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Is Margin Trading the recipe for getting crazily rich in the digital assets industry?

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Is Margin Trading the recipe for getting crazily rich in the digital assets industry?
Source: Bibox

Margin trading has seemed to become the catchphrase of this cold winter.

Leverage, originally a concept of physics, has been introduced into economics and finance. The essence of leverage is loan. Users can borrow funds from the platform via margin trading that is several times the amount of their own assets and use it for investment so that they are able to use small funds to incite large funds so as to earn more profits.

However, it is worth noting that while users amplify their transaction amounts and obtain higher returns, investment risks that they are facing will also be increased. Despite the high risks, many users with aggressive risk tolerance are willing to use leverage instruments, with hopes of inciting larger funds so as to achieve higher returns. For instance, Bobby, the leading actor in the American TV series “Billions”, once used leverage to obtain huge profits by shorting the market.

With the development of cryptocurrency, the concept of leverage has also been introduced into the field of cryptocurrency. At present, major mainstream exchanges have launched leveraged products, including Bibox, the first ever AI enhanced encrypted digital asset exchange.

 Bibox, in April 2018, launched margin trading, providing users with up to 3 times leverage. In addition, Bibox has established “margin accounts” for users who are interested in margin trading so as to facilitate their management of margin funds.

Users who want to utilize “margin trading” can transfer funds as appropriate to their “margin accounts” at any time. The platform shall determine users’ loan amount based on the amount of funds that users have transferred into their margin accounts.

Bibox exchange Co-Founder Aries Wang told the reporter that “the main purpose of doing so is to isolate users’ margin accounts from their primary accounts so as to ensure the security of their funds.

Margin trading on Bibox is essentially peer-to-peer transaction. Lenders offer loans on the platform and set interest rates. Users who need loans can choose the appropriate “lender” according to their actual situation. Bibox only serves as an information intermediary and borrowers and lenders are free to transact. The platform only charges a service fee and does not engage in lending and borrowing. All activities of borrowing and lending as well as interest rates setting involved in margin trading transactions are performed by users themselves.

In terms of interest rate setting, Bibox, as an information intermediary, does not set interest rate limits for users, but gives an interest rate range: 0.01% to 0.1%, which means that the minimum rate of interest is 1/10,000 [the lowest of all exchanges]. Lenders are free to set interest rates within this range. The time period for each loan on Bibox is 7 days. If a user finds that 7 days is too short, he or she can enable the “repay and renew” function, which means that after 7 days, the loan can be automatically renewed.

The advantage of this peer-to-peer model is that users can, based on their own borrowing needs, find the most cost-effective way of borrowing on the platform.

For example, user A wants to borrow 3 BTC. On the platform with a fixed interest rate of 0.1%, the interest for one day may be 0.003BTC (3*0.1%=0.003BTC); on Bibox, the default is that the interest rate for lending starts with the lowest daily rate of 0.01%. In this case, the daily interest rate for user A on Bibox is 0.000876BTC (0.24*0.02%+2.76*0.03%=0.000876BTC). Thus, it can be concluded that Bibox is a platform that is more suitable for users who prefer margin trading.

As of now, margin trading on Bibox has reached a proportion of 100%, which means that anyone who borrows from this platform can get the loan he or she needs.

As we all know, high returns are bound to come with high risks. In order to reduce risks, all platforms are sparing no effort to prevent the occurrence of margin call. Bibox, which is widely known for its safe trading, is no exception. Bibox is recognized to be one of the safest exchanges in this industry. In terms of risk control, Bibox has adopted a dual approach.

First of all, before margin trading starts, all users who want to engage in margin trading need to, based on their actual needs, transfer funds to their margin accounts, which are separate from their primary accounts. And none of users’ following margin trading are performed via their primary accounts, which ensures that users’ primary accounts will never be susceptible to closeout stemming from the use of leverage;

Secondly, in the process of margin trading, Bibox has adopted an early warning mechanism. When the amounts of users’ margin trading have shrunk to 110% of their borrowed amount, in order to ensure that borrowers’ assets are safe, borrowers’ assets will automatically be closed out by the system at the current highest price on the market. In addition, in order to ensure that the closeout price is objective and fair, the price index on Bibox is not merely based on the price index of Bibox alone, but based on the price information of CoinMarketCap, CoinCap, Binance, Bitfinex and Bibox, and a weighted index is thus calculated.

