EMX AMA Recap
CryptoDiffer team
Hello everyone!
We are glad to meet here Jim Bai (@immejb) CEO at EMX and Craig Austin (@craigaustin) CTO at EMX
Can you introduce yourself to the community? What is your background and how did you come to the idea to create your project?
Craig Austin
CTO
Jim and I started EMX in 2017. We moved to California from NYC where we both worked in hedge funds. I was an engineer and manager at AQR Capital – a large macro hedge fund, and Jim was a trader.
We wanted to use new technology to build a better deriviatives exchange.
Jim Bai
CEO
I was a trader at citigroup and graham capital prior to EMX.
Comparing what crypto had to offer to what I had available at Citi and the hedge fund, I could see there was a lot of room for improvement.
Craig Austin
CTO
Yeah, we saw a lot of issues with the current derivs marketplaces – especially access. Most of the users that could access the markets were high net-worth traders or traders at banks and hedge funds – and that left the rest of the world out. We thought that was unfair.
So we built EMX. One crypto-native platform where you can trade the world’s markets. Crypto, equity indexes, gold, EUR, etc.
CryptoDiffer team
What is the token utility in the ecosystem? Where it will be used and why the demand for the token should increase?
Jim Bai
CEO
The token is an exchange token, that has the following utility: fee discounts, insurance fund payouts through staking, use as collateral, and additional benefits, like greater referral bonuses/duration.
As we bring more traders onto the platform, the more demand there will be for the token, as traders use them in the various scenarios above
Craig Austin
CTO
We’re excited about giving token holders special features they can leverage on the platform. We have some interesting new ideas around staking and even follow-trading / social features, as well.
CryptoDiffer team
What are the competitive advantages of EMX? What is your marketing strategy to attract more users and expand around the globe?
Jim Bai
CEO
We are unique in the way we offer both crypto and traditional (equity, commodity, fx) contracts on one platform, using crypto as collateral for all contracts. we also have a custom built, highly scalable matching engine based on frequent batch auctions; and we have been told we have one of the best, if not the best, UI/UX.
We tried to place a lot of emphasis on improving the user experience, since not many crypto exchanges seem to think it’s as important.
Also establishing relationships with key media, for example in brazil we have a very good relationship with cointelegraph which has resulted in brazil being our #1 geo currently
Craig Austin
CTO
Yup, in terms of advantages- we think of it like Jim says: 1) the world’s markets all on one platform, 2) safe, scalable, and fair matching engine, and 3) improved user experience.
On the marketing strategy side, our first priority is building liquidity by onboarding market makers.
We’re also running a series of trading competitions to bring in more traders – sometimes in testnet – and convert them over to mainnet users. We’ll continue to do more of these – including in some unique ways (team competitions, partner token competitions, head-to-head competitions).
We’re also planning a research content program to provide traders w/ trading insights – and partnering with other exchanges and their traders, too.
As I mentioned before, we think “social” trading features are also going to be increasingly important – and we’re eager to launch those (and incentivizing sharing across traders on EMX).
Cryptodiffer Community
How Emx platform bridges the gap between the traditional derivative industry and the blockchain asset arena?
Craig Austin
CTO
We’re using crypto for simple, cheap, borderless value transfer. That’s what we think it’s *best* at right now. Collateralizing derivative trades is a perfect application of that simple transfer right now – so these, plus the fervent crypto trading community, make derivatives exchanges one of the best businesses in crypto currently – and we think there’s *tons* of room for improvement over current solutions. We’re excited to innovate there.
Cryptodiffer Community
My Clear question to Emx
Too many exchanges already running on market,daily 1-2 new exchanges started.
Then why you want to start you exchange? Which special things Emx will provide better than all other exchanges?
Craig Austin
CTO
There are quite a few spot exchanges (you can buy a spot exchange cheaply and brand it yourself and just launch in probably a few days). There are fewer derivative exchanges – and even fewer derivative exchanges that really focus on the user experience.
For folks that want to read more about the differences between spot and deriv exchanges – and the benefits of each, we wrote up a blog post here: https://blog.emx.com/emx-trading-series-spot-vs-derivatives
Cryptodiffer Community
My questions are:
1. Is EMX exchange provides Margin trading Feature & How much leverage we can use upto ?
2. Is EMX exchange provide API trading Feature to traders ?
Jim Bai
CEO
1. We provide leverage trading through futures and swaps, which have built in leverage. you can trade btc with up to 40x leverage now, and gold/us500/eur with 50x leverage
2. We have rest and websocket api, documentation here: http://docs.emx.com
Cryptodiffer Community
These are my questions
1. Like gold, do you plan to incorporate other metals and raw materials?
and
2. How long do you see yourself competing with other exchanges?
Craig Austin
CTO
Yes, we’re listing contracts frequently. Currently our largest trading community is in Brazil – and that community asked for a Tezos perpetual swap, so we turned that around in a few days and launched.
