DIGITEX: An Innovative Revolution of the Trade of Futures

in #originalworks • 6 years ago (edited)

Introduction and Problem Statement

The volatility of bitcoin and indeed all things Cryptocurrency is of great concern. While volatile movements take away the attractiveness of any asset, bitcoin inclusive, a certain amount of swings in prices create trading opportunities which can be taken advantage of for the ultimate end of profit. Thus many traders and speculators buy digital currencies like bitcoin and aim to sell at a profit through an exchange.

Futures contracts are used to hedge positions and reduce risks of the unknown by looking to stabilize the otherwise inherent volatile characteristic of cryptocurrencies while trying to gain profit in the process. Futures Exchanges therefore play a crucial role in the trade of futures, however the present state and organization of futures exchanges is highly far from ideal as itemized in the following:

Killer Transaction Fees

As currently obtainable, Futures Exchanges need to keep running, they need revenue for maintenance the overall maintenance of their platforms. And to achieve this, their full wrath in terms of ridiculous transaction fees are turned unto traders. Thus traders who should ordinarily gain in their trade of futures are turned to hopeless losers after commissions in terms of transaction fees are deducted.

Insecurity of Trader Funds

Exchanges currently have control over trader funds. A situation which makes them frequently face the brute force of cyber attacks aimed at illegally gaining control of or stealing such funds. Instances abound where such hacks have led to loss of huge sums, the famous Mt. Gox case always being a handy illustration. Furthermore the power over or control of funds by exchanges also bring about possibilities of mismanagement of funds. All situations that are really not in the interest, nor can they promote the good of traders.

However, like Dean Kamen said:

Every once in a while, a new technology, an old problem, and a big idea turn into an innovation.

Let's then talk about the disruptive, innovative, big idea poised to rebrand the trade of Futures. Let's talk about Digitex

Welcome to the Blockchain Driven Revolution of Futures: Welcome to Digitex

The Digitex exchange is an innovation that sets out to eliminate the flaws of the present and usher the trader and indeed all stakeholders in the ecosystem of Futures trading into the future, into the uncharted world of perfection. Digitex eliminates crippling commission fees which have been a problem for far too long and rather introduces the covering of operational costs by the minting of its native currency rather than pushing these costs unto users in the form of transaction fees as presently obtainable. Digitex also eliminates centralized account balances which are all too insecure but rather introduces an unrivalled hybrid of a centralized matching model and decentralized account balances which ensures traders enjoy for the first time ever the speeds of off chain price discovery and the security of blockchain account settlement. Yummy!!


Exploring Digitex1.0: Commission Free Futures Trading

Now let's get things straight. Transaction and commission fees are annoying and work against profit. If there was one wish any trader has, it's the total removal of commission fees. This seemingly unrealistic dream is now reality thanks to Digitex.

Digitex has created an ERC-223 compatible protocol token on the Ethereum blockchain called the DGTX token. It stands at the center of all activities in the Digitex ecosystem and enables functionality. All profits, losses, margin requirements and account balances are denominated in the DGTX token.

Thus by the creation of new DGTX tokens, costs of running Digitex are covered effectively and so makes for the total elimination of transaction fees which hitherto have so hindered free trading and the gain of profits, an accomplishment of the Utopian dream of futures traders. Inflationary effects of creating new tokens it is worthy of note are efficiently curtailed by the demand for DGTX tokens which traders must possess in order to use the Digitex platform.

The elimination of transaction fees would sure open the floodgates of futures trading unto traders who were hitherto locked out of trading simply for the fear of losing.


2.0. Top Notch Security of a Hybrid: Trustless Futures Trading through Digitex.

Traders currently have to trust exchanges with their money, a situation which is highly risky and may lead to mismanagement or even loss through theft. However, by replacing centralized account balances with an independent, decentralized smart contract on the Ethereum blockchain, Digitex ensures that traders use the Digitex futures exchange without having to trust it in the first place Trust may be betrayed so its better not to even trust in the first place, this idea is what had led Digitex to the idea of a Decentralized account balance.