For instance, user A, whose margin account only has one BTC, wants to trade with leverage on Bibox, after using a 3 times leverage, can borrow 2 BTC from the market. In the end, user A can use 3 BTC for asset allocation. Suppose that the interest on the loan is 0.1%, when user A’s assets has shrunk to 2.2BTC, a margin closeout will be made.

Finally, in terms of risk control, Bibox introduced the concept of “insurance”, the main purpose of which is to help users transfer and divert some of the risks. Users who have chosen this service need to give 10% of their interest on lending to the ad hoc investor protection fund set up by the platform. In case of the unfortunate event of closeout, the platform will use the fund to compensate for users’ loss arising from the closeout.

For the time being, most major exchanges have incorporated the trading instrument of leverage into contract transactions. Currently, Bibox has not launched an online contract transaction, but based on the information that Aries Wang gave to the media, Bibox will also launch a perpetual contract transaction in the near future. As of now, regarding the details of the perpetual contract, no news has been released yet.



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Guest Post

Vid App Lets Users and Influencers Monetize Personal Videos

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Vid App Lets Users and Influencers Monetize Personal Videos
Source: Twitter

We’re visual creatures. That’s why we’re captivated by films and shows that have great storytelling. According to reports from Insivia and Cisco, mobile video consumption doubles every year, and by 2021, videos will comprise 82% of internet traffic.

One venture believes it’s possible to make money from our personal video collection through tokenized rewards.

According to Jag Singh, CEO, and co-founder of the Los Angeles, California, based startup:

Vid is a social app that empowers users to create beautiful videos, control their data, and monetize their memories. We use artificial intelligence [AI] to generate memories from a user’s video feed. These are then organized into an interactive calendar. The resulting video journal can be edited with a patented editing tool before users publish their captured memory.”

Privacy and Protecting Data

Publishing personal journals on public platforms is tricky. But Singh says Vid places a premium on privacy.

“We use zero-knowledge encryption as well as blockchain tech to give users complete control of their data. It also gives them opportunities to monetize their videos with brands—without interference from us or anyone else.”

Bad data practices [e.g. Experian hack] and harvesting user data without consent [e.g. Facebook] have led to regulatory actions such as GDPR [“General Data Protection Regulation”]. Vid’s solution is to encrypt data and let people select what data to make available. Moreover, the app lets users connect directly with brands that might be interested in their video journals or creative talent.

Singh added:

“Users who opt-in to generate video memories in conjunction with an advertiser will receive 100% of the advertising revenue,” whose app can be found at. “No cut is taken by Vid or any third-party ad marketplace.”

So what are the implications of a 24/7 connected world?

People now view one billion hours of YouTube videos each day. There are several large platforms that are capitalizing on viewing trends. With this massive shift, influencers and brands have much to gain: Audiences retain 95% of a message when delivered in video format compared to just 10% when reading in the text, according to Insivia.

Opportunity for Users and Influencers

Vid’s CEO launched the venture in December 2016. He says the app is a unique opportunity to offer a superior, privacy-protected social experience to a massive crowd.

According to Singh:

“We launched a test version in early 2018 and added more than 30,000 users within a month. We were trending up the social media application rankings before taking the app offline again for further development. No marketing dollars were spent on the test launch. It was purely organic.”

The firm has boarded more than 50 top Influencers across social channels to support the app’s public release. The Influencers have more than 250 million followers, and they know they can increase their revenue from brands by using Vid. The app has a swipe-up ad model where ad revenue flows directly to the Influencers.

The app’s target audience is younger generations [Millennials and Generation Z] since they prefer short-form video content.

The Process

“We poured more than $1.5 million of our own funds into product development and have been working on the platform since the end of 2016, we have filed seven patents for the technology underpinning our platform.”

The team consists of Jag and Josh Singh, and now includes computer scientists, engineers, financial experts, marketers, and business development professionals. Maciej Dziedziela, another co-founder, is Chief Technology Officer. He has a background working in major enterprise firms.

Before Vid, Jag and Josh launched and exited a company that grew to nearly $30 million in annual revenue over four years.

Singh also detailed about:

“Contrary to the pump-and-dump ICO and IEO models of most cryptocurrency and blockchain platforms, we have opted for a five-year rollout of the Vid native token. The details of our tokenomics can be found in our whitepaper, which is accessible from our main website.”

The Vid token pre-sale is scheduled for launch on June 14, 2019, and will conclude on August 9. There is no soft cap, and the presale hard cap is $60 million. There will be no airdrops. Smart contracts are audited by Certik.

For further details contact here.

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