August 02, 2018
Hello COOPEX Community!
Recently, our CEO Jonathan Downing was interviewed by Chris, aka SkrillaKing - a popular cryptocurrency Youtuber and ICO reviewer. For those who still haven’t checked out the video, you can find it here - https://www.youtube.com/watch?v=-bl6QW-CHMw&t=68s or by heading over to SkrillaKing’s YouTube channel.
And, for those looking for a condensed and edited transcript of the interview, look no further.
There’s still time left to participate in our ICO! Head on over to https://coopex.market/ico/ to snag yourself some COOP tokens and become part of the world’s first cooperative decentralized exchange!
I’m the founder and CEO of the Cooperative Exchange. Right now, I am a senior in the University of Texas, and I’m studying computer engineering and software development. In the past I’ve worked with some other blockchain projects as well.
My CTO is a computer science student and him and I were also working on a blockchain research project, a multidisciplinary project, here at the University of Texas with a prominent UT engineering professor so we are experienced in blockchain technology. He is the president of Texas blockchain, so we basically got together and thought to ourselves “what is the best way for us to improve our blockchain industry, the cryptocurrency industry?” And so that’s where we came up with the idea for the Cooperative Exchange - aka COOPEX.
Our team is international, we are mostly from Ukraine. My CTO and I, we’re from Texas, but our team is mostly from Ukraine. We have five other developers and three advisors working with us and they have experience running ICOs; so our team in general is fairly well balanced. We have development on the developer side and advisors that can help us with the marketing on the dev side.
We’re really excited to get started and help improve our blockchain industry.
SkrillaKing/Chris: Why don’t you tell us about COOP Exchange and what it is in a nutshell?
Jonathan: The Cooperative exchange is an exchange owned by its users. Not only are the users getting 75% of the revenue, but they get voting rights - meaning they vote on token/new token listings, they get the revenue, etc. It’s kind of a decentralized proof of state system.
Currently, it is a centralized governance system, but we want to move towards proof of state governance. We want a democratic system where the users own the exchange.
Chris: So how did you come up with this?
Jonathan: I started buying Bitcoin back in 2015 and really enjoyed it. Then last summer I worked for an ICO where I got involved in and learned a lot about the industry, But, I found a lot of problems when I was investing in exchanges, like the ridiculous listing policies and fees.
It could cost thousands of dollars to list a project and we felt that spending a large percent of your ICO on listing was ridiculous. We figured that since most tokens run on Ethereum blockchain, the infrastructure was also already there.
Chris: So, because the infrastructure is already there, why don’t others see the high fees and start an exchange with lower fees?
Jonathan: That’s the idea we started with, which is how can we fix these policies. Other exchanges need humility; some coins can’t spend 20% on listing fees, and we hope that us starting exchanges like this will even out the listing fees and we are hoping to jumpstart that. We have a soft cap of $500,000 and a hard cap of $950,000.
Chris: $950k is one of the lowest hard caps for exchanges that I’ve seen. Is there anything you have in mind about projects for the listings?
Jonathan: We want to list projects similar to IDEX, a decentralized exchange for new tokens. So, its niche; we’re more interested in smaller blockchain projects out of ICO. Not even necessarily smaller, just new ones out of ICO. Larger projects have exchanges, like
It is more for ones that can’t list on
Chris: What are the benefits of using COOPEX?
Jonathan: We have a massive revenue sharing program that’s going to come in buyback in dividends and token holders have a vote and a say in exchange. They can vote on policies they dislike and those that they do like.
Also, liquidity and market making, other decentralized exchanges have problems with liquidity and a lot of projects just don’t have the marketing ability to create trading volume. We also want to introduce margin trading at the end of August.
We’re basically going to loan funds to traders to buy and sell tokens on our exchange, those with good liquidity. And you know, zero listing fees are great.
Chris: My concern is always “is this going to be listed on exchange?” Is there any chance to draw value from token?
Jonathan: We’re open to other blockchains as ERC tokens are so easy to integrate. Others can take months to list tokens, which I can’t believe. It’s easy to list on ours.
