Going beyond exchanges: How COBINHOOD aims to be a full-service, blockchain-based fintech company
On October 19th, Investing.com’s Yaniv Cohen sat down with COBINHOOD’s CEO Popo Chen for a live chat. The serial entrepreneur and the visionary behind COBINHOOD discussed his vision for the future of a blockchain based economy and exactly how COBINHOOD are planning on being the first cryptocurrency exchange to offer zero fee cryptocurrency trading.
Below is the full transcript of the interview, along with the video. And you can also read investing.com’s feature about COBINHOOD where they called our zero-trading fee offering a “completely novel approach unique to COBINHOOD.” You can also read more about the interview here.
Full interview transcript
The transcript below is based from this video. Annotations for clarity have been applied and some details may appear different from the actual video.
Yaniv: It’s official; cryptocurrencies have completely disrupted the financial industry. And blockchain technology is starting to enter every major industry and service there is. I’m joined today by Popo Chen, the CEO and visionary behind COBINHOOD, the latest cryptocurrency exchange to enter the game, and the first to offer genuinely zero-fee trading. Wow, surely this is a game changer. Popo, thanks for joining us this morning.
Popo: Hi everyone! Nice to meet you, guys.
Yaniv: It’s a pleasure to have you, and we’re looking forward to understanding more about COBINHOOD. So what is the history behind COBINHOOD? When was your ‘eureka’ moment when you knew that you had to found COBINHOOD?
Popo: Let me give you a short intro of myself first. I’m Popo Chen, I’m a serial entrepreneur, and I have successfully exited three companies. The last company I exited is a live-streaming business which is now sold to Singapore’s Paktor group and now has 5 million daily active users. The valuation is around US$200 million. After I exited my last company, I started to do investments and portfolio management. And then cryptocurrency got my attention, and I became a daily trader last year. As I trade among different exchanges, I always feel frustrated. The platforms’ quality of service is very bad. High trading latency, difficult account applications, and poor customer service — and the high fees! Every month when I review my ROI and see I pay 25% of my margins as trading fees, I feel I am robbed by those exchanges! I don’t think platforms that provide such low quality of service deserve such a high fee. So I was inspired to make a ZERO fee exchange with the vision to provide the ultimate trading experience for traders all around the globe.
Yaniv: I also want to talk about the strong team you have behind you. I had a look at the website and some of the other YouTube videos you’ve put out there, and we can see that Tony Scott is involved. How helpful has he been? And can you explain a bit more who Tony Scott is and how you forged a relationship?
Popo: Tony Scott is the former CIO, Chief Information Officer, of the White House. And Tony has been the CIO of many large industrial companies like Disneyland and a lot more, so he’s very senior in this field. And life is full of coincidences. Our PR team contacted Tony, and luckily he replied. We shared ideas in a call, and he decided to visit our office during his trip to Taipei. We are extremely honored to have Tony on our advisory board. Tony and I had a long discussion regarding cryptocurrency, blockchain technology, government regulation, and his vision for the future which aligns with ours. We agree that the future of cryptocurrency and blockchain technology is bright, but that national and international regulations are needed to protect retail investors. Tony has led some of the biggest and most admired companies in the world. This is an exciting opportunity, and COBINHOOD is benefiting massively from Tony’s experience and knowledge.
Yaniv: It sounds like you’ve really got a team behind you and with your entrepreneurial history, looks like it’s a winning team! You touched on this a bit before, and you mentioned that cryptocurrency trading had many issues because you, yourself, are a day trader. Look, dozens, if not hundreds potentially active cryptocurrency exchanges currently operating, where do they all fall short?
Popo: The current cryptocurrency exchange platforms are deeply flawed. First, the high fees — the top 30 cryptocurrency exchanges on average charge a 0.2 percent fee for both makers and takers, which can significantly reduce profit margins of traders.
Second, the unexpected downtime — current platforms are prone to shut down without warning. In 2014, Mt.Gox encountered serious technical failures, resulting in trading halts. The value of Bitcoin plummeted from 260 USD to 110 USD. This May, Kraken shut down three times in a single day!
Third, the asset security issue — Cryptocurrency trading platforms hold a large number of cryptocurrency deposits, making them attractive and obvious targets of hackers. In 2014, Mt. Gox was breached and lost about 650K Bitcoin; in August 2016, Bitfinex was also hacked and lost 120K Bitcoin.
Moreover, COBINHOOD is not just an exchange but also featuring comprehensive financial instruments; we will be the premier crypto financial center of the future.
Yaniv: You got lofty goals and a strong team behind you what exactly are you guys doing differently? We’ll talk about zero trading fees, but you talked about security breaches and other issues. What’s the difference? What is COBINHOOD doing differently?
Popo: We aim to build a cryptocurrency service platform for the blockchain era. Our first service will be a zero trading fee exchange. And only COBINHOOD is able to process millions of orders per second and high-frequency trading on crypto assets. COBINHOOD provides the best quality of service among all competitors and will allow multiple FIAT currencies to be traded on the COBINHOOD exchange platform in the near future.
Moreover, COBINHOOD provides ICO underwriting service. It is more like a consulting service, which aims to help traditional companies migrate from current centralized application paradigm to the decentralized future. The ICO tokens underwritten by us will be immediately tradable on COBINHOOD’s exchange, solving the liquidity issue.
COBINHOOD will launch more financial products and services in the future, for example, crypto assets trading with stocks, commodity, market indexes, and futures. In addition, COBINHOOD will also launch cryptocurrency wallet and retail payment services.