We’ll be launching another contract this coming week – and more in the next few months. We’ll continue to launch a mix of the top (or the most interesting) crypto contracts and world equity and commodity markets.
Cryptodiffer Community
On you White paper you talk about the inherent problem of the architecture, the traders play with the processes orders in time-priority, that led the installing one’s trading servers in the same building or in the same networking equipment , producing heavily spend for access to high- speed- communication services and maybe that would scare or step away the commercial companies, the question is : Have you plan or a key to solve that in the future?
Craig Austin
CTO
Yes! That was one of the main reasons we started EMX. We saw the issues with high-frequency trading in traditional markets – and how that sometimes raised the cost of entry for small traders. We also saw that starting to happen in crypto markets!
So, from the beginning we planned for EMX to have a matching engine based on “frequent batch auctions” rather than continuous matching, as most other exchanges use. In a batch auction based market, all orders that arrive in the same discrete time window are given the same time priority – so there should be no *race* to get closer to the exchange.
That levels the playing field for traders – big and small, around the world. Most traders won’t notice the difference from a speed perspective, but the structure is more fair.
We’re excited about that.
This is explained in detail here- https://blog.emx.com/periodic-auctions
Cryptodiffer Community
Q: As i heard that one co-founder of EMX has left the project and some early investors asked for refund. Can you let us know clearly about it? How will EMX attract investors and gain the trust again after its falling?
Q: US market is still a restriction for EMX platform right now and hard to pass it. So is your team confident to make this successfully? To resolve regulation which may happen to your exchange, which solutions will your team have?
Jim Bai
CEO
Yeah, one co-founder left building the exchange at EMX, to running his own market making firm. This, and us deciding to delay launch of our token until after the exchange was launched, caused some buyers to ask for refunds, which we honored, although didn’t have to legally. We did keep the backing of other buyers/supporters, like #hashed and was able to attract new investors like Bain Capital, based on our continued development of the exchange.
The US market is our end goal, with us applying for DCM/DCO licenses when the time comes. I’ve been down to DC and spoke w/ commissioners at the CFTC already and know the process to formally apply once ready. We have our GC, Jim Falvey, who was the first GC for ICE ready to apply after we’re more established.
Cryptodiffer Community
For exchange liquidity i have concern . will be provided by only you? or you have plans with external liquidity providers as a services?
Craig Austin
CTO
We do have an internal market making desk, but as I mentioned above we’re signing up market makers to trade on EMX. Long term, our internal desk should be used to launch new markets, but the community should provide enough liquidity on established contracts.
Cryptodiffer Community
On you White paper you talk about the inherent problem of the architecture, the traders play with the processes orders in time-priority, that led the installing one’s trading servers in the same building or in the same networking equipment , producing heavily spend for access to high- speed- communication services and maybe that would scare or step away the commercial companies, the question is : Have you plan or a key to solve that in the future?
Jim Bai
CEO
We base our matching engine on frequent batch auctions, that treats all orders within a window (1 second in our case) with the same time priority, thus reducing the incentive to collocate as one does now in HFT. This matching engine is better for pretty much everyone except hft. you can read more here: https://blog.emx.com/periodic-auctions
Cryptodiffer Community
About security now: We’ve seen a few exchanges being hacked in the past months. Do you have any safety in place to avoid this, and reassure your customers?
Craig Austin
CTO
There are three aspects to exchange security – crypto custody, securing our cloud systems, and operational security practices. We’ve partnered with an established leader, BitGo, for crypto security. Our eng team is from Amazon, Microsoft, local Silicon Valley startups here in CA, and hedge funds – and we have experience securing cloud systems. We’re proud of the secure systems and processes that we’ve built here at EMX.
Cryptodiffer Community
Is it possible to brainstorm to involve the existing community as part of the marketing push to explain the meaning/vision product?
Craig Austin
CTO
That’d be great Reinaldo. I’d be excited to chat with you about ideas there.
We’re excited to hear from the community which features to launch (we launched trailing stops last week in response to a user request) and which contracts to list. Discussing user acquisition strategies (maybe interesting competitions?) sounds good too.
