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BackThis time Kevin talked about funding, margin trading, TRAM and other exciting things.
Check out our weekly “This Week in Crypto” summary in our blog post or watch the full video here.
Crypto Market News Highlights
1) Binance Reveals ‘Venus’, Aims to Dominate National Stablecoins
Riding on the coattails of Libra which is not a stablecoin. It is a hedge fund modelled as a central bank. A tokenized, privatized, national bank, with a hedge fund element. It’s not a stablecoin.
Stablecoins have specific use cases for settlement and clearing, and there will be more and more stablecoins. Eventually there probably will be a standard. It will not be coins created by Binance.
2) Luxemburg Financial Firm, Black Manta Capital, Receives BaFin License to start offering STO’s
There was one key aspect in a press release that basically said that the tokens were giving rights to the underlying asset. It’s a depository receipt, not natively tokenized asset.
Doesn’t solve cross border, doesn’t solve liquidity, doesn’t solve any of the issues that tokenization can solve. It’s simply taking the already existing problems and putting them on the blockchain. A lazy solution, and we’ve seen it many times before.
3) New York Supreme Court Denies Bitfinex’s Lack-of-Jurisdiction Claim
No brainer. The US has jurisdiction anywhere it wants to, because as long as they can show that there’s a possibility that a US person was involved in an activity where no license was held – US has jurisdiction.
So, that claim was going to get thrown out anyway. Bitfinex, Tether, – all these guys, it’s going to be a long couple of years for them. There will be appeals, people might be getting arrested.
4) Cryptopia Liquidator Updates Stakeholders, Return Of Funds May Take Long
No shit. When funds get locked up, even when they’re available, you’re talking 3-5 years at a minimum to get them back. And you won’t get a 100% back. Almost never.
Strap yourselves in guys… and again, people think this demonizes regulation – but this is exactly why regulation is needed. Regulation can be cumbersome, shitty, put a lot of roadblocks for the entrepreneurial spirit, but it also filters out a lot of the shit.
If regulation had been in place, Cryptopia would probably never have been opened.
5) Tether are set to launch a Chinese stablecoin
They like printing money out of thin air, so printing some Chinese money out of air sounds like a good idea, why not.
Live YouTube Questions
What’s new on funding?
Still in talks with the guys from Brazil. Kevin was supposed to be in Berlin for the Web3 Summit, but missed it – but one of our colleagues was there, so there’s a few meetings/phone calls set up for next week on funding.
Meeting in the UK, probably in the next 2 weeks.
Brazil moving along. These things always take a bit longer than you expect. Last conversation was mid-week, and 7-10 days to finalize everything. That was roughly two days ago.
How is the debit card coming along?
Still waiting on the layouts from the card printer, so that we can actually adapt designs for those. As far as getting the project pushed through, on the supplier side: haven’t actually had the conversation yet.
What can we expect to roll out in September?
TRAM, API (most likely), liquidity for tokens, the XCM utility integration, lots of different fixes.
We’re also working on some new designs for what will become the Express platform, as well as the Pro platform which is a merge of Margin/Trade. Express is the new Intermediate. All those aren’t coming out in September. We may see that Pro platform towards the end of September.
When is Margin Posting coming?
Will be after TRAM. All focus is on TRAM and the IEO preparation on the CoinMetro Direct platform.
TRAM is Token Asset Management, right?
Yes, it stands for Trade Mirror. A manager creates a portfolio and you’re able to mirror that portfolio on to your account, and then exit/enter at your will, and the manager is only paid on performance, on a high water mark principle – only on new performance that goes above previous highs.
Who are the traders that will be offering services on TRAM?
We have two funds/crypto algorithmic funds that are looking to launch on the TRAM platform once it’s available. Each company has more than one algorithm.
We’ll probably do a soft launch where we’ll allow investors to come in and allow the algorithms to trade for a specific amount of time, and let them make a bit of money, then we’ll open it to the public. Maybe offer it on demo version.
Burn rate for XCM?
Will depend on several factors. We can’t release the formula to the public, because then people would be able to speculate on the exact amount being burned and taken out of circulation. The formula will vary, and will burn from a low percentage to a very high percentage (~50%).
ETA on burn rate implementation?
Will happen after TRAM/API release. Currently being implemented into the sandbox.
Who’s going to do the bulk of the marketing for the IEO? CoinMetro or PARSIQ?
The bulk of the marketing is done by the issuer. CoinMetro will help where we can, adapting information, internal marketing, and we’ll help where we can as far as external marketing. Part of the way we do this is that we do take a certain fee, where part of that fee is spent on marketing.
Any news about the next 3 tokens?
We actually submitted 4 or 5 tokens. Tried to reach out to LHV today, but our main contact is on vacation. The other contact was in meetings. Assuming that it was not brought up in their weekly risk meeting, probably won’t be until next week. PARSIQ being one of those.
How’s the hunt for head of marketing going?
Hunt’s still on. We’ve got a lot of resumes, some of them were just instantly chucked into the digital recycling bin. Others are going through a process.
