OnTrade CEO Jack Li : How will contract for difference(CFD) affect the cryptocurrency market?

    2019/05/07 08:48 Maxwell huang Created with Sketch.
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Introduction OnTrade want to have a contract for difference (CFD) market that is structured, settled, and treated all in bitcoin.

The Takeaway:

  • OnTrade is different from the traditional cryptocurrency exchange platform. It is an Electronic Communication Network platform which is an aggregation of institutional players.

  • OnTrade wants to have a contract for difference (CFD) market that is structured, settled, and treated all in bitcoin.

  • There's no way to short the project even if you know it is fake and is being manipulated now. The contracts for difference(CFD) will do it.

  • Who is most likely to be beneficial or most quickly adapt to regulators rules and guidelines?The banks, financial institutions such as stock exchanges, commodities exchanges and so on.

During the cryptocurrency hysteria in 2017, a flood of blockchain projects are launched to fundraise. But there were many low quality even fake projects. There is also a lot of obvious price and market manipulation in the digital asset space. But there's no way to short the project even if you know it is fake and even if you know it is being manipulated.

"The contracts for difference(CFD) will do it." OnTrade CEO Jack Li told Jinse Finance & Cointime at the 2019 Chain Plus Asia Pacific Blockchain Summit on April 11.

What does OnTrade want to do? Jack Li told Cointime that OnTrade want to have a contract for difference (CFD) market that is structured, settled, and treated all in bitcoin.

Jack Li told Cointime that OnTrade is different from the traditional crypto exchange. OnTrade is an Electronic Communication Network platform which is an aggregation of institutional players. So OnTrade is more like as an institutional platform, on this platform those exchange's customers can freely transact volatility, risk and exposure amongst themselves in a way that is more predictable and more transparent. OnTrade provides products and services to the exchanges so they're able to offer higher quality products and services to their customers.

Jack Li said that one of the goals of OnTtade is bring genuine price discovery to the industry. there is no traditional infrastructure as in traditional markets, so there's no way for you to short the project even if you know it is fake and even if you know it is being manipulated.contract for difference (CFD) is the just tool that investors can short or long a project.

Who is most likely to be beneficial or most quickly adapt to traditional regulators rules and guidelines? Jack Li sai tht it would be the guys who are ready under the rules and guidelines of regulators, the banks, the nonbank financial institutions like stock exchanges, commodities exchanges and so on.

Jack Li thinks that it will take at least five or ten years for digital asset exchanges to be up to the same level of standard in terms of transparency, audit and regulatory compliance. Then crypto exchange is becoming more like stock markets.

The followings are Q&As:

Cointime: could you introduce yourself a little first?

Jack Li: My name is Jack Lee, CEO of OnTrade, basically it's a P2P contract derivatives structuring platform.

Cointime: Why are you choosing to enter the exchange industry now?

Jack Li: topically I think what OnTrade does has a lot of the shared functionality of traditional exchanges. But really what we are is an Electronic Communication Network. Our goal is to be able to provide products and services to the exchanges so that they're able to offer higher quality products and more relevant services to their own customers.

Cointime: How does OnTrade get new users and promote yourself in the market?

Jack Li: Our goal is to enable our customers' customers to freely transact volatility, risk and exposure amongst themselves in a way that is more predictable and more transparent, better than how things are currently. We want customers to be able to actually get the value they believe their portfolio is worth at the price that they think it is fair, with the level of transparencies that are very difficult to know currently in the existing infrastructure.

We believe that our product will speak for itself. And our partners will also be able to attest to the value of OneTrade as we begin working with them and start hashing out over time.

Cointime: There are so many exchanges now and what's the most different from OnTrade and them?

Jack Li: There are many exchanges in operation and a lot of them look like exact copies of one another. Our goal is not to be another copy and try to compete with the existing players for their existing customers in the space. Our goal is to actually augment our differentiated know-how. In terms of my team, we are a team of very senior financial services professionals from tier one investment banks,  and a team of very capable technicians, developers, from some of the largest futures and commodities clearing houses in the world.

