Digitex|| A commission-free, trustless futures exchange
Digitex is one of the first Futures Exchange which will have zero trading fees making it lucrative for traders. Further, it provides security by ensuring that the user balance and other details are held in a decentralized manner through a smart contract on the Ethereum blockchain. If this is not enough, even the governance will be decentralized allowing the users to decide on the DGTX tokens to be generated in the future.
Digitex Special Features:
1. Commission Free Futures Trading
The obvious and most important benefit is the formation of a commission-free exchange. The DGTX token is an ERC223 compatible token on Ethereum Blockchain which will be the exchange’s native currency. All traders, therefore, would be buying the token for trading. All their profits, losses, margin requirements and account balance will be denominated in DGTX tokens. In other words, the operational cost of the exchange can be covered by creating new token instead of charging transaction fees. In doing so, the commissions on trade can be eliminated.
The entire model enters a virtuous cycle, as the demand for DGTX tokens increases with more and more traders wanting to join the commission-free futures trade revolution, which further allows creating new tokens to fund costs and meet future demand.
2. Hybrid Futures Exchange
The dependence on a decentralized only exchange or centralized only exchange has its own challenges. What are they? They are explained below:
These are points which have been looked at by the Digitex Team to arrive at a hybrid model where the benefits of both models are built-on and at the same time the negatives are eliminated.
Digitex is the intelligent combination of the speed and reliability of centralized servers with the trustless security of decentralized smart contracts.
The way it is designed is that the Central Matching Engine and Order Book is on central servers and the exchange interacts with smart contracts to update user details. So, the user details like balance, margin liability, profits, and loss are decentralized and under the individual’s control. The exchange does not have physical control of the funds and hence, no wrong-doing is possible by the exchange, assuring privacy and security.
The advantages are:
- Digitex does not have control of individual funds and hence cannot involve in nefarious activities, either through external pressure or internal leaks
- Digitex does not hold private keys and hence not a hacking target. Neither does it run the risk of giving out individual information, in an unlikely circumstance of being hacked
- The matching and book orders on the central servers allow real-time trading
- Scaling up of the central servers with more traders coming in can also be accommodated
- Only when a user wants to withdraw his or her balance will the smart contract check with central servers and updated balance and other details. This way, the gas costs, because of the on-chain transaction can also be reduced
- The above-said point is the only potential for a hack which is undone by the smart contract computing a person’s trade from scratch for the matched trades and then updating the balance. A hacker would be unable to send incorrect details which he could do only by matching all trades done earlier. An unlikely and impossible task
3. Decentralized Governance
Much like the account updates on the blockchain, Digitex brings the governance also to the blockchain. New token issuance is managed democratically through rules and voting systems that are built into the smart contracts and enabled by the DGTX token owners.
What is the impact of giving users the power and control over how the Digitex Futures Exchange is funded?
The biggest assumption in allowing users and owners of DGTX to control the new token release is that users will act on self-interest, leading to the success of the exchange. It also brings in the added aspect of adaptability as the owners will decide the increase or decrease in token issuance based on market conditions.
The expectation is that users will provide a well-thought-out proposal on issuance of token taking care of inflation costs, development and operational costs of the exchange, and additional demand for tokens by new users, balanced by the fact that the additional tokens do not lead to decrease in the value of the token at the hands of the current owners. This balanced approach would take care of the smooth working of the exchange.
The owners can also decide to delegate their voting power if they are unable to actively participate and vote for the issuance. The delegation can be done to a trusted party who the user believes will act responsibly in taking the correct call on the issuance of tokens.
This, in a nutshell, talks about Digitex as a commission-free Futures Exchange.
Take a look at the following video about Digitex by CEO Adam Todd:
Look at the outcome:
As we can see, the same example of buying BTC has resulted in differing profits (in fact, a loss too) at different exchanges. The aspect of zero — fee is beneficial to the users on the Digitex platform. Not only this but users need to also notice that the minimum balance required to trade is the least with Digitex while the balance is held by the smart contract and not by the exchange.
