Since the beginning of this year, the trading platform has frequently acted, causing one after another "destruction tide", and the market share of derivatives has been expanding. On the other hand, the market is volatile, FCoin's thunderstorm tests the trust of the industry, and whose future is the fierce confrontation? Should we get in the car?
On February 28, the ChainNode livestream invited Xu Kun, chief strategy officer of OKEx, Ben Zhou, co-founder and CEO of Bybit, and Zhao Wei, partner of TokenInsight, to discuss those matters with host Jun Yao.
In the keynote speech session, Xu Kun, Chief Strategy Officer of OKEx, shared the secrets of OKEx's success and the strategic planning of the new stage.
- ChainNode chain node successfully settled in bitcoin.org, opening a new era of Chinese blockchain community
From a platform perspective, the company has identified four core business lines: buy crypto, trading, crypto asset tools, and academy. Among them, rich tools can help the entire crypto asset ecosystem be more complete, and mining pools are an important part of crypto asset tools. For users, through a variety of tools, they can have a deeper understanding of crypto assets and have more ways to maintain and increase their value. We have a contract business, which is convenient for miners to hedge. For currency users, the staking business provides a currency-based value-added method for everyone. This is also our original intention to develop the mining pool business.
Secondly, in the field of public chain, OKChain's goal is to create a "commercial chain alliance" with the following characteristics: (1) in the design and application of "customized" design of "one application and one chain"; (2) provide low Expansion of cost data, OKChain innovatively splits the data into 3 layers: block data, runtime data and off-chain data, while meeting the requirements of reducing existing system docking costs, improving system consensus speed, and expanding data dimensions on the chain. Advantages, and solves the disadvantages of the traditional public chain solution that can only be achieved by writing data into the block, and the problems of large amounts of data redundancy and inefficiency; (3) The universality of everyone's development of DEX is proposed Concept, any user can build his own decentralized exchange based on OKChain, and can completely decide what kind of assets and trading pairs to go online; (4) With completely independent OKT fuel, OKChain does it from 0 to 1, its economy The design of the model should have a higher degree of freedom to better inspire all participants to build, share, and win-win.
Third, regarding the platform currency and repurchase plan, the continuous improvement of the OKB deflation mechanism is the long-term goal, and the contract repurchase commitment is also determined. More progress on the platform currency will be reported to everyone at the appropriate time.
Bybit co-founder and CEO Ben Zhou shared his thoughts on being a derivatives exchange.
Derivatives trading volume reached USD 3 trillion in 2019, and it is expected that by 2020, the transaction volume of digital asset derivatives trading will reach more than double the spot trading volume. Bybit is a company specializing in derivatives exchanges. It was founded in March 2018. The team has a traditional financial background. Now it has achieved the top three positions in the global digital asset derivatives field. In October last year, the single-day transaction volume exceeded 4 billion. Dollar records. The reason why the derivatives market is so important is that first, user demand has shifted from altcoins to mainstream currencies that are more liquid; second, derivatives are not afraid of bulls and bears, as long as there are fluctuations, they have profits.
Bybit co-founder and CEO Ben Zhou said: The advantages of Bybit are that it is "stable as a dog" at any time, which makes users feel comfortable using it. In order to achieve this, Bybit has not been down for maintenance so far, and has always been a hot update. At the same time, it is necessary to summarize the bottlenecks encountered by other exchanges, such as the problem of overload during large fluctuations, and self-improvement. The second is product-driven. Bybit will launch a self-developed forward contract product at the end of March. It has several core functions. It has not been seen in the market, including two-way positions, perfect lock-ups, and combined margins, thereby increasing the utilization rate of margins. The third is to attach importance to safety. Bybit will make better risk control in exchange rules and regulations, such as preventing Go through positions, automatically reduce positions, and execute digitally. In addition, Bybit invited the former Chief Security Officer of Ping An to take charge of security business and do security risk control.