Thus, while the blockchain remains great technology with inmense impacts and possibilities, the running of decentralized futures exchanges on the blockchain still pose great problems which just can not be ignored. Such problems of decentralized exchanges include;

  • Lack of of privacy

  • The expensive nature if on-chain transactions

  • Lack of realibility and the scalability issue

  • Latency in on-chain order books which prevents real-time trading

Be that as it may, a centralized matching engine and order book has some advantages over decentralized exchanges in terms of faster transactions allowing real time trading, scalability, the possibility of margin trades which guarantee profit and and privacy.

A hybrid of the centralized components and those of the decentralized is therefore absolutely peerless, what Digitex is! It is an intelligent combination of the speeds and reliability of centralized servers while also incorporating the trustless security of decentralized smart contracts. The Digitex Futures Exchange can therefore has no physical possession of trader funds but can only interact with the smart contract to update them.

Risk-Proof Trader Funds: The Decentralized Account Balance

The locking of funds in a smart contract on the Ethereum blockchain by Digitex provides absolute security and immunity from risks. Through a decentralized account balance, the following are achieved by Digitex;

(a) Digitex does not have access to trader funds and so cannot seize or freeze funds belonging to traders for whatever reason including pressure from authorities.

(b) Hence private keys are not held by Digitex, the theft of funds by hackers is virtually impossible and even in an unlikely event of a security breach, funds cannot be stolen because they are not kept on the platform.

(c) Trader funds can never be mismanaged by the exchange because they don't have to be trusted with the funds in the first place.


3.0 Welcome to the Future of Futures: Wecome to the Digitex Futures Exchange.

The Digitex futures Exchange is what any trader ever dreamed about. It facilitates the trustless trading of futures contracts at no costs in terms of transaction fees while guaranteeing the trustless security of a decentralized exchange and the speeds and reliability of centralized order book and matching engine. The Digitex Futures Exchange is therefore very much an unrivalled futures exchange with so many advantages and features aimed at the ultimate good of the trader. Some of these will be discussed hereunder:

  • Zero Trading Fees:

    • Digitex's innovative token issuance model totally removes the payment of payment fees on all trades, there are therefore, no commission fees of any kind on the Digitex futures exchange enabling traders submit their Taker Orders and Maker Orders at virtually no cost.

  • Automated Market Makers:

    • With the Digitex Futures Exchange, losses are almost impossible! Yeah they are! Digitex market makers have algorithms that are programmed to break through the instrumentality of automated trading bots. These also help create liquidity market futures, therefore incentivizing traders to enter and exit positions which ultimately lead to higher liquidity.

  • Blockchain Driven

    • Blockchain technology is a great revolutionary invention which redefines the way humans operated digitally, its uses being limitless. Digitex ultimately relies on the blockchain for its functionality. All what Digitex stands for, is, because the blockchain is, from the use of its own native cryptocurrency which eliminates transaction and commission fees to the safe storage if trader funds in an intelligent smart contract.

  • Ultra Fast Order Matching:

    • The Digitex Futures Exchange is built upon the Erlang/OTP stack which allows for real time updating capabilities and it's ability to effortlessly handle high level of transaction activities without latency or delays. The trading interface also updates prices in real time being web browser based. It is worthy of note that the same programming language has been used to build WhatsApp.

  • No Annoying KYC Verifications Guaranteeing Privacy

    • Digitex eliminates all forms of annoying, pointless and intrusive KYC verifications requiring users to submit data which puts such sensitive individual data at high risk of theft. Traders with the Digitex Futures Exchange can so simply begin trading without having to submit their names or any personal information at all. This guarantees privacy and makes users more comfortable.

  • An unbeatable Hybrid of Off-Chain Price Discovery and On-chain Settlement

    • The Digitex Futures Exchange combines the speeds of off-chain transactions and the trustless security of the blockchain who h makes it a hybrid without equals. The traders therefore enjoy the qualities of both worlds getting to experience experience the hitchless speeds of centralized matching order books and the unbeatable security of trustless trading.

