The derivatives are the new buzzword in the trading of Cryptocurrencies like Bitcoin, Ethereum, Stellar, etc. Unlike normal cryptocurrency exchanges where you take delivery of crypto assets, the cryptocurrency derivative exchange allows you to trade in derivative products like Futures, Swaps, etc. which has crypto assets as underlying assets.
I managed to speak with Jack Tao (CEO) of Phemex Exchange and Cecilia (CMO) on the future of Cryptocurrency Derivatives Exchange and some insights about their platform too.
Me: It’s great to have you with us! Please walk us through your unique idea behind Phemex?
Jack: Thank you, NewsAffinity. Really happy to be here. Phemex’s mission is to empower everyone to efficiently manage risks and trade simply. We are building a bridge between crypto and the traditional financial world. The idea is to allow clients to invest financial products through cryptos under a perpetual contract framework. BTCUSD perpetual contract is one example. We are going to list the S&P contract and many others this year.
Me: Mr. Jack, you have worked for almost 11 years at Morgan Stanley. What actually made you start Phemex? Who is your inspiration?
Jack: I got hooked by bitcoin and blockchain right after I read Santoshi’s white paper in early 2017. Shortly after I experienced the boom of Etherum, ICOs. I purchased my first ETH at ~$4 in Coinbase. I worked for the Morgan Stanley MSET business for 11 years and it is almost an instinct that I found this new platform in the future. It allows you to transfer values instantly.
Exchanges will play a critical role in this industry just like the history of the traditional finance system. At that time, although there are lots of exchanges in the world, none of them are good enough in terms of service, product design, system performance, security, etc. Flash crashes, overloading, hacking happened in almost all exchanges. I found those exchanges all in very early stages and run into the problems that already had good solutions in traditional exchange and brokers like Nasdaq and MorganStanley.
We realize this is an opportunity. Phemex co-founders plan to have our own shop in 2017. We witness the rise of Binance, Coinbase, Bitmex, and many other pioneers. We learn from them. It was definitely an exciting year in crypto history. After about 2 years of preparation, Phemex is borned in July of 2019. When my partner called me on July 4th: “Jack, everything is ready”. I convinced my wife to sell our apartment and car and to move to Asia. I quitted my job and landed in Asia on July 29th. We know exactly what we are doing and we know we can do much much better.
Me: Jack, our audience wanna know what distinct features you are bringing here and why do you think these gonna change the way people do perpetual contracts?
Jack: Perpetual contracts are easier to understand than FUTURE contracts that have mature dates. In the crypto world, each contract is small enough to allow almost any user to invest. Bakkt, CME contracts are too large for small investors. Bitmex is the pioneer for crypto derivatives. They borrowed the idea of swap products and created the first XBTUSD perpetual contract. We extended this idea to not just cryptos but also to traditional financial products. Users with an email address and bitcoins will be able to invest in any financial product with low entry capital. We believe this is the true power of cryptos give us. Perpetual contract plays an important role to realize it.
Me: Cecilia, it’s our pleasure having you here. Please tell us about your journey as a Marketing Professional and what excited you to work on this project?
Cecilia: I have run a marketing research business for 6 years serving top consulting firms and PE/VC institutions around the world and providing professional marketing advice. With the Phemex team, I feel its strong enthusiasm and professionalism to make a great product. I’m very proud to work with such a world-class team and feel confident to promote our platform to crypto traders.
Me: Cecilia, from a marketing point of view what is the most challenging thing for you? How are you planning to acquire more users (traders)?
Cecilia: The most challenging thing for us is that Phemex is a newcomer in the market and there are already several big players in the pool. So people always ask “Why Phemex”? Actually, Phemex provides an incomparable trading system with high frequency, low latency, and no downtime. It’s not just a big talk. We will launch a marketing campaign for the live demo of our trading system to show the public that our trading engines can be scaled up easily. Meanwhile, we will host a couple of geek competitions with generous rewards on our social media platform to attract users who enjoy the intellectual challenge and who are also our target audience.
Me: Sustainability isn’t easy to put up with, especially if you are trying to capture a bigger market sphere! So Jack, How do you plan to handle the challenges that might come your way throughout this process?
Jack: Company culture plays a critical role for the long run. Phemex team is formed by different background founders but we all have this common consensus. Modern entrepreneurs have to be fast-learners, be truly cooperative (inside and outside), support diversity, always do the right thing and keep the fighting spirit like wolves. These are reflected in Phemex’s 4 core values: Client first, improve every day, support each other and give back.
With a cool team that shares the same value, nothing cannot be done.
Me: So, according to you who are your biggest competitors? And How are you planning to set foot in this bad market?
Jack: There are lots of big players in the market right now, like Bitmex, Binance, Huobi, Bybit, etc. Different companies at different stages have different challenges. They all have issues here and there. Phemex solves lagging, overloading and security problems that trouble those companies. Technology-wise we believe we are among the best already.
The biggest competitor is Phemex itself. We believe cryptos have more potential. Our focus will still be improving our products and attract more users into this new financial system. There are thousands and thousands of banks and exchanges in the world, crypto exchanges just started. There is lots of work to do together to make the system better.
It is hard for me to conclude the market is bad. The price and volatility of bitcoins doesn’t represent everything. As we can see more and more investments have been made into good projects and researches into cryptos and blockchains. If everyone wish something to happen, it will happen. The legacy problem in the old financial world needs to be evolved. Blockchain provides a potential solution which deserves this generation to fight for it.
Thanks, Jack and Cecilia for being with us today. It was fun and inspirational at the same time to speak with you guys. Also, there is a special announcement for our audience that, Phemex is having an amazing “Phemex Welcome Bonus” where you can get up to $72 from Registration Bonus, Social Media Bonus, or Funding Bonus.