FMex contract exchange debut, Zhang Jian 13 questions and answers comprehensive interpretation

At 21:00 on June 5, FMex, the contract trading platform under FT Ecology, held its first online conference. FCoin founder Zhang Jian on the FMex platform's contract business, income distribution, community governance, sustainable mining mechanism and other issues. One by one answer.


FCoin founder Zhang Jian

Zhang Jian said that FMex is a long-awaited strategic product of the FCoin development team. The basic advantage is to build a contract exchange that truly belongs to the trader. The FMEX holder is the only equity owner of FMex, not only enjoying 80% of the revenue. Distribution also has true community governance rights. In addition, FMex has a four-point platform featuring top technology architecture, 80% revenue distribution, community governance and sustainable mining mechanisms, the last three of which are unique to FMex.

Talking about the relationship between FMex and FCoin and FT ecology, Zhang Jian said that FMex and FCoin are parallel relationships and belong to the same part of the FT ecosystem. FMEX will be issued based on the FT public chain, the development of future contract exchanges and the FT public chain. Development will promote each other and aim to build a “future financial and economic infrastructure” to jointly promote the development of the entire industry.

The core views are as follows:

1. FCoin's community-based and compulsory economy is the development direction of the entire blockchain industry and even the future financial and economic development, and can exert its power on the FMex contract trading platform.

2. FMex is not a private company. There is no traditional shareholder. FMEX holders not only enjoy 80% of income distribution, but also have real community governance rights.

3. The most important ability of the contract exchange is to control the risk and maintain the fairness of the transaction. FMex is designed to use the full memory model to ensure real-time response and clearing of each user's effective orders.

4.FMex has used the daily settlement system since its inception (this is consistent with traditional futures). The biggest advantage of daily settlement is that it allows users to take profits after settlement.

5.FMex has three layers of risk control measures: forced liquidation, contract insurance funds, and automatic lightening.

6. Sustainable mining is one of FMex's core advantages. Compared with the early FCoin mining, the biggest difference is the fixed release and 1 year lock, which avoids the short-term wool party to the maximum extent. Return to the trader.

The following is the full question and answer content of the conference:

Q1: What is the consideration for the launch of the FMex contract trading platform? What do you think of the market environment developed by this year's exchange?

A1: The contract trading platform is a strategic product that the FCoin development team has been preparing for a long time. We believe that the development of the digital asset derivatives market is a very important part of the development of the entire industry. The community and Certified economy we advocate can still be used on the contract trading platform. I also firmly believe that community and the economy are the development direction of the entire blockchain industry and even the future of finance and economy. In this context, we launched FMex.

My view on the market environment developed by this year's exchange is that not only this year, but also the year after next year, the market environment developed by digital asset exchanges is still in an early and immature state.

Early and immature can be understood from two aspects: on the one hand, the whole market is very immature in terms of technology, products, rules, etc. There are various problems to be solved or perfected; on the other hand, this market still has great potential. Basically, it is still in the stage of barbaric growth, and there are still very good opportunities.

Q2: From the contract business, what is the difference and advantage of the transactions that already have contract business on the market?

A2: Regarding the advantages, I can summarize here: a basic advantage + four-point platform features.


A basic advantage, but also our goal and initial focus: to create a contract exchange that truly belongs to the trader, that is, the trader's own contract exchange.

As we all know, the exchanges currently on the market are company-owned and have a small number of private shareholders. Contract exchanges are very profitable, but they have nothing to do with ordinary traders. It is difficult for trading users of the platform to share the development and income of the exchange, and there is no substantive right to speak.

FMex is not a private company and has no shareholders in the traditional sense. The FMEX Pass holder is the sole equity owner of FMex, not only enjoying an 80% income distribution, but also real community governance rights. This is our most fundamental difference.

The four-point platform features: top technology architecture, 80% revenue distribution, community governance, and sustainable mining mechanisms. The last three points are the unique advantages of FMex (that is, what the existing contract exchanges don't have). It is also the result of the FCoin platform's accumulated practice after one year.

Here is a bit of technical advantage: the most important ability of the contract exchange is to control risk and maintain fairness of the transaction. Now the market is better than the BitMEX contract exchange, but BitMEX is the technical structure of 3 years ago. It shows that users who cannot support larger scales cannot access system bottlenecks when market fluctuations are severe.

FMex started with a full-memory model to ensure real-time response and clearing of valid orders for each user, especially when forced closing and automatic lightening, they can be processed at the same timing as the order response and matching processing. . This is the embodiment of the “top technology” that we mentioned.

