‘Digitex Futures’ - This New Fee-less, Blockchain Based Futures Exchange Uses Ethereum’s New Plasma Protocol & Changes The Landscape of Futures Trading Forever!

I recently posted to give an overview of the new Digitex Futures exchange trading platform, due to go to beta before the end of the year. Digitex have now demoed their product at the Malta Blockchain Summit and generated a lot of excitement in the process. Digitex Futures are the only crypto exchange stating that they will be using the initial version of the Ethereum Plasma Protocol which dramatically increases the amount of transactions that Ethereum based platforms can handle per second, meaning Ethereum can now potentially scale effectively for some blockchain use cases. Let's take a look behind the scenes as to what exactly this might mean for Futures trading, Cryptocurrency and blockchain technology in general...

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Digitex Futures is a new, hybrid cryptocurrency and futures exchange that offers several unique selling points, including:

• The use of the Ethereum blockchain to hold their clients' tokens (insuring against loss in case of the exchange disappearing).. So there's no risk of losing your money as happened with Mt. Gox years ago.
• Free Trades! No Commission Fees are involved due to the use of the DGTX tokens.
• Digitex does not hold any private keys for their clients' tokens - so they may not be much of a target for hackers.
• Easy to use User Interface that allows very fast trading.
• Highly respectful of privacy.
• Extremely high speed order matching.
• Large 'tick' sizes during trading ($5) to maintain a stable user experience.
• Decentralised governance regarding issues relating to management of the DGTX token.

In short, Digitex represents the next generation of hybrid currency exchange, combining decentralised, blockchain based features with traditional centralised servers to deliver the best of both worlds for their users.

You can read the white paper for the Digitex project here.

A key, recent, move for Digitex has been getting their token (DGTX) listed on the cryptocurrency exchange HitBTC.

Additionally, they recently demoed their pre-beta version of the Digitex Futures Exchange live at the Malta Blockchain Summit, you can read more about it and watch the video in their blog here.

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Ethereum is a blockchain based computing system and cryptocurrency token that allows developers and business projects to complete computing processes and manage contracts / currency simultaneously. Ethereum has consistently been in the top 5 cryptocurrencies in terms of it's level of market capitalisation and is one of the best known blockchains in the world. It has long been understood, however, that similar to the original cryptocurrency - Bitcoin - Ethereum's design has meant it has trouble scaling to be able to carry out high volumes of transactions at a high speed. The Plasma Protocol is Ethereum's answer to this challenge and limitation.

While the Plasma Protocol's own white paper is highly technical and not easy to approach as a casual reader - the essence of the protocol is to provide a method for secondary chains of blocks/data to be created away from the primary Ethereum blockchain. The summation of these chains is then written to the primary blockchain only at certain points, rather than continuously updating the main Ethereum blockchain with all transactions as they occur on any app that might want to write high volumes of data to the primary Ethereum chain. By aggregating large volumes of transactions into smaller, less regular transactions - the volume of data needing to be written to the main Ethereum chain can be minimised and therefore, the ability for apps running high volumes of data to record their activity to the Ethereum chain is dramatically increased.

image source: thematter.io

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Matter Inc. are a company who specialise in using the Plasma Protocol to empower certain industries, with a particular focus in applying Plasma to decentralised exchanges and other financial products.

Their Short Explanation of themselves makes clear the kinds of benefits they are seeing with their use of the Plasma Protocol:

Our benchmarks show 22000 transactions per second with the commission about 0.005$ per transaction. As a reference, the bandwidth of the main ethereum network is about 15 transactions per second with a commission 0.3$ - 1$.

Matter Inc. approached the CEO of Digitex, Adam Todd, about working with them on the Digitex project and he jumped at the chance - recognising the potential to truly provide a service that has not been able to exist previously due to technological limitations.

As Digitex explained in a recent blog:

The Matter Inc. team has announced that their company is ready to release one of the first production-ready implementations of Plasma Protocol created in tight contact with the Ethereum Foundation.