  • Bitcoin, Ethereum and Litecoin Futures on the Digitex Exchange

    • The Digitex Exchange offers a futures market for Bitcoin, Ethereum and Litecoin which can be safely called the largest cryptocurrencies. Each of these markets have a large tick size eliminating noise and granting conveniences even in volatile market situations.

Trade of Bitcoin and Ethereum futures on the Digitex Futures Exchange is absolutely the best option available to any trader concerned about profits and the continuity of his trade. As would be shown below, other exchanges pale in comparison with the Digitex Futures Exchange in terms of profit (or loss) to be made by the trader.


BTC/USD Trade
As obviously seen above which is a comparison between the trade of bitcoin futures on the digitex futures exchange, cryptofacility and GDax, Digitex clearly tops the charts with a maximum profit of $200 while Cryptofacility may allow for meagre earning after commission fees. A GDax trader however would trade at a loss. Undesirable!


ETH/USD Trade
The above is a representation of the trade of Ethereum futures on Digitex, BitMex and Kraken, as always, the Digitex Exchange remains the best!


4.0 Effective Decision Making: Decentralized Governance through the Blockchain

The blockchain lies at the very foundations of the Digitex ecosystem. Digitex therefore uses the blockchain to govern the issue of new tokens democratically and efficiently through the instrumentality of rules and voting systems encoded into smart contracts. Decentralized governance is thus one of the greatest strengths of the Digitex ecosystem to watch out for. It is through this decentralized governance that new tokens would be created to cover the costs of operation of the Digitex exchange, however, users have the sole responsibility of voting for the creation of tokens in a manner that would prevent inflation and ensuring liquidity.

By entrusting governance into the hands of users who would naturally want to take actions for the best of their collective interest, Digitex can take giant strides forward.


5.0 Enabling Functionality: The Digitex Protocol Token (DGTX)

The DGTX token is indispensable to the functionality of the Digitex futures exchange. It is an ERC-223 compatible token on the Ethereum Blockchain and will be freely tradable on the Digitex exchange. It stands at the heart of and acts as the native currency of the Digitex futures Exchange hence even to buy and sell futures contracts, a trader must have a margin balance of DGTX tokens sufficient to cover his potential loss hence the tick value of all Digitex futures contract is 1 DGTX token necessitating the denomination of all profits and losses in the DGTX token.

However, no new DGTX tokens would be created for the first two years of the Digitex Futures Exchange's existence until 2021 when new tokens would be minted to continue covering the costs of operating Digitex.


The Use Cases

Case 1: Profits for Tom through Commission Free Trading

Tom has been trading futures for a few years. However, he barely makes profit from his trades all thanks to commission and transaction fees being charged him. He has been dejected and even stopped trading futures. However, with the Digitex futures exchange, Tom is up and trading futures once more and he is loving it because he is not being charged any fees and so his profit are always guaranteed.

Case 2: Ultimate Security of Funds

Harry had a fortune of $50,000 which he intended to invest in the trade of futures. But hell! Would you yourself put your life savings on an exchange where they will be at risk of theft through hacks? Hell no! And so Harry never did. But with the advent of Digitex, Harry is well ready to invest hence his funds would be well protected as they are not kept on the exchange where they'd be at risk but rather in an intelligent smart contract.

Conclusion

On the whole, it is pretty clear that Digitex with what it stands for was all the trade of futures ever needed to reach into its own future of perfection. With the combination of the speeds of off-chain price discovery and the trustless security of decentralized account balances, the future of Futures is indeed here, thanks to Digitex.


The RoadMap

The Team

For more information check out these sources:

My tweet: https://twitter.com/blezd_ben1/status/1042037744367804416

Digitext2018

Digitexttwitter

#futures #blockchain
6 years ago in #originalworks by
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     6 years ago 

    Coins mentioned in post:

    CoinPrice (USD)📉 24h📉 7d
    BTCBitcoin6293.202$-3.08%-1.07%
    DGTXDigitex Futures0.029$-8.22%-17.31%
    ETHEthereum197.933$-9.83%1.17%
    LTCLitecoin51.880$-8.64%-4.54%
    MKRMaker382.714$-6.84%13.59%
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       6 years ago 

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