TokenInsight partner Zhao Wei released the "Annual Exchange Research Report" and gave 9 points of outlook:
The full report can be obtained by clicking on the link:
In addition to wonderful topic sharing, the roundtable session also discussed many topics of common interest to everyone. The main highlights are as follows:
1. Talking about FCoin's thunderstorm, the traffic style caused it to not attract real traders. Exchanges should do their job well, that is, risk control and matching;
2. It ’s safe to talk about. OKEx has encountered 3 DDOS attacks in one day. The user ’s assets are not affected. The fluency problem has been resolved in minutes. DDOS attacks require high costs and are suspected to be caused by operations of friends and merchants.
3． Talking about the Bitcoin ETF, the ETF was rejected again and had nothing to do with the market diving. If the Bitcoin ETF cannot answer the market manipulation question, it will not be approved;
4． Chat DEX, it is just a toy, and there is no comparable with centralized exchanges. DeFi products such as DEX cannot be transmitted to the bottom of Ethereum as the upper-layer application value. This core problem cannot be solved in the short term;
5． Chat quotes are either worthless or unimaginable. There are predictions that the highest value will be 20,000 US dollars in 2020.
The following is a text compilation of the round table session.
ChainNode: Where will the main track for exchanges compete in 2020?
Xu Kun: My answer is derivatives. Derivatives should be the core focus of the entire exchange track this year. A large number of altcoins have come to an end, and the mainstream currency has completed the return of value. Naturally, a variety of derivative innovations based on the mainstream currency will generate enthusiasm for the market. In addition, for the head exchange, the continuous improvement of the platform coin's mechanism design and ecological construction, and the layout to the public chain track are two major directions.
Ben: Because we are a derivatives exchange, we certainly hope this is a circuit. I think there are two perspectives, to win users through product innovation, or to fight a price war.
Zhao Wei: The exchange's track is very small. If it is necessary to subdivide, I think derivatives trading is relatively important this year. It is expected that by 2020, the transaction value of digital asset derivatives transactions will reach more than double the spot transaction volume. ChainNode: What kind of thinking does the Foin thunderstorm bring to the industry?
Xu Kun: For the exchange, strengthening internal control and practicing internal skills can last a long time. Fcoin matters, we look backwards, in fact, there have been problems of funding inequality in the early days, but in the early stage focused on market expansion, has not solved the internal problems. Marketing can be tricky, but there are no shortcuts to technology. If the pits left in the early stage are not filled in time, there will be an outbreak later.
Ben: When we initiated the project in early 2018, from the perspective of outsiders, we were wondering why everyone was engaged in "transaction is mining". Because my understanding is that the exchange should do its own job, that is, risk control and matching, but at that time, the currency exchange exchange put a lot of energy on traffic play. I think the core reason for this problem of FCoin is the mode positioning. The profit model of the exchange is actually very clear. It is to get customers to make matches and earn commissions. FCoin has many people come to fleece the wool. He has not attracted real traders, and the flow of traffic has caused the final problem. ChainNode: How does the exchange ensure the security of the platform and user assets? What warnings or countermeasures are there for uncontrollable risks?
Xu Kun: First of all, our cold wallet will be disassembled into multiple copies, each of which only stores up to 500 BTC. As long as the private key of the cold wallet is touched once, it will be discarded immediately and will not be used again. Secondly, the actual operation triggered by the cold wallet requires the company's three security personnel to start together. Moreover, the trading platform will regularly organize the wallet in order to better manage assets and ensure security.
OKEx and last night suffered two DDOS attacks, 200G traffic and 300G traffic respectively. The second attack caused the exchange to go down for 1 minute. Just in the live broadcast, OKEx was once again attacked by DDOS with 400G traffic.
In response to the issue of DDOS, I respond to the logic behind: 1. Doing DDOS requires paying an expensive cost, and ordinary individuals do not have the ability to pay this cost; 2. DDOS does not affect the security of user assets, only The user experience has a short-term impact. OKEx's global technical team is available 24 hours a day and the process is completed in minutes. We have also dealt with the alarm. This kind of high-traffic source tracing is very simple. We also call on the industry to return to healthy competition of products and not to spend team funds on these meaningless things.