In terms of top technology, it is worth mentioning that our settlement advantage: Since digital currency transactions are 7×24 continuous, and the early bitcoin price fluctuations are fierce, FMex has used the daily settlement system since its design (this point) Consistent with traditional futures). The biggest advantage of daily billing is that it allows users to take profit after settlement.

Some domestic exchange contract systems have designed a mandatory allocation system, and the user's profit can only be determined if the weekly settlement is made and the system does not have a loss. BitMEX's fixed-term contract must also wait until the due date to pay off the profit. If the user wants to mention it in the middle, it must manually close the position.

Q3: How to solve the risk control and transaction security? How to control if there is extreme market? If there is a short position, is there a distribution mechanism?

A3: The mandatory liquidation, contract insurance fund and automatic light-reduction mechanism adopted by me are the more effective and fairer risk control measures for contract exchanges in the industry.


The biggest problem with the apportionment mechanism is that the contract exchanges force the uncontrolled loss of risk to the profitable users, which reduces the actual profit of the profitable users. FMex did not use an allocation mechanism at the outset.

Let's briefly introduce the forced liquidation, contract insurance fund and automatic lightening mechanism that we use:

Forced liquidation is the first level of risk control for contract exchanges, which is what we often call a bursting mechanism.

The contract insurance fund is the second-tier risk control method of the contract exchange. The insurance fund is used to prevent the investor's position from being automatically lightened. The fund is used to improve the price of the unexecuted strong flat commission to avoid their being taken over by the automatic lightening system. . FMex will inject a certain amount of insurance funds at the beginning of the system's launch. The increase in the insurance base amount comes from the forced closing of the market and the price in the market is better than the bankrupt price.

Automatic lightening is the third layer of risk control for contract exchanges . Automatic lightening occurs when the contract insurance fund cannot cover the risk of forced liquidation. Automatically lighten up the position to ensure the real profit of high-risk users in an extreme market, to prevent the loss of profits with the volatility of the market, and to help reduce the risk of losing users.

Q4: How is the ratio setting of FMex “35% FT community holding, 35% for mining, and 30% for raising funds”?

A4: First of all, FMex is a community-based exchange that provides technical support for the FCoin platform. It is an important part of the FT ecosystem, so it is very reasonable for the FT community to hold 35% FMEX.


Secondly, 35% of FMEX belongs to the FMEX community and is used for sustainable mining. This is the practice of community-based and certificate-based economy, and it is also the initial insistence of “making traders the real masters of trading platforms”.

Finally, 30% of FMEX is used to raise funds. This is because the contract trading platform is now very competitive. We need to have sufficient development funds to participate in the market competition and gain a leading edge in the competition.

This arrangement not only allows FT holders to enjoy the value of ecological expansion, but also fully unlocks the potential of community-based and Compulsory economy, and allows the platform itself to have sufficient development momentum to participate in market competition. As you can see, there is no team reservation, early private placement, etc., which is almost a selfless arrangement.

Q5: How is the FMex user fee designed? How are the rights of sustainable mining and fee refunds allocated?

A5: FMex and FCoin spot transactions are consistent in the design of the fee, encouraging market makers and market-making users, the bearer pays the handling fee, and the maker income fee. At the same time, FMex has a rich order type and a stop-loss mechanism.

Sustainable mining is one of FMex's core strengths and is the result of FCoin's years of practice. The essence of “mining” is the long-term feedback behavior that gradually gives the ownership of the platform to the trader. The biggest difference between sustainable mining and early FCoin mining is the fixed release and 1 year lock, which guarantees sustainable mining and practices our initial intention of “making traders the masters of trading platforms”. All FMEX returned by sustainable mining will lock the warehouse for 1 year, thus avoiding the short-term wool party to the maximum extent, so that the platform's certificate can be returned to the trader.

Q6: On Friday, FCoin released a notice on the issuance of the FMex platform. This Monday, the three consecutive days of buying were all "second light", and today's fixed placement is also hot to 13 times. Have you expected this situation? What is the reason?

A6: I think there are two main reasons. The first is the appeal of the FCoin platform itself. The second is that everyone expects FMex to be very high.

First of all, everyone knows that FCoin has just passed its first anniversary. After years of accumulation and development, FCoin has become a banner in the implementation of community-based and practiced the Compulsory Economy in the trading platform, and has a very high-quality, loyal user base. This user group is also a staunch supporter of the FT ecosystem.

The second point is the expectation of FMex itself. As you can see, the status and importance of contract trading in the entire market has gradually increased in the past two years. In particular, the rise of the perpetual contract represented by BitMEX is changing the pattern of the entire trading market. In addition, the profit margin of the contract exchange also gives everyone greater expectations and confidence. The particularity of the contract trading platform (such as high leverage and high risk of risk control) leads to very high requirements for the underlying technology, which makes it difficult for small and medium-sized exchanges to join the competitive sequence in this market.

