EMX is an exchange that revolutionizes the global derivatives markets. EMX offers derivatives that give price exposure to underlying assets as varied as crude oil, gold, stock indices, or bitcoin. Traders have access to liquid, global capital markets without ever having to convert to fiat. Using an innovative, frequent auction-based matching engine, EMX dramatically lowers the cost of trading and helps ensure an equitable market for all traders.
Problems & Solutions
The majority of futures trading volume is concentrated on a few large exchanges around the world, such as the Chicago Mercantile Exchange Group (CME), the Intercontinental Exchange (ICE), and the Eurex Exchange. These large entities are the result of dramatic consolidation in the sector.
These large companies extract massive rent costs from their established markets. In the United States, futures exchanges are free to dictate where their products are cleared and may also own or control the clearing house. Market and network effects create a “winner take all” environment whereby participants have no choice but to migrate to the most liquid market. This often leads to a single dominant market for each type of futures contract. Additionally, with only a handful of exceptions, the products for one exchange have no counterpart in any others. For example, S&P 500 futures are only readily traded on CME, while cocoa futures reside solely on ICE. Liquidity, licensing agreements and strong network effects erect high barriers to entry. On a product by product basis, exchanges wield global monopolylike power.
Since futures liquidity is so concentrated yet global liquidity pools are distributed across various exchanges for different contracts around the world, it can be difficult for traders who wish to trade in multiple contract types to simply trade only on one platform -- and thus it is difficult to reap the potential benefits of cross-margining across contracts on a global basis.
The EMX exchange will include both traditional and cryptocurrency futures contracts. Futures on EMX should function largely the same as they do on traditional futures exchanges with a few exceptions. EMX will administer an auction-based matching model versus a central limit order book, and contract quantities traded may be fractional, while on traditional trading platforms, they are whole numbers.
The majority of their contracts will be highly correlated with existing products on liquid exchanges and EMX may utilize leading benchmarks as part of the settlement process for EMX settlements. The mechanics behind order matching and settlement are described in section 5.
Features & Highlights
- Contracts: EMX will list both crypto futures and traditional equity, commodity, and currency futures. Some of the initial contracts will include: BTC-USD, ETH-USD, LTC-USD, EMX Large Cap Crypto Index, US Equity Index, Gold. EMX system was built with scalability in mind and they will add additional contracts over time (crypto, equities, commodities, currencies, bonds, etc), in collaboration with their community and dictated by what traders around the world desire to trade.
- Platforms and Connectivity: They will launch a web-based trading platform with lightning-fast REST and WebSocket APIs. Additional enhancements will include: Mobile “responsive” web App, Native Android App, Native iOS App, Native Desktop Apps (Windows, OS X), FIX APIs.
- Language support: They will launch with English, Korean, Portuguese and Chinese language options in the trading application. Other languages (Japanese, Russian, etc) will be implemented over time.
- Fees and Revenue - Sources of revenue for EMX include:
- Exchange fee: Trading fees on a notional basis, instead of per contract basis.
- Withdrawal fee: EMX may charge a small withdrawal fee.
- Liquidation fee: Traders who are force liquidated due to insufficient margin will be charged a liquidation fee, which will be used to fund the guarantee fund.
- Other fees: New features of the EMX platform may charge fees (for example, lending).
Token Sale & Economics
Token Utility & Use Cases
The EMX Token is the all-in-one coin for the EMX platform. From leverage and access, to transaction fee discounts, the EMX Token gives multiple ways to help generate profit.
Collateral: Buy and sell both crypto-based futures and traditional markets on one platform with the EMX Token. Trade many kinds of cryptocurrency futures and swaps, including EMX US500 equity index, Bitcoin, and other tokens. Expand your portfolio with familiar worldwide financial and commodity markets, including equities, crude oil, gold, and more. All digital assets are kept securely on chain.
Fee Discounts: Use the EMX Token to pay for fees on your trades, and get more returns on your investments. Receive up to 50% additional in discounts, simply by paying with the EMX Token.
Staking: Lend your EMX tokens to the EMX Insurance Fund. Every two weeks, 10% of net gains in the insurance fund will be paid out to holders who have kept their tokens on EMX.
Rewards: Earn more in trading competitions when you hold the EMX Token. Gain access to premium features on the exchange, and unlock higher leverage.
Voting: Vote on new features and products, and help prioritize the EMX roadmap by being a holder of the EMX Token.
Roadmap & Updates
- April 2017
- Q2 2018
- Seed round completed with investors, including #Hashed, top Korean VC.
- Development began.
- Q4 2018
- Private Beta Launch.
- Team expands to 9 full-time employees, 6 contractors.
- Q1 2019
- Strategic equity investments from Bain Capital Ventures and Jaan Tallinn (co-founder of Skype).
- Exchange registration in Bulgaria.
- Internal Market Maker goes online.
- Q2 2019
- MVP Launch
- Bitcoin, Equity and Gold Perpetual Swaps Launch
- Testnet Trading Competition
- External Market Maker recruitment
- Q3 2019
- Spot Trading Launch
- EMX Token Launch
- Forex perpetual swaps launch
- Additional altcoinl contracts on the exchange
- Insurance fund staking
- Altcoin collateral
- Additional commodity contracts on the exchange
- Spot trading pairs
- IEO launchpad
- Mobile app
- Research Program
- Market data licensing
- Whitelabel technology
- CFTC license application to operate in the US
Jim Bai, Cofounder, 9 years at Citigroup & Graham Capital. Managed $1B+ futures and options book. Founded machine learning startup. B.S. Computer Science, Carnegie Mellon University. B.S. Computational Finance, Carnegie Mellon University. Linkedin.