Let’s summarize the overall Features of Digitex:
Zero Trading Fees
We’ve already seen the reason for zero trading fees and how it allows traders to profit on the platform. This forms the single biggest advantage of Digitex Platform.
Decentralized Account Balance
Since the users hold the fund as much as their balance through a smart contract, there is absolute privacy and security in transactions. Besides, all the risks associated with the balance being held by exchanges are mitigated.
One Click Trading Platform
The Digitex Futures Markets are displayed on an intuitive ladder interface allowing traders to buy and sell with a single click. The idea is to reduce the need for a mouse or keyboard inputs as much as possible and Digitex team have been largely successful in that.
Highly Liquid Futures Market
As the commissions are removed, traders find Digitex as an ideal place to trade for both short-term and long-term. This ensures liquidity in the exchange. Also, the Automated Market Makers add the additional liquidity desired.
Digitex Native Cryptocurrency
We have seen how the use of DGTX currency allows the exchange to do away with commissions. This is the model which will continue to be used and will ensure the growth of the exchange further.
Token Issuance Revenue Model
Because the users are involved in the voting of new token issuance, the model automatically forms a great balance of managing inflationary cost, development and operational cost of managing the platform, meeting demand from new traders with the right quantity of token to be issued, ensuring that there is no deterioration in the value of the DGTX tokens.
Large Tick Sizes
The large tick size is a distinctive feature of the Digitex Platform. The tick size defines the minimum price differential that a futures contract can move to. The large size like that of $ 5 for BTC/USD, ensures that the noise and volatility are handled and the prices are displayed in a user-friendly manner rather than disappearing from the top or bottom.
Automated Market Makers
This is one of the features which enhances the Digitex Exchange’s ability to stay liquid. The market makers are trading algorithms that are programmed to break-even. With 20% of supply available with them along with a really active trading strategy, the market makers ensure liquidity and allow traders to enter and exit easily.
Decentralized Governance by Blockchain
This facility, as we had initially discussed, allows the continuity of the Digitex exchange by its users. The continuity stems from the fact that the users will be concerned with their self-interest and hence ensure the success of the Exchange.
Off-Chain Negotiation and On-Chain Settlement
Being a Hybrid Exchange, Digitex builds on centralized trade servers interacting with decentralized trader accounts through the Exchange. This ensures that the real-time speed of trading, as well as the security of the blockchain, is available to the users.
Bitcoin, Ethereum and Litecoin Futures
Digitex has 3 futures market of BTC/USD, ETH/USD and LTC/USD with large tick sizes.
High Leverage Futures Trading
Digitex offers high leverage to traders, nearly 100 times, from relatively small price movements. Also, unlike other exchanges which may cancel a winning trade to protect itself if the counter-party was too highly leveraged, Digitex does not interfere with trade.
Digitex is built on the Erlang/OTP Stack, the same programming language like Whatsapp, so that it can be fast for real-time updates and handle spikes, with less or no latency. The Digitex order matching engine matches trade in less than 1 millisecond and has the ability to scale up to handle millions of concurrent users.
Digitex leverages blockchain for the known advantages of decentralization, storing of balance information through smart contract, and the most important function of governance through the voting of its members.
Being a blockchain, it goes without saying that privacy is a given. However, the important part is that the balances and other details are in the smart contract and nothing of the user is stored on the chain. Which means, even in an unlikely scenario of being hacked, the Exchange does not risk giving out user details.
No Auto Deleveraging
Digitex will never cancel out a winning position to protect itself, as most Bitcoin exchanges do. It is not the winning parties fault if the counter-party is highly leveraged. This should make it a trustable trustless Exchange.
- Digitex Website: https://digitexfutures.com/
- Digitex WhitePaper: https://www.digitexfutures.com/whitepaper/Digitex-Whitepaper.v.1.1.pdf
- Digitex Telegram: https://t.me/digitexfutureschat
- Digitex Reddit: https://www.reddit.com/r/DigitexFutures/
- Digitex Facebook: https://www.facebook.com/DigitexFutures/
- Digitex Twitter: https://twitter.com/digitexfutures
- Digitex YouTube: https://www.youtube.com/channel/UCjY3JG9agHi2ePDTm6sJysw