Digital assets and cryptocurrencies are the sources of continuous technological and applied innovations. People can easily consider themselves engaged in tech when many models come from finance. It is especially true for exchanges, as they are the core of this industry that have a systematic impact; they define asset prices and manage risks. We should view exchanges from a financial perspective more often. Meanwhile, cryptocurrency industry participants can learn from the experience of traditional financial markets, make model innovations under the premise of controllable risks, and create a new generation of cryptocurrency exchanges.
The B2C operation model (i.e., exchange to users) is the major innovation of cryptocurrency exchanges. Unlike the B2B2C model of traditional exchanges, its technical foundation is the popularization of mobile Internet, and its target user group is the active and curious youth. Its prominent brand promotion and user operation tools are social media and communities. Its success has been proven, but the limitations are apparent, too.
First, their users are both global and local. User needs are very diverse. They are structurally incompatible with the simple user base expansion and user operation model where the exchange is the primary entity. According to OpenEx (OpenEx.xyz), mainstream exchanges will soon need to redirect some resources to B2B2C and use agent channels to expand the user base.
Second, cryptocurrencies are complex financial products. Other than some young people who can collect information actively and are highly receptive to new things, most people need intermediaries for investor education, transaction assistance, and other services. Simply speaking, their conversion model requires trusting some person first and then trusting the product that person recommends.
Therefore, the B2B2C model will be the main battlefield for the new generation of exchanges because reliance only on fee rebates in referral programs is very primitive. The main innovation of OpenEx (OpenEx.xyz) is that it brings the brokerage model of traditional finance to the crypto industry. It is called We Broker. “We” stands for the low threshold and many influencers, communities, and even individual investors who can participate. “Broker” stands for the desire to empower the participants, to free them from the model where they rely solely on the fee income and to offer a low-threshold, low-risk, simple, convenient, and easily diversified income like that of traditional brokerages. What OpenEx (OpenEx.xyz) wants to do differs from tier 1 exchanges is it doesn’t need to be “an exchange that seems to know all”. Instead, it aims to empower its partners with its unique model EaaS (Exchange as a service). OpenEx (OpenEx.xyz) wants to make other parts of the ecosystem strong.
In this respect, OpenEx (OpenEx.xyz) developed an exclusive, powerful, and easy-to-use back-end management system for We Brokers. One of its core functions is order flow management. It allows members to manage the order flow of users and get the order and position management income like market makers, even if they have no capital and risk management capabilities of market makers and are not professional institutional investors. OpenEx (OpenEx.xyz) performed a preliminary statistical analysis of data on the volatility of cryptocurrencies and the leverage ratio of their derivatives. User funds and transaction volume being equal, order flow management allows members to earn an income that is 4 to 8 times higher than just the transaction fee income.
See the example of the copy trading model trending in the industry. It has a consistent and attractive logic: copy the trading ability of professional traders and make a profit. The problem is there are very few consistently profitable traders, and they manage huge funds. How can you be a copy trader if you create a fund and become a professional fund manager? If we think in the opposite direction, it’s hard to earn money, but it’s effortless to lose it. Order flow management can serve as a tool similar to reverse copy trading that helps find users and orders that lose money and make the opposite trades.
The low risk and high income of We Broker’s model will bring a solid driving force and great incentives to those intermediary institutions, push them to attract more people and bring crypto to them. Like an excellent market economy, it lets business pursue their interests and meets users’ needs with the results of this pursuit. Historically, the most effective evangelists are not the minority of idealists but the majority of ordinary people who are bustling for their benefit.
Meanwhile, thanks to high profits, members can have the capital and ability to provide users with better-personalized services. This creates a virtuous cycle: higher yields – better services – more users. For example, influencers can create better content to attract users, and communities can offer more activities to retain users, etc.
To sum up, the model of OpenEx(OpenEx.xyz) truly empowers the B inside B2B2C. It offers this segment a brand-new income and risk control mechanism. It encourages the business(here affiliates of exchanges) to attract new users and serve them in a better, more diverse and personalised way, thus achieving what exchanges cannot do or cannot do better.
Company Name: OpenEx Technology Pte Ltd
Contact Person: Bob JT Chien
Email: Send Email
Address:71 Ubi Road 1#06-34 Oxley Bizhub
City: Singapore 408732