CEX.IO company blog | CEX.IO Broker: CFD – system-forming instrument of the cryptocurrency derivatives market

In winter 2020, cryptocurrency brokerCEX.IO Broker, part of a group of companies led by a regulatedcrypto exchange CEX.IO, announced its entry into the Russian market. We are publishing the first part of an interview with Alexander Lutskevich, in which the founder and CEO of the exchange talks about the role of cryptocurrency CFDs in the market, the pitfalls of choosing a platform for margin trading and the peculiarities of Russian traders.

Crypto ExchangeCEX. Iohaving been on the market since 2013, it has long been well known to traders. You have now brought the margin trading platform to the market. What are her tasks?

The products we create help our users to become full participants in the crypto economy in simple ways.

In a global sense, the idea of ​​cryptocurrencies isin decentralization. But achieving decentralization requires seamless interaction between participants and the market. Each stage of the development of this market is manifested by the emergence of new activities: first mining, purchasing cryptocurrencies, then trading, staking, financial instruments, etc. Participation in these activities has a certain technological barrier. Without overcoming the barrier there will be no decentralization. The purpose of our products is to be a bridge, upon crossing which anyone can become a participant in the cryptoeconomy.

When we were the first to create the concept in 2013cloud mining, the service was just such a "bridge". Then they made it easy to buy and sell crypto using credit and debit cards. The same analogy! An identical philosophy has been incorporated into our flexible staking service, which does not require client funds to be blocked in order to receive rewards.

The market is now going through a period of rapiddevelopment of cryptocurrency derivatives. And our task is to offer an elegant solution where the user understands the tool, controls the risks and uses it to achieve their goals. CEX.IO Broker in our vision is such a solution.

And how will your solution help market participants?

For crypto enthusiasts, broker.cex.io is a guide to a new market, the derivatives market. For forex traders, this is an entrance through a familiar tool into a new industry. For investors, it is a transparent way to implement new strategies and hedge existing positions.

Now you are creating your own ecosystem in the cryptocurrency market. What does it include besides a spot exchange and a margin trading platform?

We are best known in the market asa provider of solutions for a retail client, but we are also developing a growing group of b2b solutions. Our b2b solutions serve both the products of our ecosystem and other professional market participants.

B2b products include:CEX Direct - a solution for integrating online businesses with the purchase of digital assets through bank cards; CEX.IO Aggregator - access to liquidity for professional traders; Identance - KYC and AML tools and services for customer verification.

All our services are connected to a single walletfor storing cryptocurrency. This opens up quite wide opportunities for all our clients to integrate into the crypto market as simply and comfortably as possible. For example, clients can trade simultaneously in the deliverable market through the exchange (for selling and buying the cryptocurrency itself) and the non-deliverable market (for buying and selling derivatives, CFDs) through a shared wallet. This is how both standalone trading strategies in the derivatives market and strategies that combine the derivatives and spot markets (for hedging) are implemented.

Why this particular concept? What is its uniqueness?

Our ecosystem is like a puzzle, where everyonethe component has a definite place, and without it there could be a hole in the whole picture. We chose this concept because it allows the participant to progress in the crypto industry.

Imagine - if a child is given only one book,he will quickly "outgrow" her. It is another matter if at each stage of development there will be its own literature, which, which is important, must correspond to the present and undergo revision. Likewise, we enable the user to develop within our ecosystem. From a simple purchase and storage of a crypt, a client can grow into a professional trader implementing a scalable strategy.

The opportunity for the client to develop within ourecosystem and lies in its uniqueness. We create a safe space for the client to work through reliable, intuitive and flexible tools.

What about the competition in the market now? Do you feel her?

For us, competitors in the market, in a broad sense, are everyone who gives access to crypto derivatives and margin trading. More narrowly, those who give access to contracts for difference (CFDs).

We do not focus on the mechanics themselvestool, but on the goal set by the client, coming to this or that service. For margin trading platforms, such goals can be summarized into 2 groups: speculative and hedging. By this parameter, there are giants on the market from whom infrastructure efficiency and marketing approaches can be learned.

At the same time, when businesses reach a certain size, they become less flexible, they hear less from their customers - and this is where the field in which we express ourselves lies.

How do you look at the emergence of a large number of platforms for margin trading in recent years?

We are aware that over the past few monthsmany platforms for margin trading have appeared on the market. Entrepreneurs see the trend, want to be relevant, and not miss the opportunity. However, there is a nuance that is often costly to the user. The quality of the user experience with the market is largely determined not by the external attractiveness of the platform, but by factors hidden from the eyes. The platform can be beautiful, it can have a ton of features, but it can be dangerous for a derivatives trader.

Key factors affecting trade such aspricing, order execution logic and platform speed can only be "felt". At the same time, you need to know what you are feeling so that, as in popular programs, you do not touch something damp and cold.

It is not enough to develop a beautiful platform fromboxes. It is important how users will interact with the market using this platform. And this already depends on what kind of work was done “under the hood”. It is this part that competitors are not always able to handle, since it requires experience in both the cryptocurrency and traditional financial markets.

I will also mention that because of the word "broker" in ourBy name, many consider a variety of brokers to be our competitors. In terms of the mechanics of CFD execution, the CEX.IO broker is truly an intermediary between the trader and the market. But there are already toxic players in the industry offering dubious investment schemes and calling themselves brokers. Our business has nothing in common with such figures. However, we sometimes have to overcome the bias that exists towards the term “broker”.

Why did you choose the Russian market?

For us, focus on the Russian market is an opportunityparticipate in its formation. During our presence in the market, we have served millions of customers around the world. We are ready to bring our experience, our best practices, our understanding of the industry to the Russian market, which is in a phase of active development.

Russian traders have the opportunityuse international platforms. But those who understand the Russian mentality and at the same time can provide high-quality service are few. We know and understand Russians who have a strong school of mathematics, an analytical mindset, a desire to look deeply and question what is happening. We both literally and figuratively speak the same language.

What are you ready to offer the market?

We have ambitious plans for this year. We will introduce new pairs, new account currencies and new instruments in our platform. Let's launch the mobile application and API. We will continue to work on increasing liquidity and improving the logic of order execution. We will actively work with clients and build our own community. We will offer our own educational content that will help in mastering trading. Either way, we will continue to keep our finger on the pulse of the market and do the best we can for our customers.

To be continued.

Company information

CEX.IO Broker is a platform for margin trading of cryptocurrencies based on contracts for differences (CFDs), part of the international CEX.IO group, headquartered in London.

CEX group.IO entered the crypto market in 2013 and now serves millions of clients in different countries. The companies of the group are licensed in the USA and Europe, and the CEX.IO crypto exchange is one of the largest and most secure platforms in the world for the exchange, trade and storage of digital assets.

CEX.IO Broker was launched for testing in a closed beta format on April 1, 2019, and on January 30, 2020, it was opened for clients. The purpose of the project is to provide traders and investors of the cryptocurrency market with access to professional and reliable financial instruments, including margin trading and derivatives.