ICO Analysis: XTrade (XTRD) Token
Xtrade is looking to become the de facto trading platform for large institutional investors in the cryptocurrency markets. Xtrade are developing a API and professional trading platform that will allow users to access multiple exchanges and perform complex trading operations.
- Established fintech technology, adapted for crypto markets.
- Addressing fundamental issues in security, speed, access and usability.
- Heavy finance/marketing focus, lacking crypto experience.
- Use case does not require a Utility Token.
[Xtrade's] goal is to build trading infrastructure (software and hardware) in the crypto space and become one of the first full-services shops in the cryptocurrency markets for large traders and funds.
Xtrade (XTRD) ICO Fast Facts
- ICO Crowdsale Start Date: 10 February 2018
- Maximum Discount: TBC
- Platform: ERC-20 Ethereum, Utility token
- Amount Raised (Valuation): $45m USD, 50% of token supply. $0.10 per token, pegged to USD (estimate 1ETH = 10,000 XTRD)
Xtrade (XTRD) Utility
XTRD is an ERC-20 utility token used to access a crypto trading platform. This platform has been adapted from APIs used in traditional fintech markets. Xtrade aims to modernise the way we trade cryptocurrencies and open up the market to institutional investors.
In terms of "utility", the XTRD serves little purpose except for gaining access to the crypto-community and trading on the hype that ICOs generate. Alex (Xtrade CEO) commented " We found that raising funds via a token sale would be a great way to expose our brand and products to the crypto community, and having them engage with us by purchasing tokens to use on our platform, especially institutionally, would be a great way to do so as well. We wanted to actively engage with the community to solve for pain points accurately. "
The platform (outlined below) does address some major issues that we see in the crypto-markets and on exchanges, but most of what they are doing could be done without the use of a token. Arguably, blockchain and tokens are not conducive to trading operations (slow, expensive, etc) and hence there is no utility case. The token will allow Xtrade to achieve friction-less payments without having to deposit funds as Xtrade is not an exchange.
Rather than being an exchange, Xtrade will be the ‘pipes’ that move the money and assets to/from exchanges for users. Their 3-stage plan starts with the implementation of an API that will be a ‘universal language’ for interacting with the 50 plus exchanges from one central location. This is based on the Financial Information eXchange ( FIX ) protocol used in traditional markets. Stage-2 will be the launch of a professional trading platform which will be more robust, secure and have more technical trading tools currently offered on exchanges. The final stage is Single Point of Access Liquidity aggregation. This ensures that traders get the best price and the lowest cost by searching across all exchanges.
The key issues identified by Xtrade that they wish to address are:
Complexity of exchanges: each exchange has its own KYC requirements and security verifications. It can be a long and painful process to get approved. Xtrade will be a ‘plug and play’ with an API that: reaches all exchanges (either partnerships or they will have an account and execute trades on behalf of individuals), can execute complex trades and has greater security benefits.
High fees: a long running issues in the community is the cost of transactions. Cost vary and are determined by each exchange. Xtrade will reduce costs by moving trades off the blockchain which is inherently slow and costly.
Liquidity and stability: Cryptocurrency is currently highly volatile and subject to massive fluctuations. One reason for this the lack of liquidity which means that a big buy/sell order can greatly shift a price on an exchange. By connecting all the exchanges together, Xtrade will help to stabilise prices by parcelling out orders across multiple exchanges and offering more complex trading commands to mitigate large fluctuations. This will also close the spread across exchanges that Xtrade states can be as much as 500%.
Speed: Operating from a API on a server will mean that speed will be exponentially improved. This is quicker than general internet connection and will enable high frequency trading. Traders can upload strategies and let them execute on the high-speed, secure server.
Xtrade wants to become the de facto trading platform for the large financial investors. In time, they will generate revenue from execution fees, market data sales, VPS services and software licensing. To encourage people to hold the XTRD token, discounts will be given on transactions and perks/benefits will go to those who consistently hold over 50,000 XTRDs.
Xtrade (XTRD) Team
The Xtrade team comes from a traditional stock market background. They aim to leverage this knowledge of FIX, APIs and modern market operations to improve what is available to crypto raders. There are some question marks about the team and their experience (highlighted in a steemit article here ). The team has addressed most of the concerns and below is a quick summary of the founders.
- Alexander Kravets Founder – Alex is the face of Xtrade and operates as the CEO. He is a savvy marketer and presents Xtrade’s story well but has only been in crypto since ‘late spring 2017’. While this lack of experience isn’t a deal breaker, their advisors appear to be majorly skewed towards marketing and finance. I can understand why the above-mentioned article was dubious of the project - it seems to be trading on the hype of "crypto" and "blockchain". Alex has brought together a team of the finance ‘old guard’ to help point the way forward and will draw on his financial sector experience and connections.
