Does the crypto space need commission-free trading? Considering the evolving ecosystem of cryptos, especially in the world of trading, zero trading fees could be argued to be long overdue. The way to mass adoption isn’t about following traditional business models or acting as the new middleman. There’s more to it than that.
Believe it or not, there are pros to having a cryptos futures market. Following conventional economic thought, it’s the next logical step. And the emergence of a futures market shows that crypto assets are maturing compared to traditional asset markets. But why does crypto need commission free? Keep reading to understand the benefits.
Shows a Maturing Market
Crypto fundamentalists may debate about hard assets and derivatives, but for cryptos to grow, the market size has to develop. Zero trading fees help to lower the financial barrier to entry for traders. This will encourage retail level traders to use the exchange. And that’s exactly what Digitex Futures is trying to bring to the market.
More traders lead to more transactions which are reflected in the market size growing. With enough volume at the retail level, the institutional traders will want to play too.
Also, you have to consider that Bitcoin’s market cap is currently only $58 billion which is about the net worth of Mark Zuckerberg. Moreover, Amazon and Apple are closer to the total USD in circulation than the total of all cryptocurrencies, currently at $202 billion.
So yes, there is still some way to go. Digitex providing commission-free trading is one way to help get the bigger wallets involved.
Make Money During the Bear Market
As most experienced traders know, you have more losing trades than winning trades. And then think about that during a near year-long bear market. For most traders 2018 has been rough, to say the least. However, experienced traders know how to manually trade and make profits even with the market going down.
Being able to short bitcoin is a way to gain profit in crypto futures contracts. For those unfamiliar, it basically means betting the price will go down. You can’t do that with the hard asset. And if short is correct, you get to keep all the profit because Digitex has no fee or commission expenses.
Brings Liquidity to the Market
What makes liquidity in a crypto exchange? The traders and the volume of transactions they create. But what brings traders to the exchange? Traders are attracted to the liquidity of the market. It’s a funny “chicken or egg” kind of thing.
However, more importantly, what keeps traders away from an exchange? Generally, traders are deterred by low trading volume, trading fees, and transaction fees. So how will Digitex get both the traders and the liquidity? You guessed it, through commission-free trading! And there’s something on the back-end to help.
The traders will come for the zero-trading fees but will stay because of the liquidity. This will be generated by the traders and automated market makers. Instead of worrying about whether someone will be on the other end to match the order, the AMM will even when another party doesn’t. They are trading bots capitalized with 200M DGTX and are programmed to break even.
Rent-Seeking Models Are Old
At this point, most of you have a growing question - how is Digitex Futures doing this? Well here’s the answer. The company is changing the model on how to generate revenue to fund the exchange. Digitex is using a token issuance revenue model.
Simply put, new tokens are issued periodically. The number of tokens minted is voted on by the Digitex community (token owners). Exchanges using rent-seeking models add no value to the trader. With Digitex, the traders will be able to decide how the exchange is funded. This being a big deal is more of an understatement.
In the long run, traders will be able to directly influence the exchange. No other exchange is even attempting to open up to its users at this level. Digitex is leading the way in the changing landscape.
Within the exchange eliminating trading fees will make traders more competitive. They’ll become more creative and aggressive with their trading methods. This will help to build liquidity as mentioned before. Bear or bull market, the more successful strategies will be made into templates used by less experienced traders.
This may sound like bravado, but exchanges like BitMEX need some new competition. We’re at the 10-year marker for cryptos, and it’s time for a change simply put. Some platforms have become complacent and are forgetting that traders chose to use them for varying reasons. Digitex will work to make commission-free trading a high priority for all.
Crypto needs a commission-free exchange because it’s about time something new was introduced into the trading space. It was only a natural evolution that trading cryptos would go from hard assets to derivatives. Digitex may not be the first in that particular space but it will lead the way in bringing zero-fee trading to the futures exchange market.
This will lower the barrier to entry for traders and help to garner the attention of those interested in trading, eventually leading to the market size growing and showcasing the maturity of the space. The competition fostered will help lead to mass adoption of cryptos whether through direct or indirect ownership of the hard asset.