Cryptodiffer Community
Hello team,
1. What are the roles of your parnters(hashed, brain capital,blind, TUSD and others) in the projects/ecosystem?
2. Are you planning to make EMX exchange available worlwide or will there be restrictions?
Jim Bai
CEO
1. #Hashed is our eyes/ears on the ground in Korea, one of the largest crypto trading regions. Bain Capital helps with capital introductions to strategic investors from traditional VC side. They also advise on building teams/startups. Blind managed our korean community, TUSD is likely to be our first stable coin to be used as colleral in the near future
2. We are available most everywhere except the US, which we would like to accress by obtaining CFTC licenses
Cryptodiffer Community
1. What is the difference between a margin trade and a futures contract?
2. With bitmex coming under recent regulatory screening , how would emx mitigate the regulatory risks ?
Craig Austin
CTO
The regulatory risk question is interesting. From the beginning, we wanted to build a trustable exchange – and we believe that to build a fair marketplace, you need to know who is trading in the market. So, EMX has had strong KYC/AML procedures from the start. We believe this will clear a stronger path for us in the future as global regulations tighten around crypto derivative trading – and give us a leg up in the market. We do realize KYC/AML is a hurdle that users need to jump through, but our process takes less than 5 minutes in most cases and is very easy to run through.
Cryptodiffer Community
What prompted EMX to partner with ProBit and what is the strategy to get listed on more exchanges?
Jim Bai
CEO
Probit is a fast growing korean exchange that gives us access to the korean trading community as well as a EMX/KRW pair that is highly sought after.
Cryptodiffer Community
What was the plan behind the $25k Trading Challenge and how successful has it been?
What are the future plans to bring in more users?
Craig Austin
CTO
This competition has been great. Our current batch of active traders on EMX mainnet came from a successful testnet competition we held back in May – and we’ve seen a great reaction to the most recent competition, as well. Engagement has been really high – and it has gotten lots of users used to the EMX trading experience. We’re going to launch more testnet and mainnet competitions soon with some new and interesting ideas (mentioned above) soon.
It’s been fun though. Our latest competition has been a really tight race.
Since it’s testnet, folks go all-in and the gains have been comically large.
Cryptodiffer Community
Im not very familiar with these types of (futures) markets but they have always caught my attention: what advantages does EMX bring over the traditional ones?
Can you tell us what conclusions have been reported from test trading challenge, any achievement or improvement?
Thanks for AMA
Craig Austin
CTO
I always refer to blog posts 🙂 but we wrote an interesting post last week about the different types of contracts available to trade on crypto derivative exchanges. Coming from traditional markets, some were new to me – but they all have a purpose: https://blog.emx.com/emx-trading-series-types-of-derivatives
Cryptodiffer Community
1. China and India are populous and very potential countries. Do #EMX have any special plans fot these two countries?
2. What technology, #EMX apply to protect users from frauds and scams?
Jim Bai
CEO
1. I’m actually in China now, building partnerships and filding local agencies to help spread the word of EMX here. We recently entered into a formal partnership with BN Capital to help us market and attract users in China.
2. We partnered with BitGo to provide custody of funds. They are highly experienced and trusted by many institutions. That, and our automated with manual review of withdrawls, helps keeps funds safe
Cryptodiffer Community
1. I don’t know if this can be said, but you are backed by capitals and people with experience in the area? Who?
2. This exchange that you develop is centralized, or will you incorporate some functions with some blockchain?
Craig Austin
CTO
Answering your second question, yes EMX is a centralized exchange. We actually started our life in 2017 as a DEX – but we pivoted to building a CEX after we determined we just could not provide a good trading experience as a DEX – at least with current tech.
We’re stil very much interested in DEX tech – and are watching to see how it matures, but right now the best trading experiences are going to be on a CEX – and we only wanted to give users the best UI/UX trading experience. We think a high quality experience helps build trust between an exchange and its users – and that’s most important in this market.
Cryptodiffer Community
Where are they located, and should I worry about regulations, are there restrictions by country?
Is Bitmex an example to follow for you or do you plan to do something – definitely – different?
Craig Austin
CTO
Our product and eng team is located in Palo Alto, CA and we have a few folks in NYC, Chicago, and Asia.
You can see some pics of our office and team here in this blog post I wrote about our history- https://blog.emx.com/from-evermarkets-to-emx-evolution
Cryptodiffer Community
How has regulatory barriers in different countries have affected EMX?
How do you see this problem?
How this problem is going to be solved in recent times?
Craig Austin
CTO
Our General Counsel, Jim Falvey, guides us through global regulatory matters. He was actually the first GC of the ICE – one of the largest traditional deriv exchanges in the world.
Yes, we do see the global regulatory market changing for crypto deriv exchanges soon-ish – and we want to be ready for that when it comes. Most of our team is in the US, our company is off-shore, and we offer to most every country except the US.
We feel the most important regulatory framework for us is KYC/AML as I’ve mentioned. We have to secure our market from manipulators and bad actors. That’s hugely important to us – and regulators – and that’s why onboarding and AML / risk compliance was the first system we built and launched mid last year.
