On December 9th 2020, CoinEx hosted an AMA with Jack Tan, Wootrade Co-CEO, on “Solution to better liquidity”. Jack answered questions from the CoinEx community and talked about Wootrade’s unique features, WOO application scenarios and plans.
Here is the full transcript, which has been slightly edited for clarification.
Q1.Can you introduce yourself and Wootrade briefly to our community?
Jack: I grew up in the United States, started trading equities at 14 years old, went to Carnegie Mellon University where I met my project co-founders, went to work on Wall Street for some big investment banks (BNP Paribas, Deutsche Bank), got disappointed after they failed to innovate during the great financial crisis in 2008, joined a private investment firm, found Bitcoin and cryptocurrency, started our own quant trading firm (Kronos Research), grew that to one of the largest traders in the world by daily volume, and now I’ve started Wootrade!
We are not like any other project in this space. We leverage all the liquidity from traders and institutions and exchanges (like CoinEx) and put it all together, with zero trading fees. We are kind of like an exchange for exchanges, aimed at professionals, giving traders the best liquidity with zero fees.
Q2.Some users may not be familiar with dark pools, can you explain why we need this in the crypto world?
Jack: Well, because the way people trade is changing. 2020 saw a balance starting to arrive between DeFi pools and CeFi exchanges, all with their unique advantages. We operate inbetween that space, making sure everyone has enough liquidity to operate efficiently. Our own quant firm trades like $2–3 billion per day, right now there just is not any one place where we can trade that. So we are making our own solution, where we can!
Traditional finance dark pools are more about privacy, but with blockchain its all transparent on chain, so this is more about creating an efficient trading system.
Q3.What are your strengths and unique features compared to other liquidity providers?
Jack: Well we do not really have true competitors, but our strengths are:
- Zero fee trading
- Deepest liquidity within a tight spread
- Experience in both traditional finance and blockchain
- Kronos Research and their globally leading trade volume
- An amazing team that is building some incredible products
- A network of existing clients
Not many other blockchain projects can launch with a working product and revenue, but we were able to do that!
Q4.Can you introduce a bit token Woo and its application scenarios?
Jack: 1. Staking (our clients and network of professional traders will be able to access the network by staking WOO)
2. Collateral for futures/margin trading
3. Investment products (we haven’t discussed this much but will be used in some pretty cool scenarios here by our big investment clients)
4. Governance
5. DeFi scenarios
We have got some top investment bankers from the financial world who have built some solid token economic models and we are really confident in what they have done. It is worth taking a look at WOO.
Q5.We know Wootrade provides traders with zero fees. How do you achieve this and make revenues?
Jack: Everyone always asks this, but it is quite common in traditional finance world.
Anyone who ever used an app like WeBull or Robinhood is familiar with the concept. The secret is in the volume, market makers and big traders are willing to subsidize (offer us rebates) for connecting them to organic flows. For traders to make money, they need normal, non-toxic flows on the other side. So that is all we do, connect them and everyone wins.
We wrote an article about it before: “One of the biggest reasons is where the flow falls on the toxicity spectrum. Toxic flow comes from those with better advantages, such that their counterparty (in this example, our market-makers and other clients) would lose by taking the other side of the trade within a specific timeframe. For example, High-Frequency Traders (HFT) taking strategies are very toxic on a short time frame, but not very toxic in the longer term. In contrast, retail traders generally are not toxic in a sub-30 minute time frame and those who take the other side of the trade can generally profit by holding the risk for a period of time.”
It is a win-win for everyone, and the only reason we can do it is because we are one of the biggest traders in the world already.
Q6.DeFi is undoubtedly the biggest hot spot this year. How does Wootrade integrate to the ecosystem and empower it?
Jack: This came from our partnership with DODO, a new DEX that improves on the Uniswap AMM model:
Basically, DeFi sorely lacks liquidity, and without liquidity, none of the protocols can work. We are going to use our liquidity to bring DeFi market-making more efficient. We are hoping to have that live before the end of the month, so that DODO users will have the best trading experience in the DeFi space.