Ben: One of the advantages of our trading is that only derivatives have no spot, and there is no channel for fiat currency to digital currency. In other words, our user portrait does not require frequent deposits and withdrawals, so we have adopted the most secure method, and all customer funds are placed in multi-sign cold wallets. What does this mean? We gave up convenience, we limited it to 3 withdrawals per day, and all were manual operations. From the perspective of protecting the safety of customer funds, it is safest to sign multiple cold wallets.
The second point is that the internal security mechanism we use is a zero-trust mechanism, which is not supported by the entire company. In other words, everyone is a stranger to the system. Including me, the system protects everyone. This should also be the highest level from the underlying architecture.
In the third point, we are communicating with several suppliers in the industry who are making compensation. In the next step, we may launch similar services. At least it can guarantee that if the money of a certain part of the exchange is stolen, there can be an insurance compensation mechanism. ChainNode: Yesterday the SEC once again rejected Wilshire Phoenix's Bitcoin ETF application. So far, all BTC ETF proposals have been rejected. The reason is still "fearing that the BTC market will be manipulated". Is the ETF rejection the inducement of this BTC price dive? What is the difference between Bitcoin ETF and ETF products launched by domestic exchanges?
Zhao Wei: First of all, the refusal of ETF has nothing to do with the decline of BTC, everyone should already be immune.
Let me first explain the difference between the Bitcoin ETF applied by these institutions and the exchange's ETH? The former has a process of fund raising. For example, Ben wants to buy the ETF I issued, Ben gives me US dollars, and then I buy it myself or trustee to buy BTC. Wilshire Phoenix, a Bitcoin ETF, also has a US bond ratio. Assuming that the BTC purchased at $ 100 is converted into 1 share, at this time Ben has a share of the ETF I issued. I raised a lot of US dollars, bought the corresponding BTC, packaged it into an ETF product and listed it on the exchange. At this time, there will be a net value for this ETF product. At this time, someone will apply for it. The process is complicated and will not be described in detail.
Where is the interesting place? If the ETF is listed, you can think of it as a stock on the NASDAQ or NYSE, and all investors can buy it. This is equivalent to expanding the Bitcoin audience from the currency circle to the entire global market of the US stock market. How many people can buy Bitcoin directly through compliant channels. This demand is extremely huge, so if the Bitcoin ETF is passed, it will be of great significance.
So why do we fail to pass, the reason has always been that price manipulation is too serious. Wilshire Phoenix's Bitcoin ETF is slightly different in design. It means that if the Bitcoin price fluctuates too much, it will increase the share of bonds and reduce the share of Bitcoin. But it didn't work, it still couldn't explain the problem of bitcoin price manipulation. This problem cannot be solved, and the Bitcoin ETF will never go up. This is my personal opinion. I think it is unlikely to pass in the past two years.
So, why do you want to do this, because the 2% management fee and the redemption fee for the purchase and redemption? Once successful, compliant Bitcoin is very valuable, and of course compliance is also very expensive. Money matters.
Xu Kun: I personally think it is influential, because the majority of traders in the currency circle are very junior, and their indicators of trading are mainly expectations and emotions. Therefore, the Bitcoin ETF has a certain impact, but not all of them. . In addition, there have been many black swan thunderstorms in the market recently, which have also caused negative effects. These emotions have accumulated, causing the secondary market to make short-term adjustments.
Leveraged ETFs are different from ETFs. In traditional financial markets, ETFs are suitable for investors to make long-term investments, but leveraged ETFs are only suitable for professional investors to use for risk hedging or short-term speculation. They are not suitable for ordinary people to make long-term investments and long-term holdings. The risk is extremely high, because leveraged ETFs will suffer losses due to the rebalance mechanism. The longer the time, the more losses.
Recently, the leveraged ETFs launched by some small exchanges have increased leverage for the matching currency, and made ETF trading into a short-term speculative variety, and this leverage is simultaneously enlarged based on the matched assets.