Craig Austin, Cofounder, 12 years at Microsoft & AQR Capital Management ($208B hedge fund). Led asset allocation research engineering at AQR. Managed team of 18 developers. B.S. Computer Science, Carnegie Mellon University. Linkedin.
Jim Falvey, Chief Regulatory Officer & General Counsel, 20+ years of experience in financial services regulatory and compliance. Former General Counsel for ICE, EurexUS, RJ O'Brien, and Green Key Technologies. Former CAO for the US Futures Exchange. JD, Georgetown University Law Center. MBA, Northwestern Kellogg School of Management. Linkedin.
Sohyung Kang, VP/Growth, 13 years in marketing and digital media, at HBO, DIRECTV and Viacom. Director of Marketing Production at HBO, leading campaigns for Game of Thrones and Westworld. Former acquisition marketing strategist for DIRECTV. B.A. Media Studies, Johns Hopkins University. Linkedin.
Eric Rogstad, Blockchain Development, 7 years at Microsoft & Amazon. Social startup founder. Crypto trader and early investor. Bought BTC at $0.25. B.S. Computer Science, Duke University. Linkedin.
Pavel Petukhov, Market Data Development, 6 years of research and development experience at Akuna Capital and NeurOk Software. Designed and built market data and execution platforms for crypto trading. M.S. Applied Mathematics, Moscow State University. Linkedin.
Michael Siedlecki, Senior Engineer, 8 years of full-stack engineering experience. Founding engineer at 6 YC-funded startups. Acted as interim CTO at NexTravel, where he managed on boarding processes and oversaw time-sensitive web scaling and performance challenges. Former senior software engineer for American Express. B.A. in Economics and Geography, UCLA. Linkedin.
Simon Sejoon Kim, Advisor, CEO of #Hashed, leading South Korean VC. Frequent speaker and advocate of crypto-currencies. Founder of Knowre, education technology company. B.S. Computer Science & Technology, Pohang University of Science and Technology. Linkedin.
Jerald David, Advisor, 20 years in finance and exchanges. Chief Administrative Officer, GreenX. Director of Venture Management, CME Group. Chief Marketing Officer, Dubai Mercantile Exchange. B.S. International Business, Franklin & Marshall College. Linkedin.
Kevin Guo, Advisor, Founder & Co-CEO of Dianrong.com, leading Chinese P2P lending platform. Chairman of Starwin Capital, fintech investment fund. Managing Partner at Yulan Partners, specializing in intellectual property. Executive MBAs from Tsinghua University and Shanghai Jiaotong University. Linkedin.
Howard Chao, Advisor, 35+ year career in law and technology investment. Principal at Doon Capital, emphasizing U.S./China synergies. Senior Advising Partner at ShoreVest Partners. Was Partner at O'Melveny & Myers, Chair of Asia practice. J.D., U.C. Berkeley. Linkedin.
T-Kiang "Tk" Tan, Advisor, Chief Investment Officer of Grasshopper, a leading Asian liquidity provider, and Chief Investment Officer of Tilde, a digital asset liquidity provider. Founder and CEO of ChatQ, a financial chat app. 20 years of experience in the trading technology industry, overseeing the building of large-scale software and high-frequency trading platforms. Linkedin.
Pang Chau, Advisor, 16+ years leadership in quantitative finance. Managing Director at Citadel Investment Group. Managing Director at Knight Capital Group. Built largest dark pool in the U.S. October 2008. M.S. Computer Science, Stanford University. Linkedin.
Stephen Klein, Advisor, Founded discretionary macro fund Abingdon Global. 15+ years of futures trading experience. Portfolio Manager at Graham Capital and AT Global. Managed capital for Brevan Howard and Goldman Sachs. B.S. Economics, Vassar College. Linkedin.
Jimmy Homma, Advisor, CEO and Co-founder at United Bitcoiners Inc. Focusing on delivering Lightning Network. President of the Japan Digital Money Association. Researcher Fujitsu Laboratories of America, Inc. B.S. Mechanical Engineering, Kyoto University. Linkedin.
Jon Anderson, Advisor, Was Head of Execution Strategy at Citadel Investment Group. Alpha Research at Goldman. Sachs Asset Management. Quantitative Research at Radix Trading. B.S. Computational Finance, Carnegie Mellon University. Linkedin.
Hashed - Hashed is a global, early stage venture fund focused on backing founders who are pioneering the future of blockchain and cryptocurrency. Hashed is based in Seoul and San Francisco.
Bain Capital - Bain Capital is one of the world’s leading multi-asset alternative investment firms. Their global team aligns their interests with those of their investors and partners for lasting impact.
Blind - Blind is an anonymous social networking platform for professionals. Work email-verified professionals can connect with coworkers and other company/industry professionals by holding meaningful conversations on a variety of different topics.
Creatix - Since 2004, Creatix has provided the software engineering horsepower companies need to innovate faster and more efficiently. Their talented team members bring a wide range of technical expertise, working alongside high-tech, high-growth organizations to augment existing teams or provide a one-stop solution for development capabilities.
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