Chris: The hard cap is very good right now. I, like many others, am reluctant to invest in large hard caps as there’s the greater possibility of being dumped on exchange. So, what are other aspects or good factors to invest on COOPEX?
Jonathan: Our token buyback is a plus, the dividends program is a really big plus, and the token holder voting also a really big plus. We’re really interested in security, so decentralization is what we’re working towards. Cryptocurrency holders want safe investments. We’re looking for $25k in Pre-ICO, and not looking to spend too much on fundraising. The potential for projects is really in market hard cap.
Chris: Market hard caps are one of the most important things when investing for me, so a question is: which pairs are you going to use?
Jonathan: Right now, we have Bitcoin, Bitcoin Cash, and Ethereum for ICO, and ERC tokens will be listed on launch. We’re going to pair with either DAI or True USD, both which are stable coins. We are considering Tether but will have a stable coin, most likely DAI or True USD. [Post interview, the COOPEX Team has selected DAI as our stablecoin].
Chris: When listing will you pair to all of them or is one of them going to be more dominant?
Jonathan: We’re going to look into projects hard caps and decide, like a vetting process, to decide pairings – one of the ones I just mentioned. We are going to look at how popular each is at the moment to pair. However, all projects will have Bitcoin and Ethereum pairing.
Chris: Tell us a little about the decentralized part of the exchange.
Jonathan: We’re looking to make the exchange mostly decentralized. Right now, it is considered a “hybrid decentralized exchange” meaning it is partially decentralized - as Bitcoin Cash and Bitcoin can’t really be decentralized.
The Ethereum assets will be on a smart contract, and we’ll move all of our ERC assets to smart contract and open withdrawals. We are also looking to do on-chain settlement. So, our full decentralized exchange will launch when can figure out full on-chain settlement like IDEX, which publishes transactions on a chain.
Two weeks ago, I saw they spent $5-6 per transaction, which is too much. There’s no way we can afford that so once we have a solution to side-chaining we’ll use a side chain for on chain settlements, so we expect side-chains to be a lot faster; but right now, none of these side chains are available on the main net so we have to basically wait until they are available or maybe make our own side chain.
Chris: So tell us about liquidity
Jonathan: Liquidity is a big problem with decentralized exchanges and smaller exchanges in general. We are partnering with ChainRock, which is an investment firm, for marketing and investment services via our API. They have their own funding and we can give them funding too. The real question is how do you to create liquidity in a market that doesn’t have any? It’s difficult to do.
The larger exchanges are basically professional market makers that have mastered the art of creating liquidity and maintaining it. So, we’re going to work with market makers to provide liquidity. It’s difficult but we can make it easier for people to trade without changing the price.
Chris: How do you think about it in terms of scaling the exchange?
Jonathan: Scaling is difficult because you never really know exactly how many people are going to use our exchange. Our goal is 10 million users, we have 10 million tokens, so each user gets a token is the idea.
We’re moving to a
But the idea is to create more instances of our backend to scale and
Chris: So, you have
Jonathan: Our funding goal is modest, we don’t expect people to give us millions of dollars; I wouldn’t even accept that because I think people should be able to have the potential to make money from this. So, we plan on spending 50% of our ICO funds on marketing and 50% on development.
We only anticipate needing about on 250k to launch and 250k to market efficiently, so we only really need 500k. More gives more wiggle room but we won’t need more than 1 million. If we can’t meet what we need at the ICO, we’ll delay it a week. We’ll still develop but we won’t be able to market as well.
Chris: What’re some of
Jonathan: A big challenge for any smaller exchange is that you need to market to get funding, and you need funding to market well, so it’s like a chicken-and-egg problem, you know, which comes first.
Marketing is difficult in this industry; it’s expensive and take lots of time and energy, so for someone like me who’s a developer first, the marketing part was difficult, especially without the funding.
Chris: What’re your thoughts on a road map so far and delivering according to it?
Jonathan: We will probably be able to launch the exchange at the end of the ICO. We’re still doing development and that is until the end of the ICO, which is August 3rd if we meet soft cap; August 10th if we don’t. We will still launch, just using the funds that we have. I do think we’ll hit roadmap goals. They are realistic, but we will add more once basic ones are met.