Also, we are going to live in a world of the “Internet of Chains.” The inter-operative protocol between different blockchains is the future. COBINHOOD is working on such a protocol to allow all inter-chain transactions to achieve an instant settlement.
We are not just an exchange platform for the blockchain, think of us the crypto Wall Street. A blockchain we’re building has multiple different applications on top of it.
Yaniv: Looks look COBINHOOD is looking to become a genuine financial services company rather than just an exchange. It’s a novel approach, and we’re looking forward to seeing what happens. Now I just want to talk a bit more about zero trading fees. How can you offer them? And how does COBINHOOD actually make money? You are an entrepreneur after all, and you’ve made loads of money in your time. Surely, you wouldn’t be building something without the goal of making money.
Popo: We provide margin trading loans up to 10x leverage. And the loans will be subject to interest rates. Furthermore, in the near future, we will provide ICO underwriting service, and we will charge a certain percentage of the tokens underwritten by us.
Yaniv: It’s an opportunity for you guys to offer the regular trader on the street, possibly the best trading environment, without making it cripplingly expensive to trade. You also mentioned before about the liquidity issue and having a solution from that through your token. Your ICO has been live for over a month now. How’s it been going?
Popo: So far, COBINHOOD has raised 20M USD equivalent ETH. We are not doing ICO for fundraising as we have sufficient funds for building an amazing cryptocurrency platform. COB is a utility token. COBINHOOD will launch its very first service — a zero trading fee cryptocurrency exchange — in November, and COB tokens will be immediately tradable on the exchange.
Yaniv: It’s clear that these COBs, these new coins are going to be integral to COBINHOOD’s success. Can you expand on just how important the issue of these tokens are to making sure COBINHOOD reaches the places you want it to reach?
Popo: The COB token is utility token, it will be immediately tradable on the exchange, and it plays an important role in the COBINHOOD economic system. We are offering several privileges to COB holders, including 50% off on margin trading loan interest when used on the COBINHOOD exchange. Another privilege is that ICO participants can get ICO tokens underwritten by us at a lower rate.
COBINHOOD aims to build a cryptocurrency ecosystem, and we will launch more financial products and services in the future, for example, crypto assets trading with stocks and commodity like I said before. In addition, COBINHOOD will also launch a cryptocurrency wallet and retail payment services. More and more privileges for COB token holders will be announced in the near future.
Yaniv: It sounds like you got a lot of work ahead of you. But in the immediate future, there’s a roadmap, there’s a plan, and you’re going to finish your ICO then head to mark and start again. What is the five-year plan for COBINHOOD?
Popo: Our ICO will be closed on Oct. 22. We have definite short-term plans, and our long-term plans are evolving and boundless because of the rapidly changing nature of this industry. Currently, we are working on our first service — the zero trading fee cryptocurrency exchange and we scheduled to launch it in November.
In December, we target to launch margin trading, margin funding, and FIAT support; we are proactively communicating with local banks for this milestone. Lots of ICO projects came to us for the details of our upcoming service — the ICO underwriting service — and we have started discussing and planning, ICO underwriting service will be officially launched in 2018.
Currently, the exchange is a centralized platform which can process millions of orders per second for every trading pair and under sub-millisecond latency. Moving forward, a decentralized exchange will be live; we target to launch this new platform in the second quarter next year.
COBINHOOD will launch more financial derivatives and services in the future, for example, crypto assets trading with stocks, commodity, and futures. In addition, COBINHOOD will also launch cryptocurrency wallet and retail payment service.
Also, all the FIAT-based banking system will migrate to crypto-based, corporate and consumer finance are all anticipated.
Yaniv: It looks like it already fits into your goal of genuinely being a financial services company rather than just a cryptocurrency exchange and we’d love to see the progress of COBINHOOD over the next few years. At Investing.com, we’ve talked to a number of top visionaries in the cryptocurrency and blockchain world. We’ve published different articles and interviews. I would love to hear from you — where is all this heading? What is your vision for a blockchain-based future economy?
Popo: We have faith in the cryptocurrency and blockchain technology, and we aim to shape the future economy through cryptocurrency.
Cryptocurrency is a comparatively new idea to the general public but as you can see Bitcoin was officially recognized by the Japanese and Australian governments. Meanwhile, Japan issued J-COIN, the U.S. has its Tether (USDT), and SwissCoin is available in six banks in Switzerland. The trend is unstoppable, and the world economy is gradually migrating from FIAT-based to cryptocurrency.
The crypto assets banking system is highly anticipated. We will have interest earnings for crypto bank deposits like in the FIAT banking system.
We believe that in the near future, you can easily buy a Coke by COB or other cryptocurrencies in a convenience store. I believe that cryptocurrency will replace physical, legal tender like bills and coins in the future. All FIATs will transfer to cryptocurrency. Maybe we will have TWDT or EUROT, too.
Yaniv: We look forward to seeing just what part COBINHOOD plays in that future economy. It sounds like you’re off to a really good start. From what you said, you’ve got, I think three days left of the ICO, so I would urge everyone to check out COBINHOOD.com in the link below. Also, there’s a link to learn more about COBINHOOD on investing.com, you’ll be able to find more information there. Get involved. Check out the ICO, and we look forward to hearing again from you soon, Popo, to get an update and see how everything went and then we’ll definitely keep in touch. Look out for more news on investing.com about COBINHOOD!
I hope you have a great rest of your day and we’ll speak to you soon.
Popo: Thank you, everyone, I appreciate your time for this interview!