Most cryptocurrency projects have a common trait: they are funded by retail investors. In February traders pumped up the price of GameStop stock by 25 times, and in April pumped up DOGE to $0.45.
Binaryx CEO Binaryx Oleg Kurchenko believes that businesses should seek financing from retail investors. His team is developing a tokenisation platform that will help small enterprises raise additional funds to scale.
In an interview with ForkLog, Oleg Kurchenko spoke about Binaryx’s development, the structure of a cryptocurrency exchange, and the tokenisation process.
ForkLog: What were you doing before creating Binaryx?
Oleg Kurchenko: I have been in business and development for more than ten years. In 2012 I founded a software development company.
ForkLog: How and when did you come to the world of cryptocurrencies?
Oleg Kurchenko: I learned about cryptocurrencies in 2014, and in 2016 I built a mining farm. A year later the price of Bitcoin approached $20,000. Then I opened a long position with 3x leverage. After a week the crypto market crashed, and I incurred a loss.
After the market crash I joined a team of traders. We developed and sold trading robots together. Then I decided to create Paytion — a payment system for fiat money and cryptocurrencies. While working on Paytion the idea to launch Binaryx came to me.
ForkLog: What challenges did you face while building the exchange?
Oleg Kurchenko: There were many difficult tasks: integrating the exchange engine, technical nuances, legal issues, the need to build a name and reputation from scratch.
ForkLog: Have you previously worked at traditional exchanges or financial institutions? Can you explain how they differ from crypto platforms?
Oleg Kurchenko: We were involved in software development for fintech companies, but I did not work at traditional financial institutions. In reality, traditional and crypto exchanges operate almost the same. But there are differences: traditional exchanges conduct trading operations, while crypto exchanges encompass several kinds of business. A crypto exchange must be a broker and an exchange, and ideally — offer other financial instruments.
Crypto exchanges have already overtaken banks in usability and in many technical aspects. The future belongs to digital assets.
ForkLog: Why did you decide to open an exchange on a competitive market? What advantages does it have?
Oleg Kurchenko: Binaryx has captured its market share because we do not copy other people’s products, but grow and build an ecosystem. The plan is to build a platform that will be a bridge between cryptocurrency and fiat money. Demand for digital assets is rising, and the market will continually see new products to meet user demands.
We enable working with digital assets, exchanging them simply and quickly. I mean not only cryptocurrencies, but any assets that can be tokenised.
We offer advantages for traders, investors, and newcomers: a convenient trading terminal, a wallet and an exchange, as well as Академия Binaryx with educational materials.
ForkLog: Could you describe the profile of the typical Binaryx trader?
Oleg Kurchenko: On Binaryx, users from 30 countries trade, with the majority of traders from the CIS. Recently, interest in cryptocurrency has been mainly among young people.
We are seeing an influx of new users, mainly investors rather than traders. Binaryx has a mature infrastructure for beginner holders: an exchanger, a wallet, a learning section. I am pleased to see that every day more people buy their first cryptocurrency on our platform.
ForkLog: Binaryx offers trading of six coins. Do you plan to add new cryptocurrencies?
Oleg Kurchenko: Yes, by the end of the year we plan to add more than 200 trading pairs. More cryptocurrencies — more opportunities to earn. But implementation requires investment, so we carefully assess the feasibility of listing each pair.
ForkLog: According to дорожной карте, in July Binaryx will introduce futures trading. Which contracts do you plan to add?
Oleg Kurchenko: For starters we will launch the most in-demand contracts: BTC/USDT and ETH/USDT. The other contracts we will add depending on user interest. On major exchanges the majority of volumes come from futures trading, and we do not want to stay on the sidelines of global trends.
ForkLog: Could you explain why spot trading fees on the spot market are many times higher than futures fees? What influences trading fees?
Oleg Kurchenko: The fee size depends on liquidity. Providing liquidity on spot pairs is more expensive than on futures contracts, therefore the fee is higher. Futures are more beneficial for exchanges. Large platforms will do everything to attract users to futures trading.
ForkLog: What other instruments do you plan to add? Which traders would they interest?
Oleg Kurchenko: Indexes, tokenised shares of publicly traded companies and futures. We also want to upgrade the Binaryx Academy and focus on video lessons about trading.
The long-term goal is to create a platform for asset tokenisation and trading them. The platform will unite the cryptocurrency market, the traditional stock market, the precious metals market, and many others.
We plan to make Binaryx a universal platform, and at the same time maintain a balance between functionality and simplicity. I do not want to overburden users with unnecessary tools, as happens on other exchanges.
ForkLog: How will the tokenisation platform work?
Oleg Kurchenko: Tokenisation is the digitisation of a company’s shares. With it, small and medium businesses will be able to attract funds from retail investors.
Currently such a possibility does not exist. Investment funds hold a large number of shares and reduce the usefulness of issuing securities. Shares of large enterprises are expensive: potential retail investors cannot buy them. Tokenisation solves these problems.
The tokenisation process on Binaryx will be as follows: the company decides to raise funds and approaches us. We conduct due diligence and legal checks. If all is well, we tokenize the company’s shares and list the tokens on the exchange.
ForkLog: How will you choose shares for listing?
Oleg Kurchenko: Binaryx will protect investors from scams and list tokens of enterprises with good reputation and prospects. The ICO market collapsed precisely due to the lack of checks and the flood of scam projects. We want to help businesses that have passed the startup stage and are profitable but still lack funds to scale. There are many such companies.
ForkLog: In 2020 decentralized exchanges became popular. Will they be able to displace centralized platforms?
Oleg Kurchenko: I am confident that decentralized and centralized platforms will peacefully coexist in their niches. At the same time centralized exchanges have advantages: favourable fees, a low entry threshold, buying cryptocurrency with a card, licensing and accountability to users.
ForkLog: How will exchanges and the cryptocurrency market change in five years?
Oleg Kurchenko: The main cryptocurrency trend of 2021 was legalization. I think governments have realised that you cannot ignore cryptocurrency, and it is time to create a legal framework.
The market will develop. New projects, formats and entire directions will emerge. In 2017 ICOs were born and died. Now we witness a bloom of DeFi, NFT and decentralized exchanges.
Another trend is emerging — tokenisation, a fusion of cryptocurrency and fiat money. Tokenised assets will ease business funding and investing for people.
ForkLog: How will cryptocurrency regulation evolve in the CIS and worldwide?
Oleg Kurchenko: The goals of regulation should be transparency, protection of participants, and the creation of fair rules. And prohibitions on owning and using cryptocurrency are barbarism. Cryptocurrency has already changed people’s concept of money, and the state should adapt.
The next few years will be pivotal for cryptocurrency legalization. In the CIS this process moves slower than in Europe. Meanwhile in Ukraine and Russia the number of cryptocurrency users is growing faster than in most countries.
I hope regulation will aim to create a comfortable and transparent environment for cryptocurrency projects, not bans and taxation.