Digitex - the Revolutionary Futures Trading Platform

Cryptocurrencies are known for their high volatility and it contributes to its quick adoption in today's digital world. As each day goes by, new and newer innovations in the crypto trading space keep popping up with all aiming to eliminate gradually, the shortcomings in this industry.

Basically, there are two ways of trading cryptocurrencies; the "Spot" and "Derivatives" Trading. Spot Trading involves the buying and selling of the cash market, that is, acquiring cryptocurrency with cash. While Derivative trading which was later introduced by ICBIT in 2011 allows traders to acquire digital coins with a financial entity that derives its value from another underlying asset. A common example is Future contracts as seen in the crypto space, which involves the speculating on the future price of a cryptocurrency whereby if the prediction goes right, the trader profits and vice versa.

BitMex, launched in 2014, become one of the very first derivative exchange platforms and currently a leading future contracts crypto trading platform. Today, BitMex trades $5 billion in daily activity from its increasing customer base showing us how big the industry is becoming.

However, one major concern and a significant hindrance to traders' profit maximization in this crypto space is the high transaction fees charged by trading platforms per order. The commission piles up - leaving a significant change in traders' Return on Investment (ROI).

Additionally, BitMex (and other existing alternatives) operates in a trust-based nature. They do hold traders' investment funds hostage in form of an initial margin fee that allows them to use the trading platform. This leave traders to trust them blindly as they continue using the platform hoping their funds isn't compromised.

The Optimal Solution - Digitex

Digitex is a decentralized commision-free futures exchange platform that operates on a revolutionary token issuance model. It allows placing of free futures trading orders by running the platform and its transactions in terms of its native token - DGTX whose demand and market growth will keep the project running its "comission-free" service.

Digitex, which will be launched officially in the fourth quarter of 2018, has come with a formulated solution to the issues that has plagued the existing platforms to emerge as a trustless and commission free exchange platform.

How is this possible, right?

Every sane business-inclined individual would question the idea behind a "commision-free" platform like the one ran by Digitex. But with the adoption of the revolutionary token issuance model, Digitex is able to scale through.

This token issuance model involves the elimination of transaction fees on a derivative exchange by the creation of an Ethereum based token, called the DGTX token. This token is used as the native currency of the exchange platform. So, instead of charging transaction fees on exchange, Digitex generates its funds from increased demand of a limited supply of the native token.

Basically, every active users or intending users of the Digitex must own the DGTX token to qualify for the "commission-free" privileges. This leads to higher demand for the token. Digitex, at the receiving end, respond to these high demands, by creating only a limited amount of the token - enough to cover the whole operational costs of the platform, to be competitively shared amongst the interested traders. Since all losses, profits and the initial margins generated on the platform are in the terms of the DGTX tokens, the circulation and demands for the token becomes and remains a must.

^{Source: Digitex Blog}

Also a Trustless Platform? Yes!

In terms of traders' investment funds' security, Digitex has developed a trustless exchange platform that is constructed with an Ethereum Smart Contract ensuring that traders' investment funds are never held hostage but rather kept safe through the power of decentralization on an Ethereum Blockchain based wallet thus making users' funds completely immutable!

How is Digitex better than the existing platforms like BitMex and others in terms of trading fees, ROI and ease of trading?

The highlight of this platform is its enticing commision-free nature. The existing platform may appear to charge some insignificant looking percentages like 0.075% on BitMex and 0.08% on CryptoFacilities. But on a long run, these charges eat up into the return on investment of a trader. Additionally, these fees are charged on the buy side and the sell side leaving traders doubled-charged. While they do this, Digitex on the other hand does this for free!

Other than these double charges, these platforms offer their service at a high and fluctuating initial margin cost. This initial margin cost is proportional to the weight of the futures ordered leaving traders to deal with a bigger commission on high orders. Whereas, on the Digitex platform, a constant initial margin fee is defined for each of its proposed operating three futures contracts; BTC/USD, ETH/USD & LTC/USD.

The presence of large tick size on transaction is another highlight of the Digitex trading platform. Tick size, defined as the minimum price fluctuation of a specific contract and is a big financial instrument. The larger the tick size, the more the price stability and trading liquidity. Digitex operates a Bitcoin contract at a $5 tick size compared to BitMex's $0.50 tick size which is a 900% difference and would increase the ROI relatively.

The Digitex Exchange platform, replaces the huddle of having to endure a flurry of mouse clicks and keyboards strokes before placing an order as exhibited on existing platforms. They will operate an Intuitive Ladder Interface. With this, the transaction is done in a single click interface showing and updating trading prices in real-time. This doesn't only increase profit maximization but also enable easy usage by crypto noobs and less tech-savvy users.

The presence of complete privacy, offered by the blockchain technology, the existence of automatic margin makers, and also the elimination of the unfavorable Auto Deleveraging technique offered by the existing exchange combinely makes the Digitex exchange platform a better platform.

Digitex's edge in Profit Making

Mike, a BTC trader noticed a rising trend and decides to buy 200 BTC/USD future offered at $4,280 on Digitex. Few seconds later, the price grew to $4290 and he made a selling order. For a tick size of $5, Mike will make a profit of (4290-4280)/5 = 2 ticks on a 200 contract position which is a 200 x 2 = 400 tick profit. Since, 1 tick = 1 DGTX, Mike makes 400 DGTX. At $0.1/DGTX, Mike will make a profit of 400 x 0.1 = $40. The required initial margin for BTC on Digitex is 20 DGTX. Hence, Mike only need to have 20 x 200 = 4000 DGTX ($400) in his account balance to earn the cummulative profit of $40 at zero transaction fee.

If Mike buys a 4 BTC worth of future contract at $4,280 and make a $40 profit at $4290, BitMex will charge (0.075% x 4 x 4280) = $12.84 and (0.075% x 4 x 4290) = $12.87 on his purchase and sale respectively. Thus, a total $25.71 transcation fee is charged leaving Mike with only a $14.27 cummulative profit.

Use Cases of Digitex

Case One

Dan just got introduced to the futures trading space. So far, he has learnt the trade so well that he makes a significant profit on his trade. However, the commission charged on his exchanges keep cutting down his gains. Being inquisitive, he entered the word combination "commission free futures trading" on the web and voila! he found Digitex - the commision-free exchange platform. Since then, he has been trading without being charged commision on his transactions.

Case Two

Lee and Fabian are two futures traders meeting physically for the first time. While gisting about their experiences, Lee sadly narrated how he lost his winning position on a futures trading platform because his counterparty was highly leveraged and the platform had to do auto deleveraging to avoid shouldering the trading loss. Fabian who enjoys the "no auto deleveraging" benefits on Digitex was more than proud to introduced Lee to their services. From then on, Lee has been on a rollercoaster enjoying sublime gains on his precise predictions.

What does the future holds for Digitex?

The token issuance model system ran by Digitex promises exponential growth of the platform. With the commision-free incentive drawing in more users, followed by the higher demand of the DGTX token, the price of the token will see continuous increment proportionately to this users' growth. Thus, more and more revenue generation through this means will keep the Digitex project thriving and expanding.

^{Image showcasing the projected growth of the DGTX token with increasing users. [Source: Digitex White Paper, Pg 8]}

The Decentralized Governance by Blockchain (DGBB) which is operated by Digitex will also keep its survival game high as more users will become active to know about every update and be present when the voting period for new token issuance by owners is announced - keeping the platform continuously alive and growing.

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