be possible, which could surely make users feel much safer because their funds aren’t in a vulnerable place.

Besides, since this exchange won’t require any private information typical of KYC/AML (Know your customer / Anti Money Laundering) procedures, the risks of having private information leaked due to hacks is non-existent, allowing users who want to protect their privacy to feel completely secure.

Understanding Digitex’s key aspects

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In the following image we can see which ones are the most important features that will help Digitex achieve success, some of them are pretty straightforward and don’t require any explanation, however, there are a few which might not be self-explanatory, which is why I will explain them below.

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• Decentralized Account Balances: as explained before, this feature consists in the fact that users holdings are not going to be held by Digitex, but they are going to be under the protection of a smart contract in the Ethereum network, which means, there is an additional layer of security for the users.
• Automated Market Makers: to guarantee liquidity so traders have no problems placing and executing their orders, Digitex will have 20% of the available tokens in the market to provide this liquidity.
• One-Click Ladder Trading Interface: with the goal of providing traders with the most effective and intuitive interface possible, they will be able to do their trading activities just by using their mouse or trackpad and clicking just one time to place orders.
• Large Tick Sizes: “In futures trading, a tick is the minimum price increment that a futures contract can move up or down” ^Source. There will be 3 futures contracts (BTC/USD, ETH/USD & LTC/USD), with Bitcoin the ticket size is going to be $5 USD, with Ethereum it is going to be $1 USD and with Litecoin it is $0.25 USD
• High Leverage: using leverage means trading with more money than what is actually owned, this can increase profits if the trade turns out positive, with Digitex traders will have available a leverage of up to 100×.
• No Auto Deleveraging: related to the previous point, when a trader is too high leveraged, some trades might get canceled to protect the money he doesn’t own, in the case of Digitex there won’t be any cancellation, which means people making good predictions won’t get their trade canceled if the counterparty was too high leveraged. ^Source

Taking into account everything mentioned so far, it isn’t hard to imagine Digitex ultimately becoming the leader of the futures exchanges in the blockchain industry. I wrote a personal prediction regarding the Digitex position in the market in the coming years:

Digitex in 2019: the exchange is just starting and most users are trying it out with a lot of precaution being the new platform that it is. At the end of the year, a lot of people are already accustomed to how this exchange works, are taking advantage of the one-click ladder interface, and the popularity is increasing rapidly as Digitex turns out to be everything people were expecting. Right now, even in 2018 we can see how Digitex started with the right foot, below we can see how it has performed in the previous months:

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Digitex in 2020: this is the year where the popularity completely explodes, people love to participate in an exchange with no transactions fees and they surely love the higher profits that are now possible. Everyone is already aware of how the one-click interface works, and the market understands the value of the DGTX token, which is why a lot of investors are getting exciting as 2021 gets closer.

Digitex in 2021: in this year Digitex is meant to issue and release new tokens into the market in order to cover the expenses of the project. After 2 years of reliable service, Digitex managed to position itself as the futures exchange with the most active user base. Once the new tokens are issued, the market rushes to buy them, resulting in a complete success and allowing the project to continue forward in their path to success.

Uses cases and applications

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Use case #1: a trader frustrated by fees

Harry is an active trader and he is very knowledgeable about the crypto industry because he keeps himself informed about the latest news of every major project to decide how to do his trading, besides, he is also very good reading price charts.

However, he has been getting very frustrated because he is not very happy seeing how his profits are always reduced by transactions fees, in some occasions even suffering fees that are larger than the original profit, he is planning to quit his crypto trading activities if he doesn’t find a solution soon.

Luckily, being the informed person that he is, he discovers Digitex futures exchange, and is blown away when he reads that it is a zero fee exchange, he decides to invest money in the DGTX token and later that day he tries the exchange for the first time. He ends up being amazed by how this exchange works, and the next day he starts to do his trading activities exclusively on this exchange, finally enjoying his profits without suffering destructive fees.

Use case #2: a trader annoyed by having his account frozen

Tom is an experienced person in the trading field, he tends to move a lot of money from one cryptocurrency to another in his pursuit of earning a profit. However, since he has been moving a lot of money his current exchange decided to freeze his account until he sends them sufficient documentation that can allow him to continue with the use of the exchange.

He becomes very annoyed because this process is taking time away from his trading activities, and he decides to look for an alternative where he won’t be disturbed with this type of things.

He discovers the Digitex futures exchange, and when reading about it he understands his funds are not controlled by Digitex, instead they are held within a smart contract in the Ethereum network, which means Digitex wouldn’t be able to freeze his funds even if they wanted it.

Therefore, Tom opens an account with Digitex, he purchases his first DGTX tokens and begins to happily continue with his trading activities.

The team

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Token distribution

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Roadmap

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Summary

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In the cryptocurrency industry, when people are trading crypto futures they can suffer from excessive fees they need to pay to the exchange for every transaction that is done, which can cause a considerable decrease in the profits and in some cases, this can even neutralize any potential profit leaving the trader with no revenue whatsoever.

On the other hands, it is also possible that some exchange decides to freeze users account for several reasons, leaving that trader unable to continue with his activities until the problem is resolved.

Digitex is planning to solve both issues by leveraging the capabilities of blockchain technology. First, they won’t charge transaction fees because the resources to keep the project going will be obtained by creating new DGTX tokens and selling them in the market. In order to have a decentralized governance model, it will be the token holders the ones that are going to decide the number of tokens that will be created, this tokens will be valuable because traders need them to place orders in the exchange.

The second issued related to accounts being frozen is going to be non-existent in the Digitex futures exchange. The funds are going to be held within a smart contract in the Ethereum platform, which means Digitex won’t be able to freeze any funds.

The end result of this should be a new generation exchange that gives more control to its users by allowing them to take part in important decisions that are generally preserve to people in the management, and allow said users to enjoy their complete profits without suffering from any type of fees, and without having the risk of getting their funds frozen.

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More information can be found in the following websites:

• Digitex Website
• Digitex WhitePaper
• Digitex Blog
• Digitex Telegram
• Digitex Reddit
• Digitex Facebook
• Digitex Twitter
• Digitex YouTube