We're also backed by some of the most well-known blockchain projects and venture capital firms in this region as well. What we need to do is to aggregate this knowledge to experience and to build and create new products and new solutions for the ecosystem.

Rather than trying to say we're just going to have a bitcoin market so people can come and buy and sell bitcoins, instead we're saying is that i want to have a contract for difference (CFD) market that is structured, settled, and treated all in bitcoin. But the underlying reference could be something super esoteric, for example, I have a contract for mining hedges, bitcoin mining contract against the bitcoin networks that is difficult to change or even the hash rates or the hash of grin or the hash of ether. the underlying is very dynamic and flexible. Our objective is to create a backbone for the product structuring side so that people can come and transact freely and monetize liquidity in either directions.

Cointime:  What's your wish to change the whole industry?

Jack Li: Our goal is to bring genuine price discovery to the industry. We generally believe that there are a lot of projects that came up in 2017, there are less genuine and they raise some money, but currently there's no good way of really differentiating real projects from less real projects other than speculation or research online. That's very difficult to actually ascertain.

So our goal is to create a platform where people can freely determine the value of an underlying asset that will hopefully derail some of the pillars of price manipulation and obvious market manipulation that we see in the digital asset space today.  The main reason why a lot of people are manipulating prices upwards is that they can sell it secretly on the side.  but there's a cost associated with that. when you don't have traditional infrastructure as you see in traditional markets, there's no way for you to short the project even if you know it is fake and even if you know it is being manipulated.

So what we want to create is an analog to the physical market in the synthetic space. Where when you know a project is probably less genuine, you have the option of acting on that sense and vice versa. If you see a project that is very good and you believe in the mission, but it's very difficult to get participation into the project because either there's a limited quantity of tokens in circulation or the tokens are sold out. We want to create an avenue for you to be able to participate in either direction in projects that you want to participate.

This is what the contracts for difference(CFD) does very well. basically, as long as somebody has exposure to a project, it doesn't matter what it is. It could even be unreleased tokens like polkadots, telegrams, whatever, as long as somebody who has exposure to it and has a wish to monetize a portion of it, they can come on the OnTrade platform to partially modify some of that exposure without actually having to worry about physically delivering the underlying tokens because everything is settled in bitcoins.

Cointime: STO is very popular these days, how do you think STO?

Jack Li: STO is definitely the next iteration, it is not for crypto exchanges, but more for traditional capital markets exchanges.  for example, I think stock markets will be very active in upgrading their system and incorporating a lot of the elements that we see in the distributed ledger and crypto exchange is becoming more like stock markets.

And the reason behind that is stock markets and traditional markets are under a lot of government regulations. It will take at least five or ten years for digital asset exchanges to be up to the same level of standard in terms of transparency, audit and regulatory compliance, although the industry is definitely moving in that direction.

If you look at who is most likely to be beneficial or most quickly adapt to traditional regulators rules and guidelines, it would be the guys who are ready under the rules and guidelines of regulators, the banks, the nonbank financial institutions like stock exchanges, commodities exchanges and so on.

Cointime: Do you consider to have an IEO on your platform?

Jack Li: Our current business model is designed to provide services to our exchange partners.  so to the extent that there is a lot of demand from the retail side from our exchange partners,  we will create solutions based on the needs of the market. For the time being our core objective is to be providing immediate solutions that are needed in the current ecosystem.

Cointime: How will the price of bitcoin go in the rest of the  year?

Jack Li: It's hard to predict it on the short term. But what I do believe is time is friend of any quantified limited assets as long as there's a demand. It's going to be upwards. People are always going to lose their private keys even exchange accounts, so the circulating supply is diminishing at a certain point, and giving the recent fluctuations in the coin space.

I think mine is also becoming less attractive as a business avenue. So I do believe that as fewer people are rushing into this mining space and participating in that way, it will bring a little bit more stability and more predictability. But under the short term it is very difficult to ascertain.

    Adapted from: Author: Maxwell Executive editor: Maxwell
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