B2BX is an exchange aggregator of cryptocurrency liquidity for important clients. CoinFox discussed the central idea of the project and the coming ICO with Artur Azizov, the CEO of B2BX and learned why in the near future cryptocurrency exchanges would become less popular than cryptocurrency brokers.
- Artur, tell us about the main idea of your company, B2BX.
B2BX is a branch of B2Broker. The B2Broker allows creating a ready-made broker venture. Few years ago Forex broker was the most popular service of them all but the society finally realized that Forex brings less revenue than cryptocurrency. No matter what people say, the blockchain today is much more about investments and trading than about the technology itself because up to this moment there is no serious industrial implementation of the blockchain. That’s why we took a decision to pursue a pragmatic task: to give everyone willing a possibility to easily invest in any crypto asset.
Our new project is an exchange aggregator of cryptocurrency liquidity for marginal and exchange trade. We plan to create the first official cryptocurrency aggregator for important institutional clients. Only professional players in the market such as brokers, hedge funds, banks and cryptocurrency exchanges will participate in this platform.
Traders and investors will be able to come to this regulated marketplace and choose as a broker any approved participant of this exchange following different criteria – marginal trading or cash trading, exchange with delivery, trading platforms, licences, methods of money input and withdrawal, and ratings.
- What market problems would B2Broker solve?
Main problems encountered whether by professional market players or by final consumers such as traders and investors are the same. Today, all the cryptocurrency exchanges are uncoordinated, there are no common vendors on the market, the technologies of aggregation and distribution of liquidity are nonexistent, and there is a lack of clear regulations. All this contributes to limit the access to the market.
We are building a system of aggregation and distribution of liquidity that would allow all the professional market participants to take place in this marketplace and then to supply their clients with liquidity. They won’t be obliged to integrate with all the cryptocurrency exchanges. Every exchange has its api, its technical solutions, its compliance, its opening of the account, different methods of sending and receiving money. To free the traders from repeating the whole algorithm every time when they join a new cryptocurrency exchange, our platform will itself solve all these problems. In fact, the professional market participants get a ready-made solution: they come, sign the contract and get aggregated liquidity flowing from all the exchanges at the same time. In future, we also plan to transfer this liquidity not only to brokers and cryptocurrency exchanges, but to all the aggregators that are known today, such as One Zero, Integral, and Prime XM.
- How ready is your product at the current moment?
Main B2Broker products are a cryptocurrency broker, a cryptocurrency exchanger and a cryptocurrency exchange, all of them ready-made. It means we have ready-made software that we distribute following the model Software-as-a-Service. Any people can acquire a licence, brand their project and start promoting.
We launched the first version of B2Broker, the test version already in June and we connected twelve brokers in July – today, we continue connecting them. Before the end of 2017 we plan to connect to our system around 200 brokers covering around 10 million traders, and by the end of 2018 we will connect around 500 brokers and 20 million traders: it means we will control 5 to 7% of the market.
- In the meantime, B2BX is raising funds through the ICO. Why did you use this method of financing if you already have a team and a product?
Indeed, many people ask this question. Besides the product itself, we wish to distribute the liquidity for the further development, and we need licences for that. There are two types of liquidity. The first one is the cash liquidity and the physical delivery exchange. We are going to implement this type under a Japanese licence because currently it is believed to be the best one. The second type is the marginal liquidity which is necessary for cryptocurrency brokers. In the near future, cryptocurrency brokers will dominate the markets, stripping the cryptocurrency exchanges of their trade volumes. I will explain you why it will happen. Many people who wish to invest in a crypto asset have difficulties understanding how a cryptocurrency exchange functions, how the orders are placed. They already have current accounts in Finam, in BKS, in JFD, in Alpari and they would like to buy bitcoin not to transfer it somewhere but just as an investment. Such clients do not need to go to a cryptocurrency exchange, they need just to reach a cryptocurrency broker, and invest money into crypto assets, using one of their current accounts, already serving to invest in stocks or indexes. As a matter of fact, the importance of cryptocurrency exchanges will diminish a lot.
- How a purchase of your token would help potential investors, participants of your ICO?
I would list five sectors that can be of value for investors.
Firstly, our token is precious because every its owner would be able to use it to pay the fee of the broker or the cryptocurrency exchange B2BX which is one of the members of our ecosystem. The growth of the token in value is inevitable because it will attract great liquidity: I think that just in six months after ICO is finished we would reach a tenfold growth. The more expensive the token is, the less fee you pay to the broker or to the exchange during the trade.
Secondly, starting from 1 January 2018, we will accept payment from the participants of our B2BX cryptocurrency exchange aggregator only in our tokens. The cost will be fixed in dollars but the payment will have to be made in tokens according to the current rate. It means that the growth of the number of the participants of B2BX would lead to the increase of trade volumes of the platform and therefore the sum of the fees. To pay these fees, brokers, exchanges and all the participants of B2BX will have to buy tokens in exchanges. If members of the cryptocurrency exchange aggregator are unable to pay B2BX tokens in any exchange, they would pay us in any way they prefer and we will ourselves redeem the necessary number of our tokens.
Thereby, if we reach our goal of connecting around 200 brokers to our aggregator before the end of 2018, the monthly fee would reach no less than $1 million monthly, leading to the organic cash flow to the market, leading to the organic high demand for B2BX tokens. Before 2019, we plan to connect more than 500 brokers.
The token holders are always motivated to keep their tokens as long as possible because if our platform is successful, new and current B2BX participants would come to the market every month and buy B2BX tokens from all the exchanges to pay their fee to us. The more clients there are, the more money would come to the B2BX ecosystem, triggering a keen demand on B2BX tokens.
Thirdly, we will create a club of active participants of the project. Any person would be able to join it after a KYC procedure if they have no less than 1,000 B2BX tokens in their wallet. The club of active participants will have its own foundation (an ETH address). Every month, 20% of token fees paid by all the participants would be transferred to the foundation and subsequently divided among the token holders in proportion to the number of tokens they hold. The more tokens active participants have, the more tokens they would receive. It would give one more impetus to hold a largest possible amount of tokens as long as possible.
To keep the membership of the club of active participants, one would have to take actions that would be fixed in the system and taken into account. In the case of not satisfying these criteria, the token holder would be unable to retain his membership of the club of active participants of the B2BX project. Residents of USA and Singapore would also be unable to be active participants. The KYX procedure will start in December 2017. At this stage, we will start receiving applications to join the club of active participants and will start asking for a list of necessary documents.
Fourthly, our token would enable the investor to purchase any products of the B2Broker company, except for crediting a deposit for liquidity. I believe that many people think of starting their own business, a cryptocurrency exchanger, a cryptocurrency exchange or a cryptocurrency broker. The more expensive the B2BX token becomes, the cheaper would our products become for investors.
And finally, it is impossible to forget the speculative component. We plan to provide our token to every broker, to every cryptocurrency exchange that would become a member of our ecosystem. We also plan to provide our token to all known aggregators that have from 400 to 1,000 brokers. Then the brokers would be able to develop it in their cryptocurrency exchanges and add it to all the possible listings on key exchanges. We plan to do it in six to ten months after the end of the ICO. This would contribute to make the growth of our token inevitable.