A team of experienced traders, technologists, and executives from some of the largest financial institutions and technology firms announced this month they have been developing EverMarkets, a futures exchange, and clearinghouse built on blockchain. EverMarkets Exchange (EMX), expected to launch later this year for non-US participants, will list both cryptocurrency and traditional futures contracts.
The business plan, conceived over a year ago, was formalized in a white paper that was published in May 2017 and engineering work commenced soon after. Driven by fair and forward-thinking market design, EverMarkets will leverage blockchain technology and introduce an entirely new market structure aimed at creating a more transparent, efficient and secure marketplace.
Main Features of the EMX Structure
- Crypto-native platform: Participants can post collateral, pay fees and settle futures contracts in cryptocurrency without ever handling fiat currencies
- Smart contracts: The use of these digital contracts enable customer collateral and positions to be held on the blockchain, the clearing and custody functions and reducing risk.
- Auctions: The matching engine will use periodic batch auctions to remove speed from the equation and create a level playing field for all.
- Equal access: As order matching will be based on price and size, speed and co-location will be disincentivized.
“EverMarkets is designed to bridge and modernize both the cryptocurrency and traditional financial markets. Coupling the power of blockchain technology with our market expertise, this exchange strives to create a marketplace that is fair for everyone and provides superior transparency and efficiency,” said Jim Bai, CEO, and Co-Founder of EverMarkets. “Just as importantly, we’re giving cryptocurrency traders the means to expand their portfolios into traditional asset classes without the friction that the existing exchange model creates.”
For cryptocurrency holders, accessing futures contracts through EverMarkets will be simple and straightforward. Traders will use EMX tokens, a new cryptocurrency, to transact on the platform. They can then withdraw EMX tokens from the EverMarkets platform into their private wallets without lengthy approvals or a prolonged waiting period.
To protect investors and help strengthen the legitimacy of cryptocurrency as a viable asset class, EverMarkets is committed to instituting the highest standards and safeguards possible. EMX tokens are held by smart contracts on the blockchain, which helps to ensure that assets are secure and visible at all times. Additionally, EverMarkets intends to engage with the Commodity Futures Trading Commission, the U.S. regulator for futures contracts, to further the conversation regarding cryptocurrency exchange regulation.
“EverMarkets will play a vital role in the adoption of cryptocurrencies throughout the wider financial industry over the next several years, and achieving that means creating a market that is secure, reliable and trusted; which is what we’re committed to doing,” Bai added. “More than just transforming the futures markets, we intend to demonstrate how cryptocurrencies and blockchain can make every aspect of trading much more efficient and safe.”
Interested traders will be able to test the EverMarkets platform in an upcoming futures trading competition. Open to participants from around the world, this competition aims to give novice and seasoned crypto traders an opportunity to test their skills across a wide array of assets. Details on the competition will be released in the coming weeks.
Building From Expertise
EverMarkets was co-founded by three former traders, researchers and leaders with experience trading and developing strategies on behalf of hedge funds and financial institutions, they include:
- Jim Bai, Chief Executive Officer: Former futures/options trader for Citigroup and Graham Capital
- Mark Pimentel, President: Former quantitative trader and market-maker at Citadel and Knight Capital
- Craig Austin, Chief Technology Officer: Former head of asset allocation research engineering at AQR
EverMarkets has also bolstered its expertise by building a team of former exchange operators, former executives from futures commission merchants, senior engineers, and cryptocurrency experts.