But we love DeFi, and the innovation it brings. We are going to do everything we can to be a bridge between CeFi, DeFi, traders, and investors (In many cases, on the backend, without them even realizing it). That’s the beauty of Wootrade: no one even knows we are there, but all the trading volue goes through it.
Q7.Why did you choose CoinEx? Will there be any other deep cooperations in the future?
Jack: We have been in touch with CoinEx for a long time, they have a passionate community here and they have been willing to innovate. So it was a natural choice! That’s the key — exchanges that innovate like CoinEx will excel, while others that evolve slowly will struggle to keep up with the industry!
Q8. What is your major plan and target in the future for Wootrade?
Jack: We got a lot going on, the actual trading platform itself is being tested, right now we are only accessible by our B2B clients (like CoinEx and a bunch of other exchanges). In 2021 we want to launch more advanced options, build a lot of things, grow our community, and have a huge impact on the trading space.
Questions from AMA Stage 2:
Robinhood just set restrictions for the users. How does Wootrade prevent such situation?
Jack: Good question. The way it works out with Wootrade, the more you trade, the more rebates we can earn from our market making and institutional clients. You can trade 24 hours a day, we would love it if you did. Guess that is the beauty of decentralized tech, there is no middleman to pay.
What issues does Wootrade currently focus on? What are the technical priorities that Wootrade puts on top?
Jack: No major issues, we just wish we could get the platform out there to everyone today so that more traders could start using it. Our current clients are very happy with it, but we need to make sure it scales and everything runs 100% before we really unleash it.
How can ordinary user get Wootrade tokens on the market as quickly as possible? As far as I know, Wootrade will return WOO based on the quality and quantity of the order. What are the benefits of this?
Jack: You talked about returning WOO for traders based on orders, that only happens in some extreme cases, where users with a lot of WOO staked are eligible for negative fees. Trade high volumes, the wootrade network benefits, we can actually pay clients to use it.
Can you tell us the motivation and benefits for investors to hold token in a long term investment and what plans do you have to drive demands and scarcity for the token?
Jack: A very token focused question which I usually avoid because I should not be talking about the token price — however, I will say: Our demand should be very high. We are actually concerned that people who want to use the network will not be able to because there are too many users at first (buying the token and staking). Thing is, we cannot account for speculators. But the amount of people willing to buy and stake for free trading or even negative fee trading is quite high. If a lot is staked in DeFi and other applications as well, it could be an interesting 2021.
The most important thing I want to say is that Wootrade as a company is in a very good financial situation right now, without having sold a single token. We have revenue from our quant trading team and we can use that revenue to fund development without having to dump tokens on retail investors.
Not many projects can say that. We were turning down investment because we did not need it. Now we are ready to build, and invest in others.
When will WOO staking program start?
Jack: Some of that has already started.
These were the first clients to stake, they get zero fees on the network because they were willing to put up a lot of tokens. You can actually see the address on the blockchain, more than 1/8th of the circulating supply is staked. Retail staking is also available on a few different exchanges.
Next week we might even announce some DeFi staking options. In 2021 we will have a more advanced staking program for pro traders and retails on our own trading platform.
About Wootrade
Wootrade is a layer one trading infrastructure complete with deep liquidity, frontend trading GUI, and the ability to integrate into any exchange, trading desk, wallet, dApp, or other trading-related platform. Wootrade is able to leverage rebates from high volume institutional traders and market makers, giving the retail traders and B2B clients high-depth, zero-fee trading.
Website: https://woo.network/
Twitter: https://twitter.com/wootraderS
Telegram: https://t.me/wootrade
ABOUT CoinEx
As a global and professional cryptocurrency exchange service provider, CoinEx was founded in December 2017 with Bitmain-led investment. It is a subsidiary brand of the ViaBTC Group, which owns the fifth largest BTC mining pool, which is also the largest of BCH mining, in the world.
CoinEx supports perpetual contract, spot, margin trading, and other derivatives trading, and its service reaches global users in nearly 100 countries/regions with various languages available, such as Chinese, English, Korean and Russian.
Click here to register on CoinEx
Website: https://www.coinex.com/
Twitter: https://twitter.com/coinexcom
Telegram:https://t.me/CoinExOfficialENG
