It is new, it is coming and it will be here to make life of the crypto trader a whole lot easier. How? By using blockchain technology to create an exchange of futures without trading fees. Furthermore, it operates with non-custodial account balances and more.
So what is it you get, when searching for Digitex Futures Exchange? You shall get to the trading platform where traders can buy and sell futures contracts on various cryptocurrencies, commodities and/or financial instruments. The activities of traders then determine balance changes of DGTX tokens.
To begin with DGTX trading of futures, one must have a balance of DGTX tokens to place trades. This fact then creates a demand for DGTX currency itself. The most significant difference between this and other trades is that there are absolutely no transaction fees on trades. This kind of trading shall attract highly active, super-short term contract traders who work on liquidizing markets, as a side product of using strategies not viable on exchanges that charge fees. The playing field between human traders and bots is then leveled by large tick sizes.
What will you need to start trading at this platform?
Join the Digitex airdrop here.
The DGTX Token
The DGTX token is the mandatory currency of the Digitex Futures Exchange. Furthermore, it is a part of the system as a whole, that allows trades to occur with zero fees.
The balance of your trading account is measured into the DGTX and traders change the balance status of DGTX tokens accounts in real time. This means that traders are obliged to own DGTX tokens to use the service, which should, in theory, create a rising demand for the cryptocurrency.
Issuance of tokens in a democratic way
Like everything else, even DGTX has its costs that need to be covered. Where does the money come from? In this case, it’s fairly simple.
The costs of all operations connected with the currency, e.g. maintenance, exchange fees, and development of the currency, is being covered by yearly „money printing“ event, called minting. During this time period, the community owning the currency shall decide where and how shall the currency develop in terms of costs. Then the currency shall be minted, created few extra coins, that shall be sold to the public. The profit of the sell shall cover the costs of the next year.
This system is designed to be self-sustaining for a very long time, perhaps indefinitely, without charging transaction fees on trades by the minting process. As mentioned above, it would be a small number of new DGTX tokens each year being added into the economy.
This issuance of new tokens then would be decided and handled democratically by all stakeholders. People, who would be interested in the DGTX activities would then be obliged to buy new tokens to proceed with their operations, thus naturally increasing further the demand for the tokens. And it would be this natural demand increase that would diminish the effect of the inflation on the token.
Whilst it’s true that any increase in DGTX supply will devalue the current price of DGTX, it is the owners of their tokens who shall decide about the inflation costs, new coins and progress of the DGTX market.
Why in the world would token owners willingly vote to increase the token supply and devaluation of their own tokens? Is it even real?
By voting to fund the commission-free platform they not only support the further development of the platform, which in final effect increases demand for the tokens. This demand, in combination with the platform development then causes that the inflation created by the increased supply to be eliminated and the tokens to have a higher value. In theory.
The DGTX saying:
„On one hand, DGTX owners want to minimize token issuance to protect the value of the current DGTX. But on the other hand, DGTX owners will accept a certain devaluation of their DGTX if that raises enough money to fund the Digitex Futures Exchange for another year, thus creating increased demand for DGTX from traders attracted to commission-free markets on a non-custodial exchange.“
Again, in theory. In reality, we are facing a plethora of effects that will come into play and would have to be closely monitored. Yet how, remains a mystery.
What is truly interesting, however, is that like any other central bank controlling its own currency through its monetary policy, the DGTX community will try collectively decide on the most appropriate monetary policy. There will be group errors, as every single individual will be acting on his or her best behalf, and reaching consensus may be impossible.
Furthermore, in the central banks there are boards of experts to dwindle in and analyze the effects of decisions, yet how many are there going to be in the crypto industry? Are they going to be able to find the right balance?
We can say almost for sure that first year or two the imbalances will be great, thus the investments will be riskier and potentially more profitable. But it could be also less profitable. If the coin persists through the long period of time, it can, occasionally, find its right balance, if its going to be the subjects with growing experience, deciding about its future, rather than every year new set of newcomers.
Also, will people learn how to manage the whole ecosystem of cryptocurrency? Until recently economists thought that the economies are made of rationally thinking and acting individuals.
Yet recently there started to appear opinions, that people could be rationally thinking, yet not acting, as they are influenced by the whole series of thoughts, events, and environment.
The founder of this theory, which he calls „Dumb stuff people do with money“ won last year Nobel Prize for his merits in the field of economics.
But how it will be years after the launch only time will tell.
Furthermore, this system combined with the sell should increase the demand for the currency, which shall balance the new cryptocurrency coins in the market.
Non-Custodial, Zero-Fee Futures Exchange
The model of exchange is a hybrid one combining the speed and reliability of a centralized order matching engine, with the security of decentralized account balances. The first time in history traders will be able to use the real-time futures trading in an instant, on-chain settlement, without the problematic delays, expenses and other disadvantages of purely decentralized exchanges.
