What is Digitex?
A commission-free, trustless futures exchange for trading digital currency prices…
What does ‘trustless’ mean?
Trustless means, that there is no need for a trusted party to confirm that data is real. This is done by special software that uses cryptography. Smart contracts are trustless by nature. No party is required to trust another party to complete a transaction. Instead, every party interacts with the same smart contract that contains an agreed upon set of rules in the form of code, that will run without the possibility of any third party manipulation.
What is ‘futures’ trading?
A futures contract is an agreement between two parties – a buyer and a seller – to buy or sell an asset at a specified future date and price. Futures contracts are either cash settled or physically delivered. Futures contracts that are physically delivered require the holder to either produce the commodity or take delivery from the exchange. Futures contracts that are cash settled are not deliverable and a simple debit or credit is issued when the contract expires.
What the Digitex Token is and what is used for?
The Digitex Futures Exchange has its own native cryptocurrency, called the DGTX token. The tick value of each Digitex futures market is 1 DGTX token, meaning that all trading profits and losses are denominated in DGTX tokens. Margin requirements are payable in DGTX tokens and traders account balances, deposits and withdrawals are denominated in DGTX tokens. Therefore, traders must own DGTX tokens to trade on Digitex’s commission-free, trustless futures markets, which creates demand for the DGTX token.At the heart of the Digitex Futures Exchange is its protocol token, the DGTX token.
Why does the Digitex Futures Exchange need its own native cryptocurrency?
By creating its own native cryptocurrency that traders must own in order to trade, the exchange is able to eliminate all transaction fees on trades by creating a small number of new tokens each year. Replacing the traditional transaction fee model with a token issuance model covers the costs of operating the exchange without penalizing the most active traders. This creates highly liquid markets by encouraging high volume, short term scalping strategies that are not viable on other futures exchanges due to commissions.
Where is my trading account balance held and by whom?
When the Digitex Futures Exchange is launched, account balances of traders will be held by a decentralized, independent smart contract on the Ethereum blockchain, not by the exchange. The exchange will communicate with the smart contract to inform it of your profits and losses that affect your available balance, but the exchange will never have physical custody of your funds. Apart from informing the smart contract of your trading performance, the exchange has no control over your funds and therefore cannot withhold, lose or mismanage your funds. If the exchange is hacked there are no private keys for the hackers to steal because the exchange does not have physical possession of your money, meaning that your funds are safe.
Are there any trading fees or other hidden costs of any kind?
No. There are no transaction fees or funding fees or spreads or any other kind of fees associated with buying and selling futures contracts on the Digitex Futures Exchange.
How can the Digitex Futures Exchange cover operating costs without charging transaction fees?
The Digitex Futures Exchange has replaced the traditional model of charging transaction fees on trades with a revolutionary new token issuance model. Because traders must own DGTX tokens to cover their margin requirements to trade, this creates demand for tokens by traders who are attracted to commission-free, liquid futures markets. This demand for tokens allows the exchange to create a small number of new tokens each month/year without adversely affecting the token price, similar to how other cryptocurrencies create tokens to reward miners. The sale of these new tokens to traders generates revenue that is used to cover the costs of operating the exchange.
Who decides how many tokens are created in the future?
The rate of new token issuance will be legally governed by all DGTX token owners through Decentralized Governance by Blockchain.
When does Digitex start creating new DGTX tokens?
No new DGTX tokens will be created for the purpose of covering the operational costs of the exchange until at least Q1 2021. This is because the proceeds of the ICO which takes place in January 2018 will be sufficient to cover the operational costs of running the exchange for at least 2 years.
During this 2 year period it is likely that thousands of new traders will be attracted to the commission-free, liquid markets on the Digitex Futures Exchange. This will create increased demand for DGTX tokens because traders must own them to participate. Increased demand for DGTX tokens will drive up their price. The higher the price of DGTX tokens, the fewer new tokens must be created to cover costs when new token issuance finally starts.
What technology is the Digitex Futures Exchange built with?
The Digitex Futures Exchange platform is built on the Erlang/OTP stack. This is the same technology that powers WhatsApp, and is known for its ability to handle huge numbers of concurrent users with ultra low latency. All price data is streamed in real time through websockets directly to the client’s browser with no downloads necessary. The current prototype’s trade matching engine is matching trades in less than one millisecond, but we are continuing to optimize this to achieve even higher trade matching speeds.
What are the Digitex market makers?
The Digitex market makers are automated trading robots that are programmed to break even. Their purpose is to provide liquidity on Digitex futures markets and to keep bid/offer spreads tight. They have a large trading bank of 200M DGTX, which is 20% of the total supply of DGTX tokens.
What is the current total supply of Digitex Tokens?
Total supply is 1 billion DGTX Tokens.
How do I get Digitex Tokens?
• Tokens were available to purchase direct from our smart contract on Jan 15th and Feb 15th. We are not selling any more tokens. If some do become available, we will make an announcement. In the near future, the DGTX token will be listed on an exchange. You will be able to buy and sell tokens there.
• Note that we cannot take responsibility for any private trades that go on, however if you have been scammed, let us know and we will investigate the matter. There will be little we can do to get your money back, but we may be able to identify the person and blacklist them.
When is Digitex planning to list on external exchanges?
Digitex will be listed on external exchanges in Q2 2018
What is the planned launch date for the Digitex Futures Exchange to go live?
The planned launch of the Digitex Futures Exchange is in Q4 2018.