Still ongoing, we’ve had some good candidates, but we want to be sure that we pick the absolutely best for the position.
How are things progressing with Montenegro?
Waiting on the final version of the framework. Once we do that, we give the final yes/go ahead, then we’re going to be presented with the application guidelines which we’ve already seen, and then we’ll submit the application for CoinMetro.
Possibly before the end of the month we’ll submit the application.
Has the price discovery among exchanges gotten any better the last year?
No.
How many devs are working at CoinMetro?
We have five.
Any plans on increasing the 1:3 on margin trading?
1:3 on margin trading – the plan is to raise it. Right now in Europe, crypto is not fully regulated. Other markets are, and have other regulations they need to follow, like ESMA regulation.
If we look at ESMA, you’re limited to 1:25 leverage for retail traders, on FX for example. So, we likely will never go above 1:25. Main reason is that right now it’s not enforced, but it definitely will be at some point. 1:5, 1:10 in the near term is possible. We still don’t have enough data to really see where the risk lies on our side in terms of negative balances. We need to see more traders to get more data, then we can make a risk assessment.
What is the ratio of revenue to expenses?
Way on the side of expense right now. Our burn rate is still around €100k per month. Last month’s numbers, probably in the low percentage – single digits or very low double digits, depending on what we did on margin trading last month.
The margin trading, which will be directly affected by TRAM, is definitely where we’re going to start seeing a pickup in revenue, that’s for sure.
What if you run out of money?
An FXPig analogy: just like most startups, the first year or two had many, many months were we didn’t have money to pay bills. We cut back, we scaled back, no salaries to anyone (we had a much smaller team). If CoinMetro ran into a situation where we didn’t have enough money to pay its burn rate, we just make it work.That’s it.
How big was the Brazilian investment again?
Phase one: to CoinMetro, half a million.
Phase two: everything that we’ve been looking for.
How is the new website coming along?
Almost finished most of the content, a little more to go, then it will go through some additional tweaks on the image and development side and then we’ll start pushing it through to get it actually coded.
You spoke about big companies opening exclusively for their specific products. Would you try to get some of these companies to partner up with CoinMetro?
Why not. They’re going to need technology. These big companies, even though they have the money, they don’t necessarily create everything. They buy it, and take it over. Like Facebook: Instagram, WhatsApp.
These companies will look to buy technology, and partner with other entities. So of course we would look to do partnerships and business agreements. Especially those that aren’t yet Fortune 100, but are big enough to make a big difference for enough, and maybe too small for other people to be looking at them.
Reddit Questions
Great show and volume on Tuesday, 1 million XCM market sell and immediate recovery. I was wondering if you have any insights to what extent XCM whales have emerged – besides team, investors and Reme?
We’ve actually seen people come in and deposit tokens who didn’t buy them on the CoinMetro exchange. Definitely some trading happening outside the platform.
When it comes to whales: there’s been – full disclosure guys – there’s been one minority shareholder that cashed out some XCM. A minority shareholder that holds less than 1% of the company, one of the initial shareholders almost 5 years ago, when CoinMetro wasn’t even CoinMetro. Aside from that, there hasn’t been sales from shareholders, team members or employees.
So PARSIQ IEO is delayed. Which project is next and by when? You mentioned several projects being lined up and monthly IEOs. Can we expect No2 by mid-September?
The IEO itself isn’t delayed. The announcement is delayed.
PARSIQ will be the first project on our CoinMetro Direct platform. The following IEOs were debating as to launch sequence, so we don’t know yet which one will be next. But it wouldn’t be in September, it would probably be towards the end of October into November.
Doing one per month isn’t set in stone, it just shouldn’t be less than once per month.
Referring to the other question regarding the user numbers: still exponential growth? Looking at volumes and community activity looks more like stagnation.
There’s still growth in terms of new users. Exponential growth tends to happen around the release of new services. Talking about volumes – same volume fluctuations you are going to see even at larger exchanges. The difference is that the numbers are so large, when you see 1.2 billion and 855m the next, it kinda gets overlooked.
You saw the news on South Korea – 200 exchanges going bankrupt. I guarantee you everyone of those exchanges on CoinMarketCap has a lot of volume.
“Kevin Explains Crypto” Term: DAO
“DAO” means Decentralized Autonomous Organization. Autonomous means it’s automatic, it can happen without physical input. Basically an organization built inside a smart contract. Governance of that organization for meetings, making decisions, is controlled on a blockchain, and the information instead of being in a paper registry, is registered in a blockchain.
Want to know more? Check for more details in the video below.
Listen to Last Week’s TWiC on the Go
Get the complete scoop by tuning in to our audio version of last week’s TWiC on SoundCloud. Happy listening!
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Well, that’s it for this week’s AMA with CoinMetro Founder Kevin Murcko! Please join us next week on CoinMetro’s Facebook and YouTube Channel at 12:00 (UTC) for another round and make sure you submit your questions to the CoinMetro subReddit!
As always, we’re available to answer any questions you may have on our Telegram Group 24/7.