This leveraged ETF is essentially a fund. The issuer uses this part of the funds to trade contracts and other derivatives in the market. Therefore, when the fund's net worth loses 20%, it actually comes from its purchase contract or other derivatives' losses. There is risk when there is leverage. Instead of nesting a layer of operation, the risk will disappear or reduce.
Leveraged ETFs appear to be easier to operate than contracts or currency leverage. In fact, it is the issuer that does the corresponding work for investors behind the scenes. For ordinary investors, pay attention to whether the exchange or institution that issues the ETF has the ability to ensure sufficient liquidity and acceptance.
Ben: The traditional ETF and the currency ETF are actually different. The exchange just took that look. But I think it can be regarded as an innovation, it has greatly reduced the threshold of user understanding and captured the psychology of retail users. Many people often look at the K-line when they make a transaction. The altcoin itself has a small pool, and a leverage effect of 3-5 times. The K-line picture is very exaggerated. Some users feel it at first sight, as if it is retrieved. To understand the feeling of chasing altcoins that year, this is what we learned from user research. ETF products on exchanges are still very immature. At the market maker level, a big challenge is to rebalance the index. If you really want to make an ETF product, it takes a lot of effort, especially to find the right market maker, which is a core difference. ChainNode: In addition to the full bloom of the derivatives market, DEX was also a very hot concept last year. Traditional exchanges and the concept of DEX run counter to each other. Why should they be deployed on DEX?
Xu Kun: Centralized exchanges and DEXs are complementary, not a substitute relationship. Centralized exchanges have efficiency advantages. DEX gives users more flexibility. The core audiences of the two models are actually different. Therefore, as a traditional exchange, the development of DEX is not only in line with the trend, but also as an effective supplement to the existing business in order to provide users with more comprehensive services.
We have launched OKChain's testnet, and DEX is our first application case. OKEX DEX According to our stress test, the performance of the matching part can easily reach thousands, and the performance of the transfer under the same hardware conditions will be higher. At the same time, the configuration performance of adjusting the block nodes has also been greatly improved.
Ben: We also established a blockchain research institute last year to study these layouts. However, in my opinion, the focus of many people is the level of capital security of the exchange. And after researching with our users, for derivatives users, safety is not even the first principle, and the most important thing is matching efficiency. Therefore, we believe that if DEX is to be done, the direction may not be security, but other aspects, such as liquidity. But for matching efficiency, a single node is definitely the most efficient. I think this is why the derivatives market did not have a formed DEX.
Zhao Wei: To be straightforward, DEX is a toy, and DeFi is also a toy. There is no problem with the layout of the big exchange. You can do anything with money. Small exchanges can do this directly, but your market will always be so big. The current DEX and DeFi are based on Ethereum. Its problem is that the application value of the upper layers cannot be transmitted to the bottom layer of Ethereum. This core problem cannot be solved by Ethereum in the short term. That's why I'm not too bullish on Ethereum. Of course, I highly recommend it, and I also recognize everyone's layout. The circle has expanded, and there may be new people coming in and new technology development. But if you compare DeFi with a centralized exchange, there is really no comparability. ChainNode: What do you think of the future market? Predict the highest price of BTC in 2020.
Zhao Wei: My point is always that you can get in the car at any time, and it's done. Don't buy too much at once, buy a little every month and use it as your asset allocation as part of your investment. For example, if you make a fixed investment of 5-10% of your income every month, you will feel very flat and no longer be affected by price fluctuations.
Ben: I think as long as it doesn't go to zero, there will be fluctuations in derivatives. We also talked to large institutions, and they thought it should be a shocking market. If I predict, I hope to reach $ 20,000 this year.
Zhao Wei: Ben is too conservative. Bitcoin in the future will either be worthless or unimaginable. There are only two extreme cases.
Xu Kun: I also believe in it, here to recharge for everyone! We are confident in the industry. The current market size is about 300 billion U.S. dollars, and there is still room for development ten times and one hundred times in the future.