CoinMarketCap lists over 2,000 cryptocurrencies and more than 200 cryptocurrency exchanges. With the top 20-30 exchanges experiencing daily volumes north of only $100 million, can the industry accommodate another player? Beaxy, with a $4.5 million private raise and exchange launch in January, is looking to challenge the status quo with its exclusive partnerships and strong orientation towards the trader community. In a chat with Nick Murphy, (Lead of External Operations), we explore the company’s journey to redefine the space for the better.
The Crypto Exchange Problem and Solution
CEO Artak Hamazaspyan and CTO Mittal Patel launched Beaxy Exchange in December 2017. The founders understood the pain points of the industry. The order matching engine was nowhere to the standard required and led to frequent outages where traders’ orders were not even submitted due to system overloads. Moreover, customer experience has taken a backseat with lack of strong customer support. Onboarding an institutional client has become a procedural nightmare for all involved.
Beaxy remedies that with its proprietary matching engine. The secret sauce is its exclusive partnership with OneMarketData. Founded in 2005, the New York-based data provider has 55 marquee clients, such as Scottrade, Bloomberg, Credit Suisse, Alpha Simplex, The Federal Reserve, and others.
Beaxy has built its matching engine on top of OneMarketData’s existing database infrastructure. This allows the company to execute 250,000 transactions per second per trading pair, and its infinitely scalable. Onboarding a legacy player for the crypto industry seems to be a masterstroke. The exchange will be able to support almost 26 order types including limits, stops, trailing orders, order sends orders, conditional orders, and more. This will make the exchange an attractive option for algorithmic and high-frequency traders.
The company will be upping the game for institutional accounts, as well. It understands the landscape for a typical institutional fund. There are multiple traders, admins, and managers involved in executing and managing trading. Every trader has different limits allocated to him. Along with the standard higher withdrawal limits, the company will provide segmentation of trading limits and individual rights to each silo. So the fund owner will be able to allocate 50 BTC to Trader A, 10 BTC to Trader B, and bar admin from any trading. Compare this with the current archaic standard of having one fund trade through one undivided portfolio and email system. This level of customization will definitely help Beaxy in capturing players in the institutional segment.
Solving the Liquidity Problem
Beaxy is planning to go live on January 30th by partnering with market makers to infuse liquidity from day one. It will have a 0.2% fee, and market makers will get a rebate. The rebate structure will be based on similar standards set at other crypto exchanges. The company will allow persons from all nationalities to open an account provided they pass KYC compliance. The company currently has ~35,000 registered users out of which ~12,000 are KYC approved.
The exchange will not be looking to charge ERC20 and Net5 coins for listings. It wants to onboard only legitimate projects which would have strong demand in the market. It will only charge projects that have their own blockchain because of the time taken to integrate the infrastructure. The company will start off with a majority of the top 100 market cap coins and will also offer fiat pairs.
Beaxy Tokens and Team
Beaxy is offering Beaxy Token, which has a similar use case as BNB. The token can be traded or swapped, outside of the US, for The PLUS Token (PLS) under a loyalty program. The program incentivizes the user holding the PLS token on the exchange. It also gives qualified holders a percentage of collected transaction fees. The BXY tokens shall be directly available for purchase on the platform for the first 100 days from launch.
Nick Murphy is targeting Beaxy to be among the top two exchanges in the long term. He joined the company as an advisor when he was investing capital in crypto companies through his fund Everbit Capital. He has now transitioned to be the Head of External Operations.
The company has a core team of 20 in Chicago. The roster has grown to an almost 40 person tech team in Armenia and 6-7 customer support professionals globally. The senior developer team consists of five people with over a decade of experience having worked with companies like IBM, GE Capital, Bank of America, TD Ameritrade, and Banco Popular.
The internal legal team consists of three people and includes General Counsel Seth Goettelman. The advisory team includes six people including crypto pioneers, VC partners, and early internet pioneers. The team seems to be aligned with the company vision and many of them accept their salaries in BXY tokens.
Marketing and Projections
Beaxy follows a unique user acquisition strategy that includes project partnerships, incentivizing trial and usage, both-sided referrals, and market maker rebate, among others. With offices in Chicago and Armenia, the company is registered in Nevis and is considering moving to Gibraltar. The company has projected total earnings to hit $7 million in year one and jump to $20 million in year two.
With features like portfolio management, 24/7 customer support, custodial accounts, order book depth, and in-exchange charting, Beaxy promises to be a customer-friendly exchange. It is strategically positioned to capture the high frequency and institutional trader market, and its partnership with OneMarketData should make it a strong top-10 contender.
Written by Heena Dhir.