- Sergii Gulko CTO– Sergii comes from a technical background and will be build the FIX project with his team at Axon Software. There is a lot of personnel crossover between Xtrade (Sergii is CEO) and Axon which focuses on Trading Apps. Axon has been around for 10 years and operates out of the same office as Xtrade (WeWork Office). I always think it is good to work with an established team who know each other for any large scale projects.
- Jon Giacobbe COO– Jon has a history in the financial sector (ended in 2012) and then has been associated with various small businesses. He is a ‘Crypto advisor and influencer’ but I can find no record of him on any other crypto projects.
The team and advisers have lots of experience in the finance sector and appear to have the technology to adapt their API from fintech to crypto (I understand there is a patent pending as well). The question will be if they can translate this experience and technology into the crypto-space effectively.
XTRADE Digital Holdings in located in the Caymans. Digital assets INC. is a Delaware based consulting company co-owned by the founders and is the US component.
Xtrade (XTRD) Roadmap
Xtrade plan to roll out their 3-stage strategy across 2018, aiming to have SPA up by Q4 of 2018. The token presale starts on 10 February, with the details to be confirmed shortly. It will be a busy year for the Xtrade team:
- Q1 2018 – Token generation
- Q1 2018 – FIX API
- Q2 2018 – Xtrade Pro Alpha
- Q3 2018 – Xtrade Pro Beta
- Q4 2018 – Single Point of Access
Critical to the project is the integration or connection with other exchanges. They have announced a partnership with CME Group and CEX.IO but I would like to see more information behind the development of partnerships and timelines. The more exchanges they can integrate, the more valuable the project will become. Note that Xtrade can write exchange APIs and leverage customer's own account to execute orders. They do not necessarily need the partnerships.
It would also be nice to see when the revenue generation channels will come online and when the project will become self-sustaining. The Xtrade team believe that by the second half of 2018 they will be self-sustaining which is excellent news.
Xtrade (XTRD) Value
Xtrade have set a hardcap of $45m USD and will release 50% of token during this sale. At $0.10 USD per token, 450,000,000 tokens could be generated with an overall supply of 900,000,000 XTRD.
Given that crypto market participation has not broken into the mainstream and institutional investors are only just getting on board, there is massive potential to be the conduit that brings traditional market money into the crypto space. Being first to market is an excellent advantage and if the technology is solid, adoption will follow. I believe that there is a lot of money yet to come into the crypto space and if Xtrade can prove their technology and show inroads into exchange partnerships, there is a lot of growth in this project.
As far as driving token value, holding the token to access discounts will help to moderate supply. If the platform is successful in attracting retail and institutional investors, the XTRD will logically increase in value. Signing partnerships with exchanges should go a long way to attracting traders.
Xtrade (XTRD) Transparency
The Xtrade project is relatively transparent. Some information has been difficult to find (e.g. the $45 million hard-cap is not mentioned in the whitepaper, nor are dates and info on crowdsale on the website) but most critical information was there and the whitepaper was quite explanatory. I reached out to the team on telegram and they were able to answer most of my questions, albeit slowly. I corresponded with the team through email as well with some follow up questions for my research - mostly around the utility of the token.
From a branding perspective, there is a website https://www.xtrade.com.au/ which is a CFD/FX trading platform (now also doing crypto) which could cause some confusion in the space. This is also the case of Github where there is a few "xtrade" listings but none of them seem to be about the XTRD token. Some of the questions raised in the Steemit article are probably the result of Xtrade overmarketing themselves and the project but there is substance and technology behind to what Xtrade is doing.
Vesting timelines for advisers and the team are not in the whitepaper or website but are 180 days.
Xtrade (XTRD) Distribution
Xtrade will distribute 50% of their tokens (up to $45m USD hardcap) during the presale. For every 1 token bought, 1 token will be generated internally. The majority will go towards a ‘reserve’ to generate a liquidity pool. The liquidity pool will cycle crypto assets between exchanges on the blockchain to effectuate settlements.
- 50% token generation
- 29% Xtrade reserve
- 10% Team
- 10% Advisor Pool
- 1% Bounty
The team taking 10% is standard, but an equivalent 10% to advisers does seem high.
Xtrade (XTRD) Summary
Xtrade could break down the walls and open up Crypto to large investors and funds. They are trying to address real problems in the crypto space by adapting fintech technology to improve on inefficiencies felt across a highly fractured marketplace. I look forward to seeing the platform in action as I think it will vastly improve on current offerings.
As a concept, the Xtrade platform is solid; however the question is, does this require a utility token? From conversations with the team, it seems the primary goal of XTRD is marketing and exposing Xtrade to the crypto-community.
Given this ICO is pitched at institutional traders, it may not be affordable for a retail investor to use Xtrade. I have had conflicting comments from the team on affordability but I think cost will be based on whether you are using a basic API (retail investor) or a highly sophisticated API (institutions).
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He does not hold any tokens and has not participated in the private or public sales.
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