The underlying technology itself is an advantage of the FCoin development team. As we all know, last year, FCoin had already carried the world's largest trading volume in just one week, but it kept the trading fluency and never took the opportunity.

In addition, in addition to technically reaching the top level, FMex also has the advantages of community, especially the introduction of sustainable mining mechanism, which makes the market full of expectations.

On the second point, it is also easy to understand that FMex will have similar FCoin early start-up advantages in the contract trading market, while avoiding loopholes in its early mechanisms, which will make FMex's development healthier, sustainable and more dynamic. .

Q7: This public release of FMEX is understood by some people as “Super IEO”. Do you recognize this statement? Can you elaborate on the process and design intention of this public offering?

A7: This fundraising is based on daily snapping + targeted placement, which allocates a total of 300 million FMEX, of which the two methods each account for half of the quota. This design is designed to balance the fairness of the market with the interests of FT holders.

The daily snapping is mainly to satisfy the fairness of the market. At the beginning of the punctuality, everyone can grab it, and there is no additional condition. The directional placement is mainly to take into account the interests of the FT holders. The specific method is to oversubscribe first, then prioritize the allocation according to the FT lock position, and finally allocate according to the subscription amount.

Whether it is a daily snap or a targeted placement, the daily quota is 10 million, so the benefit of the design is to make the fundraising more fair. If it is completed once or twice, it is very likely that there will be many people who do not know or are not ready to end. Properly having a fundraising cycle will give everyone ample opportunity to participate.

I think the super IEO statement is a bit exaggerated. The fundraising of FMEX is somewhat similar to that of IEO, and it is somewhat different. The similarity is that they are all fundraising activities led by the exchange. The difference is that FMEX is not a third-party project, it is part of the FT ecosystem with FCoin. The FT community is the largest holder of FMEX.

Q8: You mentioned in the FT community sharing that the FMex business is “typical ecological expansion, not platform expansion”. How to understand?

A8: The expansion of the platform here refers to the addition of new functions to the same platform, while the expansion of ecology refers to the established platform, but belongs to an ecosystem. Why did the contract business choose platform expansion and chose ecological expansion? I have had an interpretation in the community before, here is a brief explanation: the first reason is that the user group is not completely consistent, and the differentiation is very obvious.

Everyone knows that spot is a universal platform. In theory, it can be understood that where the currency circle expands, where the spot platform expands, it has almost no boundaries in the industry. However, the contract exchange is a high-risk platform, and the universality of the participating population is much lower than that of the spot.

If we say that we completely integrate them into a platform, there will be big problems, because everyone knows that we are community governance and community dividends, but if the two platforms are very different, we will actually There is a lot of difficulty, this is one reason: different positioning, different people.

The second reason is that we need to have sufficient motivation. First of all, the contract trading platform is now very competitive, so we need to have sufficient development funds to participate in market competition. In addition, we also need sufficient sustainable mining space to provide incentives.

If the two platforms are integrated, we must allocate part of the sustainable mining of the spot trading platform to the contract platform. In addition to the different user groups mentioned earlier, this will result in unreasonable and difficult to reconcile. The internal game makes our development in both aspects affected. So ecological expansion is the best choice.

Q9: What is the relationship between FMex and FCoin and FT Ecology? What is the relationship between contractual transactions and the “future financial and economic infrastructure” that the future FT public chain points to?

A9: FMex and FCoin are parallel relationships and are an important part of the FT ecosystem . The FMex contract exchange is an important part of the FT ecosystem, and its certification FMEX will be issued based on the FT public chain. Committed to the construction of the "future financial and economic infrastructure" FT public chain, the various assets issued by it naturally have financial attributes, both the demand for spot trading and the broader market for derivatives trading. The development of future contract exchanges and the development of the FT public chain will promote each other and aim to build a “future financial and economic infrastructure” to jointly promote the development of the entire industry.

Q10: FT Eco recently released a lot of new moves, public chain, FFUND, FI, FJ and FOne, which has always been the focus of attention. How does the team support so many businesses?

A10: FMex and FCoin are parallel relationships and are an important part of the FT ecosystem. The FT public chain has always been an independent team and the core of the FT ecosystem. The fund manager of FFUND is the FT community, the management partner is the consensus laboratory, and is also an independent team. The FI project is undergoing restructuring and will be part of the FT ecosystem once the restructuring is completed. A professional and independent team is being formed. FJ is the first attempt of FT ecological internationalization. After completing the deep-opening, FT Eco will also promote the community-based governance of FCoinJP to the right track and complete local expansion.

