Last year Coinbase pulled in $1 billion in revenue. This year Binance expects to clear a similar figure in profits. And the growing use of crypto trading exchanges has been attracting new players who are hoping to bring a more streamlined platform experience for end-users in a bid to capture their own corner of a growing market.
Bitmillex is one such entrant. This UK-registered ICO grew out of the need for “a trusted cryptocurrency exchange that will prioritise security of funds” while also offering a “much broader range of trading and investing options than what current exchanges offer.”
For all the UK’s financial expertise and current status as an international finance hub, it has yet to create a dominant crypto-exchange; Bitmillex hopes to become its first.
Aiming to satisfy both active traders and passive investors, Bitmillex is developing a trading platform built around a number of poles of attraction:
98% of all exchange funds will be held in cold storage (i.e. not connected to the internet) at all times. This substantially reduces the potential losses from any security breach.
Rather than have to make all trading decisions themselves, Bitmillex customers will be able to follow any of the platform’s top traders. Trades made by the lead account can be duplicated by its followers. The plan is also to offer a number of peer-to-peer markets in Bitcoin and the ability for users to lend to each other through their trading balances.
Trading Options in Bearish markets
If crypto markets are in the doldrums, the project team also plan on offering the ability to switch to foreign exchange trading. This will allow for short-selling, a common trading strategy which allows users to profit from falling prices.
All traders receive debit cards that they may use access their balances in fiat at ATMs worldwide. Transfers will be supported by the popular MT4/MT5 Charting Software.
CONCEPT AND WHITE-PAPER
The Bitmillex white-paper comes in at a trim 31 pages, including contents and disclaimers, and does a good job outlining the scale of the market opportunity. In December 2017 total daily exchange volume averaged $15 billion. With average fees at 0.1%, $15 million was earned daily by crypto-exchanges, not including those extra fees for withdrawing funds or trading on margin.
With the popularity of cryptocurrency spreading into the general population, exchanges are finding that they do not have enough capacity to cope with demand, leading to site outages, security breaches and dissatisfied customers who may have to wait months for exchanges to conduct KYC procedures or answer a query or complaint. They also offer limited functionality compared to the requirements of professional traders.
Bitmillex describes itself as a “next generation cryptocurrency exchange” which is able to address the deficiencies of the current crop of exchanges and better fit the needs of traders and investors. In doing so it aims to become one of the world’s top 3 crypto-exchanges.
To achieve this ambitious aim, Bitmillex will be offering many of the expected features of a cryptocurrency exchange, but adding some innovations of its own.
No more than 2% of customer and exchange cryptocurrency holdings will be online at any one time, just enough to maintain daily liquidity. The remaining 98% will be stored in offline cold wallets. To keep the ratio constant there will be an automatic mechanism to reallocate funds between online and cold storage.
Users will be able to set their trading strategy to autopilot by mirroring their favourite “signal provider” trader. The provider’s trades will be replicated in its followers’ accounts. Users will be able to follow up to three signal providers, and allocate a proportion of their funds to each. Traders are incentivised to become signal-providers by the entitlement to 10% of trading profits from copied trades.
Peer to Peer Lending
This social lending system will allow risk-friendly traders to borrow spare funds from the more risk averse, effectively creating system-funded margin trading.
Potential lenders’ funds are algorithmically matched to potential buyers’ funding applications with lending rates generated daily. The borrower’s equity forming a stop-loss cover for any trades executed, eliminating the risk to lenders.
The platform will offer major foreign exchange trading pairs with the option to store balances in fiat. Bitmillex say that this is to give traders more flexibility, particularly on crypto “red days”.
Peer to peer BTC and ETH trading
Instead of having to fund their accounts with Bitcoin and Ethereum acquired elsewhere, Bitmillex customers will be able to buy these cryptocurrencies from other users with fiat.
As the white-paper says, a platform with ambitions to be the world’s most advanced crypto-exchange must have some way for its customers to “easily and conveniently spend directly from their wallets.” Bitmillex are looking to solve this problem by issuing its own debit card.
By maintaining a clearing pool the exchange will be able to clear funds quickly and off-chain, making a client’s crypto balances immediately accessible.
The idea for the Bitmillex exchange developed in Q2 of last year (2017). The following six months saw the team come together, with a start made on both front and back-end development and the beginning of the necessary legal formalities.
An MVP version of the exchange launched this year with the full launch coming post-ICO. Later in 2018 the debit card should be ready for distribution and the company’s headquarters will open in London. The exchange’s decentralized platform is scheduled to be ready for business early next year.
This is a highly international team combining expertise in financial trading, marketing and computer science, and all leading team members have provided LinkedIn profiles.
CEO Malcolm Britton is a trader and analyst specialising in foreign exchange and cryptocurrency while Emir Buğra Köksalan, the project’s co-founder and lead software designer, has previously developed trading and blockchain payment systems for institutional traders in Asia and Eastern Europe. Köksalan is also the CEO of Nixarsoft, a development company which has built software for other cryptocurrency exchanges.
Bitmillex has taken seriously the need to engage in a coordinated and professional marketing approach. The team has several marketing specialists, all of whom have worked on previous ICO campaigns.
TOKEN AND TOKEN VALUE
Bitmillex has come up with a variety of ways to build demand for its token, the BTML.
- BTML holders will have exclusive access to certain exchange offerings like auto trading, free trade signals and lower transaction fees.
- Half of exchange revenue will be distributed as a dividend payment to anyone holding at least 1,000 BTML, in direct proportion to their holdings.
- BTML, as an ERC-20 token, will be used for GAS on the Decentralized Exchange.
- BTML will be listed on two other exchanges. According to the white-paper this is to “create more users for our services from external exchanges as the token can only best be put to use when you trade on the Bitmillex exchange.”
- After the launch of the decentralised Bitmillex Decentralex platform, 75% of income from ICO listings, and 30% of new coin listing fees, will be used to buy back BTML. These tokens will be burned, with total supply, including reserves, to not exceed 50 million by the start of 2021.
50 million tokens of a total of 75 million will be available for purchase during the ICO. 15 million of the remainder will go to the founders and team, and the bulk of the rest to marketing the ICO.
Use of proceeds
- 45% of proceeds will go to developing the exchange.
- 30% to marketing.
- 10% to develop the decentralized platform.
- 10% in reserve to deal with unexpected events.
- 5% for the cost of regulation, compliance and licensing.
The Bitmillex team have come up with an interesting proposition and there are clearly profits to be made by new entrants to the cryptocurrency exchange market. The amount of trading experience within the team is a positive indication that its product will fulfil the needs of real traders.
As it always the case, the success of the project will come down to how many users it can attract. The allocation of 30% of the ICO’s proceeds to marketing seems prudent as the quicker the company can sign up customers, the quicker it will achieve critical mass.
The company’s London location is also strongly in its favour. The crypto world is sorely missing a strong European – and specifically British – player. If Bitmillex can fulfil on its promise, it stands a great chance of securing first mover advantage in a large and growing market.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
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