At the end of August, we will launch margin trading and at the end of September we’re hoping to fully decentralize the exchange, and that’s based on the assumption we’ll have some sidechaining solutions by then. At the end of 2018/early
Also, we want to open a liquidity desk because we’re going to partner with market makers, and I’m hoping we can kind of create an ecosystem with them, then we can leverage relationships with other exchanges and stay on track with the roadmap.
Chris: Are you going to have weekly or monthly updates? A lot of projects don’t give updates and just sit there with your tokens and it’s a big problem.
Jonathan: We’re going to do weekly updates at first, every week we’ll do a development update and after we’ll do bimonthly. That is once most of features are rolled out and we have a fully functional exchange. We want to start with weekly updates though to make sure people know that we are working on something.
Chris: Tell us about COOP token? How are the number of tokens determined and the process behind that?
Jonathan: Our total supply will be 12 million. Like I said earlier our fundraising goals are pretty low as well, so our idea is that we want each user of the exchange to have one token because you need at least one token to vote and you can’t vote without any tokens. Our goal is to have 10 million active users, which is fairly achievable, but also fairly high, and will take us a while to reach that number. That’s pretty much how we decided the 12 million circulating supply.
At the end of the ICO if we don’t sell that many we’re going to burn half of the tokens, and we’ll only have 5 million circulating supply. But the idea is basically one token per user, like each user can afford at least one token, so that’s how the number was determined.
Chris: A question a lot of people want to know is how many tokens will be owned by founders, advisors, etc...?
Jonathan: About 2 million tokens will be owned by the exchange, or 16% of the total supply. 1 million will be used for marketing and 1 million for development.
The 2 million will be locked for 6 months meaning we won’t touch it for 6 months and after we can determine how we’ll allocate it. Otherwise there isn’t much other than the 50% split between marketing and development. 16% of total supply is pretty low as opposed to the 50% owned by other exchanges, however that 16% is assuming the hard cap is met.
Chris: So, we have a user submitted question: Is fiat a possibility on your exchange?
Jonathan: We’re not looking to add fiat. We’d have to be regulatory compliant to allow and we don’t want to do KYC. That’s something that I think personally is a privacy problem. I’m a really big component of privacy and I don’t want to make users give up all their personal information. In the future we can look into doing that for only fiat deposits, but right now we aren’t going to launch with it.
Chris: Will any ERC 20 token have the possibility to be listed? Is there a form of internal security for the shadier tokens?
Jonathan: We will have a vetting process; we won’t allow scam projects, but we will allow small projects to be listed on a decent exchange which allows for abuse. IDEX does good job at blocking the scam projects and we are going to model after them where you submit a form and have a team to review. We will obviously try our best not to list scams, but it is difficult to determine. We won’t list just any token.
Chris: So how do you buy your token?
Go to exchange - create account – put in a
Our withdrawals are disabled for the ICO but we’re going re-enable them after the ICO. We’re also setting up a smart contract right now for the ICO, so people can just send Ethereum to the smart contract and it’ll give them tokens in exchange, but it should be available.
Chris: Can you tell us about the fee structure?
Jonathan: So, we are going to have 0.2% maker fees and 0.25% taker fees and that is a little high compared to some exchanges, but we are giving back 75% of that. You might think why don’t you just decrease fees by 75% in first place? The reason is we want to create an ecosystem with our users, we have to have some sort of dividends or token buy back and rewards program.
Chris: What’s going on with the exchange and what is there to look forward to?
Jonathan: We are almost done with our improved trading UI. Soon is a difficult word but we are going to finish the API very soon. The exchange officially launches August 3rd or August 10th. When we finally have everything ready we can watch the voting and dividends system being implemented, which will be by the exchange or soon after.
We will actually have a voting program for the dividends system,
We want it originally to have 75% all go towards a token buyback program but a lot of our users prefer to have dividends as well, so we will probably separate that 75% and put some into dividends.
Chris: Thank you
Read more:COOPEX Beta Now Live!