Seizing the Futures Market

Estimated time to read: 6 minutes

Introduction

Digitex Futures is an ambitious project aspiring to provide traders with a fair and trustless platform to exchange futures contracts. On this platform, traders are encouraged to pursue high-volume short-term trades, as users won’t be deterred by commission or network fees as they engage with the Digitex Futures ecosystem. This means talented traders will be entitled to the whole of their profits without being restricted by any centralised authority. In other words, Digitex Futures is creating the market opportunity of every futures trader’s dreams.

The project has been long in the making. Selling out their ICO in 17 minutes and maintaining a strong marketing presence ever since, Digitex Futures tokens will be listing from Q2 and the actual exchange will be launched during Q4 of 2018. From there, and once the exchange launches, it’s hard to imagine there being a more attractive alternative within the cryptocurrency futures market.

Technology and Use-Case

The philosophy underpinning Digitex Futures is clean and simple.

By the end of the year, a commission-free cryptocurrency futures exchange will be operational and attracting users who can therein maximise their profit-margin by eliminating traditional expenses associated with other exchanges. Users can then hedge bets and profit from correct predictions on the future price movements of Bitcoin, Ethereum, and Litecoin, and while these are currently the only guaranteed tradeable crypto-assets, there have been allusions to the addition of further futures contracts after the exchange goes live.

Enjoying the Digitex Futures platform is dependent on possession of their native currency, the DGTX token, representing one ‘tick’ of incremental price movement in the futures contract. The DGTX token in an ERC-223 token, being a more modern Ethereum-based token which cannot be transferred to contracts which won’t allow the token to be released—adding an extra layer of idiotproof protection—while still being retrospectively compatible with ERC-20 software. For the average user, this means the likelihood of losing possession of tokens through human error has been substantially reduced. Further, the Digitex Futures entity will not have access to traders’ tokens or private keys, alleviating any fears of misconduct. Instead, DGTX account balances are held by a smart contract on the Ethereum blockchain, ensuring that a user’s funds cannot be frozen by the developers or stolen in the event of a hack to Digitex Futures’ company data.

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Of course, Digitex Futures weathers the loss of profits and maintenance fees by providing this commission-free and decentralised set-up. To recoup these losses, additional DGTX tokens will be minted and sold at various intervals, however, any token issuance events will need to be approved by DGTX holders through a democratic system of Decentralised Governance by Blockchain. While this naturally carries inflationary risks and places downward pressure on the value of the DGTX token, this shouldn’t be a deterrent to speculative investors in the event the platform is facilitating high amounts of trade volume, as the demand from thousands of traders would theoretically swallow the much smaller number of minted tokens. In other words, so long as the Digitex Platform is thriving, then inflationary concerns are a non-issue.

While futures trading means traders can hold cryptocurrencies such as Bitcoin and reduce the risk in their position by betting against short-term prices increases, there also needs to be consideration of the risk associated with the price volatility of the actual DGTX token. This is because prices movements of the DGTX token could adversely affect traders’ strategies. Thankfully, Digitex Futures have acknowledged this and implemented a ‘DGTX peg system’, where the DGTX sale price can be locked in without exchanging physical possession of the DGTX tokens. In periods of market uncertainty which might otherwise discourage futures trading, this feature will guarantee a sale price of the DGTX tokens at the same value as at the time of contract settlement. In this scenario, bets on the future value of DGTX are insteaded deposited in RSK (a 1-1 pegged Bitcoin sidechain) or Ethereum.

Overall, there is no reason to fault the technology or project strategy plan. While there’s little being proffered that breaks the mould of futures markets, what’s being proposed is a refined exchange model that has promising prospects of success. Of course, the fortunes of Digitex Futures is entirely dependent on the acceleration of cryptocurrency adoption and futures speculation, but if you’re already hedging bets on a successful blockchain revolution, then Digitex Futures seems sure to follow.

Our rating: ★★★★☆

Team

The depth of the talent pool behind Digitex Futures is still unclear and will benefit from active clarification and promotion as DGTX officially launches. That said, the most marketed and easiest member to cross-reference is CEO and founder Adam Todd, and it’s certainly to the project’s benefit.

While Todd’s employment history is dotted with ambiguous periods of travel and self-employment, there is an extensive history of involvement in cryptocurrency and developing commercial software programs. Most prominently, after a lengthy period of horse racing betting success with BetFair, Todd developed BetTrader, a betting and trading application which enhanced and streamlined the BetFair trading experience. The reliability of this software is evidenced by its continued popularity amongst BetFair traders today, where it is still managed by an active team. While this is but one milestone in Todd’s career, it demonstrates the market awareness and opportunistic mindset of the lead actor in Digitex Futures, and his intention to replicate past success in the currently booming cryptocurrency market.

Following this, information on team members in the software development sector are sorely lacking where the project website only showcases those responsible for marketing and business development. While the exchange itself will not be launching until much later this year, community perception will undoubtedly benefit from employee spotlights in the coming months. However, this shouldn’t be construed as a cause for concern, particularly where the blockchain start-up ecosystem is home to many successful products built by unassuming teams who compensate for a lack of notoriety with labour and vision. Fortunately, there have been various demonstrations of the Digitex Futures site, and as will be discussed below, the team have gone to tremendous effort to document the gradual fruition of the project.

As a final point, it should be noted that the entirety of the team’s allotted DGTX token are vested for a period of three years. In a market rife with fraud and dishonest conduct, it’s promising to see the team lock themselves off from personal profits in the short-term in an attempt to soften consumer anxiety.

Our rating: ★★★☆☆

Social

The Digitex Futures marketing strategy has been on point since announcing their ICO, which undoubtedly played a role in their lightning sale ICO. At the time of writing, their still-active Telegram houses 16,500 users, while their Instagram and Reddit pages are employed as announcement hubs to showcase their product.

Above all these, one of the biggest drivers of Digitex Futures marketing are the personable vlogs released sporadically and filmed spontaneously by CEO Adam Todd. These ad-libbed videos provide, as well as being hilariously candid, real-time insight into the progress and development of the Digitex Futures start-up, and have recorded the team’s reflections and relief in the aftermath of events such as the ICO, the ensuing Dutch Auction, and the relocation of offices to Dublin. This level of reassurance and accountability to early investors is second-to-none. In a context where market leaders frequently detach themselves from public scrutiny or are pioneered by CEOs who hide behind the weak armour of anonymity, Digitex Futures has set a high bar of professional (but personable) community management which other post-ICO blockchain projects should be scurrying to replicate.

Our rating: ★★★★★

Conclusion

Digitex Futures is perfectly simple. By the end of Q4, users will have an ideal option for commission-free trading on a highly liquid futures markets, and have the flexibility to use strategies not viable on other exchanges due to commission fees. With the multi-talented Adam Todd heading the project and an effective marketing strategy already deployed, Digitex Futures seems primed to capture the futures trading market by the close of 2018.

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