FOne's spin-off is still in progress, and will be followed by a community-based exchange with merchants at its core and “business autonomy”. The FCoin platform still provides technical support.

In summary, we can see that these are not completed by “one team”. If “ecology” is not well understood, everyone can understand it as an “alliance”. So there is no question of how the current team supports so many businesses. The problem is that if you let each innovative project find the right path and method of development faster, it will evolve faster.

Q11: FMex proposes community governance, in which areas will the community play a key role? What kind of competitiveness does a community-based governance bring to a contract exchange?

A11: Community governance is one of FMex's four-point platform features. The first thing to understand is why do we want community governance? This is a question of ownership level. If it is a private company, it is the CEO or the board of directors has the final say, only to serve minority shareholders. The company's decision-making can be directly determined internally.

But we believe that all platform-level business organizations must be community-oriented because all your decisions will affect your users. If the users of the platform do not have the right to speak, it is likely that the various decisions of this business organization violate or even harm the interests of the platform users. In a free market competitive environment, you hurt the user and the user votes with his foot. Your core value is the user. The user has no right to speak for a long time, which will definitely lead to the bottleneck and challenge of the platform, which makes it difficult to prosper.

The competitive advantage that community governance brings to a contract transaction is to let the users of the platform truly participate in the decision-making of the platform development. We design users to be the owners of the platform through a number of mechanisms including sustainable mining. At the same time, through community-based governance, the platform is developed in a direction that benefits the interests of users, rather than serving the private interests of a few people.

This is also the essence of the general economics that I believe: the true integration of the owners and users of the platform. You may not have a specific concept of community governance. I can take FCoin's practice as an example. Today we have just launched the FCoin White Paper 2.0 update community referendum, a white paper initiated and completed by the FCoin community. I believe that there is a milestone in the history of FCoin and even in the history of blockchain development. This is one of the fruits of FCoin's community governance.

Since August last year, the FCoin community has produced 305 proposals, passed more than 50 major resolutions, including FT to stop additional issuance, differentiated fees, and sustainable mining are all from community referendums. So, who is this FCoin? For the community, the answer is self-evident. I also hope that FMex will be like this in the future. You can wait and see.

Q12: FCoin's success stems from “transaction is mining”. FMEX is like an enhanced version of FCoin. You said in the past few days that “the most fundamental goal of FT public chain is to solve the problem of how to divide the cake.” Overall, FT The focus of ecology seems to have always been the economic model, that is, how to divide the money, is this the case? What is your thinking logic? In addition, will FMEX have measures to check the behavior of robot high-frequency trading?

A12: This question, I think if you understand the mechanism of Bitcoin, or read my book, it should be easier to understand.

The success of Bitcoin is not only the success of technology, but also the success of economic system design. This has already penetrated into the blood of the blockchain. Without a good economic model, pure dependence on technology cannot achieve true "autonomy."

So returning to this problem , the focus of FT's ecology is to use technology to promote the company's evolution to the community and promote the transformation of production relations. It is a question of how to divide the cake, that is, to solve the problem of production relations. In this regard, I have talked at the FT Eco-Conference, and I am interested to go and have a look.

Regarding the problem of robotic high-frequency trading, the contract exchange and the spot exchange are completely different. For example, the 100-fold leveraged sustainable contract on BitMEX is very exaggerated. At this depth, pure brushing is very difficult, and it is definitely necessary to participate in the transaction. As long as the normal participation in the transaction is part of the trader, if there are some abnormal behaviors, we will study how to solve it later.

Q13: The amount of funds raised by FMex is 30 million US dollars. This amount is more than the previous period. What is the reason?

A13: The amount of USD 30 million may be slightly larger than the IEO project of other exchanges before, but in fact, it is not a large amount of fundraising in the entire blockchain industry. For example, everyone should know the scale of EOS fundraising. Here I want to highlight a few points:

First, the $30 million looks absolutely not small, but we share 30% of FMEX for investors, a ratio that is a large percentage relative to early investment;

Second, the overall valuation of 100 million US dollars does not seem to be small (of course, it is not too big in the blockchain industry), but everyone should consider that this is a huge profitable space, and will be launched soon. Contract exchanges, far from the general "do not know where the value is, do not know whether the long-term (many are more than 1 year) can smooth the main online line" ordinary public chain projects can be compared;

Third, another data that can be referenced is that FCoin's private placement valuation before the launch is also $100 million, but FCoin was not online at the time, no one user, this state is far from being able to be based on FMex now. The FT ecology of the big community base can be compared.