One of the most interesting ICO projects in the industry, the CoinMetro Exchange, is gaining traction online. As of the time of publication of this article, the company has already raised over €11 million as the ICO has officially reached its final stage, the main token sale.
The project has been long in the making with the team exploring prospective synergies between a traditional STP FX brokerage like FXPIG, blockchain technology, tokenization, and cryptocurrencies.
The hard cap for the final sale will be 300 million COIN with almost 120 million already sold. This will include the 50 million COIN allocated to the pre-token sale.
Finance Magnates had the chance to speak with the company’s founder and CEO, Kevin Murcko, about the project and the token sale.
How did the CoinMetro project come to fruition and what are the synergies with FXPIG?
After founding the FXPIG brokerage in 2011 we started developing our own software in 2012. We developed our own technology including an MT4 bridge a FIX engine, an aggregation system, a matching engine and some other tools we needed along the way. In a nutshell, 99 percent of the technology that FXPIG uses is our own.
I got the idea about CoinMetro about three years ago and I planned to create an exchange. At the time there was no dominant player in the market and it seemed like a good opportunity, which never came to fruition as FXPIG took all the time we had.
A couple of months ago I decided to focus a little bit more on the project. At the time we didn’t think about an ICO, but after sitting with our developer team, we realized that we need a lot of resources to put this project into fruition. Nevertheless, there are some bits and pieces of technology that we can carry over from FXPIG.
Initially, the synergy between FXPIG is brainpower and experience, going forward we have a plan to run the projects in parallel by creating technology on the FXPIG side and integrate crypto exchange level liquidity inside our offering. Eventually, the line between the two companies should blur and a single entity where CFDs, forex, equities and cryptos can be traded.
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What is the technology behind CoinMetro’s matching engine?
The matching engine’s core is built using ojs and Redis. We have a universal REST API that will merge everything between CoinMetro’s front end and back ends. The main goal for us is speed, however, when you’re trading in firm liquidity on a matching engine, speed takes second place behind price discovery.
Our main focus is to make sure that we have compatible price discovery methodologies inside this space. Internal and external price discovery is something that is lacking on a retail level. I would assume that there is a lot of arbitrage happening on different crypto exchanges, especially on smaller altcoins.
You state in your plans that you are planning a product that is similar to a crypto ETF. How will you design the product?
One of the main catalysts for creating this idea was the ERC-20 Tokens liquidity problem. We have an ICO express platform which allows companies to white label our backoffice so they can accept multiple forms of payment on the back of our payment service provider’s license. Once they launch their tokens, a smart contract will be generated on the Ethereum and NEM blockchains. We also envision working with other blockchains in the future.
Once an ICO ends, the tokens will be available for trading on our exchange, when we will classify them into our ETCFs (Exchange Traded Crypto Funds). Initially, they will be classified by industry with additional variations added as the number of listings grows. We will have algorithms that create ETCFs based on certain risk analysis, price analysis, liquidity, etc.
We also plan to onboard a small team that merges institutional experience in ETFs and ETNs space with in-depth cryptocurrency knowledge.
Can you tell us more about the ongoing ICO? How did the presale phase go?
The hard cap sits at around €35 million – this is what we estimate will be needed to develop our listed products fully. This includes three years of operation assuming no revenues: offices across multiple regulated jurisdictions, both for an e-money PSP and a crypto exchange. We already have some support from VCs and have raised almost €8 million before the token sale starts.
How do you plan to stabilize the value of the token?
The long-term stability of the CoinMetro token is supported via our buyback program. We have committed to using 20 percent of the net profits that we generate on FXPIG and CoinMetro will be used to purchase tokens on our exchange. This is done to add some steady supply of demand. Also, all of the services that we provide will be payable in our token which is called COIN.
The payment of every commission that has to be paid by our clients will be executed via COIN, which is purchased on our exchange. This is done in order to create lasting demand to support the price of the token in the future. In addition to that, a percentage of every fee will be burned. We are still working out the precise percentages that will be smelted on every transaction.