Alexander Vlasov, Head Researcher at Matter Inc., approached Adam about working with them. Naturally, Adam jumped at the opportunity to be the catalyst company that showcases Plasma technology. In partnership with SmartDec and Matter Inc., we will bring about the Ethereum blockchain’s much-needed solution to their scalability problem with the Digitex Futures exchange version 2 during the second half of 2019.

Why Does Digitex Futures Need Plasma?

Currently there are two types of exchanges: centralized and decentralized exchanges. Centralized exchanges have central servers that are very fast and reliable, offering real-time trading and all the benefits that come from that. However, centralized exchanges must hold your funds, meaning that you must trust them with your money.

Decentralized exchanges allow traders to trade without having to trust the exchange or their trading counterparties with their money. However, this means that all trades must hit the blockchain which makes it slow and costly in terms of network fees, making it unsuitable for real-time trading.

Plasma will allow Digitex to combine the best aspects of a blazing fast centralized order matching engine that allows real-time trading with the security and trustlessness of a decentralized exchange that doesn’t need or want custody of its traders’ funds.

The Plasma Protocol is going to be a game-changer for the Ethereum blockchain, and our CEO Adam is one of Ethereum’s biggest fans, calling it the missing piece of the internet.

So it is clear that Digitex's partnership with Matter Inc. is a powerful one and it will be key for the cryptocurrency world and financial services world in general to track the success of Digitex's entry into the highly competitive exchange and futures markets.

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Ultimately, being able to make use of a public blockchain directly to store account data for traders is a powerful feature for numerous reasons:

• Since the funds are literally held on the Ethereum blockchain and managed by smart contracts that are not editable by Digitex, it cannot be shown that Digitex has any control over the funds. This means that the funds will be secure in the event that Digitex disappears or that legal action attempts to force Digitex to hand over the contents of a client's account.
• Transactions passed to the Ethereum blockchain can be independently monitored and verified for correctness by anyone with the intent and know-how to do so. In the even that Digitex is found to be acting fraudulently, all funds that are in use are returned to the client automatically.
• The 'trustless' nature of the system means that customers of Digitex do not need to rely on trust in their transactions - that is to say that they do not need to trust that Digitex or their trading partner will honor their side of the deal they are engaging in. Instead, rules enforced on the Ethereum blockchain will ensure their funds are safe.
• By using an Ethereum ERC-20 token (called DGTX) to fund all trades on the Digitex Futures platform, transactions will be simple to track in a uniform way on the blockchain and there will be a demand for the DGTX tokens that will push their price up and will also cover the costs of the exchange transactions - enabling Digitex to offer zero commission/fees for trades!

I am certain that many other exchanges and financial service providers will be keeping a keen eye on Digitex after it launches in the next few weeks and will be looking carefully at whether their own market position in threatened by the introduction of this new technology and the features it brings us. We only have perhaps about 6 weeks before the first beta launch of Digitex Futures - so stay tuned for more information coming soon!

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The Digitex system is due to launch in the near future and they have a waiting list of over 150,000 people waiting to use their new platform!

As part of their launch and marketing process, they are offering an airdrop of between 1000 and 100,000 DGTX tokens to new users, which will be awarded based on the number of new user referrals that each user generates.

Sign Up To The Digitex Waiting List and AirDrop Referral 'Contest' Here

Unlike other airdrops, the tokens are not said to be offered in a guaranteed way, since the offer is in the form of a marketing contest - however, at least the tokens air fairly likely to be available and be distributed from this airdrop!

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• Project Website: https://digitexfutures.com/
• Products & Services:
  https://digitexfutures.com/exchange/
  https://digitexfutures.com/dgtx/
• Digitex Team: https://digitexfutures.com/about-us/
• Facebook: https://www.facebook.com/DigitexFutures/
• Medium: https://medium.com/digitex-futures
• Twitter: https://twitter.com/digitexfutures
• Youtube: https://twitter.com/digitexfutures?lang=en
• LinkedIn: https://www.linkedin.com/company/digitex-futures-exchange/

The information contained within this post shall not be taken as a financial advice. I am not a financial advisor and none of your investment decisions should be carried out based on any information presented here. You can lose all of your money by investing. The information presented in this article is for educational and entertainment purposes only.