When does it go live?
The Digitex platform will become available in its Beta version during January 2019, so pretty much now as of writing this article. Digitex announced the whole system at Malta, at the Malta BlockChain Summit, dated back at the beginning of November 2018.
Accounts with nothing to steal
Digitex currency Exchange utilizes the cutting edge blockchain technologies and it even moves the technology forward by the development of new principles and parts. It is currently using the best parts of the centralized and decentralized systems, creating a unique hybrid machine. People trading within this system can rely on the reliability of the system, real-time trading and more. This is thanks to the centralized order matching machine.
Furthermore, traders don’t have to trust the system with their money. Balances of their accounts are kept in an independent smart contract and the exchange is unable to withhold, mismanage, steal or lose customer‘s funds. This is thanks to the principle of the platform itself not having customer‘s private keys. This also makes Digitex less attractive to hackers because there are no client funds to steal.
But there is more to the DGTX than just safety of operations.
Unique Trading Interface
People trading with the DGTX interface face a system with orders on a single click. Doesn’t matter if they buy or sell, they submit orders in the intuitive ladder, which furthermore, displays live bids and offers moving up and down on a central price column.
Technology around the DTGX platform
The platform for the futures exchanging, DGTX was built with modern internet and security standards in mind. The company claims it used the best and most secure open source technologies for the best performance at every layer of the platform.
The code serves and runs in all modern popular web browsers. Furthermore, it runs in browserless environments such as a trading bot or a price data feed client script, as the DGTX presentation claims. The structure of the platform is divided into two main parts. The front end which is designed as a multi-level service with the event-driven intuitive user interface, and the back end which serves as blockchain integration. Furthermore, the platform uses the best and the fastest side-chain providers to secure the transactions.
Among those, we can find CloudFlare‘s Content Delivery Network, which works as the bandwidth of the servers spread around the world, the CF‘s firewall, and other range of tools and products for the network security.
As to the support to the CloudFlare’s services, there is also another event cache within the system which can update millions of data in close-to-real-time with events generated in the order matching system.
A good portion of the back end is dynamically scalable thanks to the technologies used. Among most prominent, there is AWS (Amazon Web Services) allowing auto-scaling as the business grows. Furthermore, account databases use a sharding model design allowing seamless expansion of the account performance as needs of the exchange platform grow.
As well as AWS services, the DGTX platform uses very new, super performing technology called Plasma Protocol.
Plasma core teams and DGTX are happy to announce their cooperation in the field. When Plasma is fully integrated into the Digitex Futures Exchange, the people will be able to place real-time, on-chain trades that are instantly recorded on a fully verifiable Ethereum side-chain.
The Digitex Futures Exchange is one of the first projects to implement the Plasma Protocol. What is it? The Plasma protocol is the scaling solution firstly mentioned by Vitalik Buterin and Joseph Poon in their study. Working in close ties with the Ethereum Foundation, the DGTX managed to handle 25,000 transactions per second, which is 1500x faster than the Ethereum main chain, and that is already something.
How Does Plasma Work?
The Protocol Plasma works in a way that it doesn’t really deposit the DGTX into the trading account, but instead to the smart contract account created directly for this purpose. This smart contract then shall keep the money, and the DGTX platform itself doesn’t have rights, either keys of transactions. Thus hacking the platform doesn’t really help hackers in „stealing“ the funds, since there are none.
The contract then behaves according to rules set by all interested parties. The contract is then unable to be edited or switched off, or tampered with in any other way as long as the Ethereum Blockchain is still active.
This smart contract then communicates with our Plasma side-chain and tells it how much credit each trader has. All the transactions are then processed into the blocks, and then they are batched and sent to the Ethereum main-chain from the DGTX side-chain. There are several batches send every second, creating the communication channel up to 1500x times faster than original Ethereum chain.
And as important as speed, here comes the security as well. However the side chain runs on DGTX node, the system as a whole is trustless and verifiable, as the platform itself doesn’t have customer‘s trading keys.
Furthermore, everyone can scan and monitor fraudulent or malicious transactions alongside the already present measures to prevent such actions. If the independent smart contract’s fraud checker verifies a malicious transaction, all funds are automatically moved from the side-chain onto the Ethereum main-chain.
This means that the user keeps control of the DGTX tokens he/she used for the transaction and doesn’t have to trust the Exchange platform. Then the final balance, profits or losses, are updated on the sidechain (DGTX platform) in near-to-real-time due to not hitting the main chain. This saves not only time but also additional time-related costs.
Join the Digitex airdrop here.