Cryptodiffer Community
I always use bitmex ,whenever there is a big fluctuation in market BitMEX faces server overloads problems or lagging and makes me stressed ,thats really annoying. Have you tested yours ? so that nothing like that happens.
Jim Bai
CEO
We know all too well about the overload issues at bitmex, as our internal market maker sometimes trade there to hedge. It seems to happen at the worst times, and worst of all, i can see other people trading when I can’t. This is borderline insider trading, and should be outlawed. We designed our matching engine to scale more easily during busy (ie most volatile) times. by matching traders all at once, in 1 second batches, we can easily cross thousands to tens of thousands of traders within each second. this is just one off many banefits of frequent batch auction.
Cryptodiffer Community
1.Are US citizen allowed to trade in your platform?
2.EMX’s security system is very good, but for unexpected incidents, is there any backup solution for #EMX ?
Jim Bai
CEO
1. No, US citizens are not allowed at this time
Cryptodiffer Community
You seem to bring something unique in the niche you have picked in the crypto space ( trading commodities along with crypto) , how do you hope to outperform the competition from major top tier exchanges?
Craig Austin
CTO
We plan to offer a differentiated platform bringing new ideas along with a new level of quality / fairness / security – and we plan to be able to move faster because we’re small and nimble.
It’s why a small startup like Google in 1999 feels they have a chance to unseat Yahoo or why Facebook thought they could compete against Myspace.
Cryptodiffer Community
Is your Project Financially Strong ? Who are your Partners that you think is important for Future ?
Minimum How many Tokens one have to Stake?
What is the percentage we get reward ?
Jim Bai
CEO
A minimum of 1000 emx tokens is required to stake into the insurance fund. 10% of net gains(losses) are shared pro-rate with other stakers every 2 weeks.
Cryptodiffer Community
What are some of the major achievements that EMX has achieved and what milestones are planned ahead in the next 6 months, 1 year and 5 years?
Craig Austin
CTO
Most importantly, a mobile app. But also more contracts, more types of collateral, the addition of social features, and more complex order types (for advanced traders).
We hope to announce our first mobile app soon. So far we offer a great looking desktop trading experience and a mobile web version – but not yet a native mobile app. We’re working on that now.
Cryptodiffer Community
Can your platform experience slow or congested problems when encountering large trading funds? Like sometime we face same probelm in bitmex. What is the way to cope?
What experiencie you & your team have in trading Platforms? How did that made you get to this project idea?
Craig Austin
CTO
My experience in the past was developing quant trading systems in-house at AQR Capital. Before that, I was building Microsoft Outlook up in Seattle. I’ve always enjoyed building user-facing applications. At AQR, our researchers and traders were our users, and we built a platform them for them to use and do their jobs daily. In 2017, when Jim and I started EMX, I was excited to translate that experience outside of AQR and into the world of crypto traders.
Cryptodiffer Community
As you provide all types of trading such as gold, forex, crypto etc. at one exchange, how will you get approval from government authorities?
Why you launched your EMX token? How does it help in the emx platform ecosystem? why should investor consider to lookup and invest it?
Jim Bai
CEO
I can speak for the CFTC, the main futures regulator in the US. They regulate who trades, rather than what gets traded. For example, they can regulate exchanges from offering to US traders, but they can’t regulate an exchange in Bulgaria from launching a gold contract
The token is used to incentivize trading on EMX, by providing discounts to trading, greater rewards for referring other tradrs, to be used as collateral, and by staking to earn insurance fund payouts. it’s demand is correlated with the growth of emx so as we grow, demand of the tokens should grow too.
Cryptodiffer Community
EMX was founded and developed by a team of experienced Traders & asset management. Is this an advantage for #EMX?
With the current market decline, What is strategy to dominate the market? What is Team’s plan to attract investors and traders successfully?
Craig Austin
CTO
Other traditional markets, that is. Last year when BTC was flat for a while, energy markets were going pretty wild.
A lot of crypto traders are just starting to become aware of global macro trading issues and markets and we think that’s awesome.
Traders love finding sources of volatility all over the world and platforms like EMX allow traders to trade wherever markets are interesting.
If you’re just trading BTC on BitMEX, you don’t get that benefit.
So, in summary, EMX is a place to trade when crypto markets are hot – or cold – or flat – or volatile – because there’s always volaility somewhere.
Cryptodiffer TEAM
Awesome, thank you @craigaustin and @immejb for taking your time and for the detailed answers!
It was cool AMA
Craig Austin
CTO
Thanks! And thanks everyone for great questions. Join us at https://t.me/evermarkets for any follow ups.
And anyone who is interested, sign up at emx.com and be trading crypto, gold, EUR, etc. within minutes
