The Digitex Futures Exchange (DFE) is the initial product of Digitex, an early-stage start-up that is rapidly developing a complete product portfolio. The recent whitepaper revision has outlined Digitex’s roadmap regarding its product developments. In this, Digitex has presented a revised business model that utilizes its unique competitive advantage to diversify its use case into a multitude of industries.
This unique offering is a zero-commission platform for industries that are typically built on user fees. The paper introduces Digitex City, at the heart of which is its stablecoin DUSD. With the introduction of DUSD, the use cases and potential applications of Digitex’s original business model have expanded such that it will soon pertain to many industries that are designed to profit from user fees. In doing so, the demand for the DGTX token will rise with the launch and growth of each of Digitex Cities divisions.
In this post, we will look at the next pending product launches with a particular focus on DUSD and how the introduction of both Spot and Forex markets will be game-changing for Digitex.
The Digitex Futures Exchange is currently up and running with two futures markets live on mainnet: Bitcoin and Ether. The current platform denominated in DGTX has shown that DGTX volatility is proving to be a barrier to new users adopting the futures-only exchange. The pending introduction of both the DUSD coin, whose value is pegged at $1 USD and spot markets will remove this impedance from users joining the Digitex platform.
By changing the base currency to a stablecoin, users will not be subject to DGTX volatility in their trading account or wallet balances. DUSD also removes user confusion in the value of the underlying mechanics of the Digitex Exchange, as contract value, profit and loss, volume, margin, and other metrics will all be denominated in DUSD rather than DGTX, making it a more approachable user experience.
Simply, DUSD is easy to understand, familiar, and secure.
The Spot market introduction creates a one-stop-shop for users. Digitex’s most successful competition in the cryptocurrency exchange market currently offer a comprehensive spot market that allows users to operate within a single platform if so desired. Buying and selling multiple cryptocurrencies in a single location is a must for many traders.
Convenience is key and a big contributor to both the value add and competitive advantage of products in any market. Being able to operate solely in a single marketplace with zero-fees and then store profits in a stable DUSD will be a game-changer for the Digitex Exchange in the coming months.
A snapshot of daily volume figures shows the overall interest in the most popular spot markets in comparison to derivatives. This gives an indication of the overall market size for some of the most popular cryptocurrencies and highlights that the incorporation of spot markets to the Digitex Exchange will bring with it further utility, and therefore, demand for the DGTX token. Even if only the current users of the Digitex Exchange transition their buying routine to Digitex, it will result in growth for Digitex.
Introducing the Foreign Exchange markets (FOREX) to the Digitex Exchange is going to be another huge move for this platform.
The beauty of the Forex market is that it is a borderless and virtual marketplace making it the most logical product for the Digitex Exchange to implement as a follow up to the cryptocurrency spot exchange. The Forex industry is a virtual, internet-driven marketplace and as such, forex traders are familiar with operating on platforms similar to the Digitex Exchange (with the exception of zero-fee trading).
The forex market is the biggest in the world where average daily turnover is measured in trillions per day. To emphasize that point – trillions per day. The Bank for International Settlements’ reports show that the Forex market is growing where OTC foreign exchange turnover rose from $5.1 Trillion in 2016 to $6.6 Trillion in 2019.
However, the forex market is split into Institutional and Retail traders where institutional traders represent 90% of the transactions. This means that the individual traders only control one-tenth of the market.
The imbalance of power results in the market direction being driven by institutional investors. The system is not designed to be influenced by retail traders and is therefore weighed in favor of institutions.
This offset in market power is relevant to Digitex for two key reasons:
- The target market of the Digitex Exchange is the individual or retail traders in the forex market who account for roughly $660 Billion in daily transactions (10%).
- These traders are currently operating in an uneven playing field where spread costs and commissions are eating away at profits.
Knowing the market size of the retail investors in Forex is important for us as it gives an indication of the global interest in these trading pairs. At an estimated $660 Billion in daily retail trader transactions, the forex potential for the Digitex Exchange is huge. Utilizing DUSD and a no-house edge platform to bring traders to the Digitex Platform, Digitex can develop to be a highly liquid forex marketplace.
This entire market will only be possible for Digitex because of the introduction of the DUSD. With a stable DUSD, Forex traders will have a lot less resistance to adopt the exchange in return for no house edge. The reason for this is because the biggest currency trading pairs in traditional forex markets are all a USD pair.
The below graph published in BIS Triennial Central Bank Survey shows a breakdown of the forex market. The left bars portray each currencies’ turnover as a percentage on a net-net basis while the right side displays the specific trading pairs and their corresponding trading percentages. This shows us that the lion’s share of forex interest is transacted in USD. As such, DUSD lends itself to be utilized to great effect on the Digitex platform, a platform with a greater competitive advantage for retail traders than traditional exchanges.
While both the spot market introduction and forex clearly offer a huge potential upside for Digitex, the benefits of DUSD reach further in creating new avenues of potential revenue. With the evolution into Digitex City, the DGTX token will find utility across multiple additional business models in gambling, education, and entertainment to name just a few.
As an example, advertisements within the entirety of the Digitex City platform will be paid for using DUSD. The benefit of this is an increase in demand for the DGTX token while also creating an additional and sustainable revenue stream for Digitex, some of which could be distributed in the form of staking rewards if the teams see fit.
By expanding its horizons to other industries, Digitex will uniquely offer a symbiotic relationship between platform and user, building a next-generation platform that is genuinely win-win.