AMA Highlights – PowerTrade
By Daniel Dal Bello, Director.
September 28, 2020 – 7 min read.
On Wednesday 23 September, we welcomed Tom Howard and Jon Myers from PowerTrade into the Hillrise Capital Telegram chat for an AMA. Tom manages Business Development & Growth, and Jon leads Design & Marketing.
PowerTrade is a uniquely mobile-first cryptocurrency options platform designed specifically for an outstanding mobile trading experience. Launching with BTC options in Q3 2020, the team plan to add ETH and DeFi options followed by futures contracts. The PowerTrade Fuel token (‘PTF’) is a DAO token which governs the PowerTrade treasury.
In this post, we have compiled key questions and answers from our AMA event.
Daniel Dal Bello
Thank you both for being here, I know you’ve been doing a couple AMAs but as always it would be great to start with each of your backgrounds and your motivations for building PowerTrade.
Hey, thanks for having us!
I’m Tom, I’ve been deep in the cypto-space since early 2017 angel investing early in projects like SNX, REN, Kyber and more. Since the end of 2018 I focused on the DeFi space, starting the DeFi Nation community and building tools such as the ‘Gasless’ DAI wallet.
Now I’ve joined with the PowerTrade team to make cypto-options and derivatives trading super easy!
Thank you for having us here! I’m Jon, co-founder and design lead of PowerTrade.
I’ve been working in user experience and user interface design for the last 20 years or more – with a focus on fintech, and more recently (starting in 2012) in crypto. Formerly, I lead design for the launch of Timo Bank (fastest growing bank in Southeast Asia and was Chief Design Officer at Liquid where I oversaw all digital design, design team, and innovation initiatives.
Daniel Dal Bello
Something that I found initially striking is that you are “building mobile-first”. As you’ve said in past AMA events, no other exchanges have taken this approach.
To me that makes sense, I would assume the most significant customers to an exchange would be trading large volumes on a desktop versus mobile interface.
I also noted that you have done some ‘preliminary research’ showing high demand for a great mobile experience.
Why did you go with this design approach and what research have you done to show an appetite for a mobile options platform?
Most of the traders we spoke to, even if they trade a large account, want to be able to trade on-the-go. Nothing like being out at a club with a $500k position open when the market turns on you.
Working in the crypto exchange business and contrasting that with global fintech plays like Revolut, Robinhood, etc., we saw a wide gap in user experience. I think part of this is because of the roots of the crypto exchange business – it has been in its “Craigslist” era, where people would just tolerate a sub-part user experience.
We see the name of the game as user acquisition and user education, and people are obsessed with their phones. A recent study I read said that 40% of respondents would rather give up their significant other for a month versus their phone!
How was the Community Sale this week, and how are you feeling about the debut listing on BitMax tomorrow? I can imagine it being great to reach that milestone.
Hey Ray! The community sale turnout was well beyond our expectations, we had about 3,200 people online trying for whitelist all at once, it got pretty nuts!
Excited for the BitMax listing!
3,200 people all trying to whitelist at the same time. It was a bit crazy.
Happy to see you guys did this via Discord, sadly there a lot of projects popping up lately who simply make this claim – without backing it up.
Daniel Dal Bello
This is more of a general question. Referral programs for derivatives exchanges have taken a lot of flak in the crypto-community in general. I’ve noted that you are still working on the exact details of your program.
I’m curious to know what both of your feelings are around incentivizing signups to derivatives marketplaces and how you will navigate the negativity these programs attract?
I think it all stems from the risk of trading derivatives and that the retail crypto-community is seen to be less experienced or savvy when it comes to financial instruments than in traditional markets
I think there’s two parts to your question:
1. When it comes to liquidity mining, we certainly want to avoid any wash-trading-like activity which is why we are taking a careful and considered approach to be sure we are incentivizing healthy behavior. For instance, makers are the most valuable based on their ability to provide quotes at all times. We’re thinking about how to take these factors into consideration.
2. With less experienced traders, it’s important that they don’t take large risks before they understand what they are trading. This is why we have very low minimums so people can learn with a small amount of money. We are also talking with some trading experts to create high quality educational content, and also be sure to include that content in our interface in some way.
The more we can do to make sure our traders do well, the longer they’ll stick around with us and trade.
Daniel Dal Bello
I might just lead into this from what you’ve just said. What’s your strategy to onboard users? Will you be primarily targeting retail as we note the commitment to low minimums, or larger volume traders?
Our initial onboarding approach is to focus first on user segmentation by segmenting users into three groups: beginners, intermediate, and advanced. If someone is completely new to options (beginner) – they will be introduced to the products, why they can trade options, risk management, and how to trade options. In the case of intermediate and advanced users, we will be more focused on progressively onboarding them (getting them through the customer journey) – and introducing them to “how the app works” instead.
From your whitepaper I can see that on launch only 10% of all tokens will be in circulation. Valuing your diluted market capitalization at nearly $80 million (please correct me if wrong).
How do you intend to keep value for the token while you build out the platform and grow your userbase? We have seen many similarly structured ICO’s launch at ~x10 in recent weeks, only to go down 70-90% in the first month.
Yes the fully diluted market cap will be $80m – but it’s important to note that this unlocks over 4-5 years. Only 4m is released on day 1 and circulating slowly increases over the following years.
This is most similar to SRM in that regard, as the exchange launches and becomes successful, the 25% of trading fees begin accruing in the PTF treasury, and the release of tokens rewards the early backers and builders with increased circulating and increased market cap.
It’s tough to get these economics exactly right but I think we have a good incentive structure, and the feedback so far has been quite positive.
Thank you, this means that there will be meaningful (in relation to market capitalization) ‘utility’ value and volume attached to the token relatively soon after launch?
Yes – essentially if it goes well we will outgrow the fully diluted market capitalization over time.
Daniel Dal Bello
What’s your approach to marketing? Have you allocated funds to marketing the platform? It’s a very competitive space.
One thing that has worked well for other exchanges when they started, such as Binance, BitMEX, and FTX, was working closely with trading influencers, getting them generous referral commissions and producing quality educational content to teach their audience.
None of them have an options trading partner yet so we’ve been very well received by these trading influencers who are excited to bring a new financial primitive to their audience.
I see three core pillars that are intrinsic to the marketing (outside of strategy and tactics).
1. Product: this entails the user experience, user understanding of the product, all the affordances necessary for a solid user experience and so on. This has to be solid. We will nail this and constantly iterate based on data.
2. Tech: the tech must [be] rock solid, stable and fast. People have to be able trust the tech. We’ve assembled a word-class team here that is focused on one thing, delivery.
3. Growth: there are hooks in the app itself, inflection points, which we hypothesize will drive product virality. Shareable PnL in ways people haven’t seen – these hooks will be tied into the campaigns themselves.
Daniel Dal Bello
Many top crypto-exchanges have ‘Standard’ and ‘Advanced’ trading interfaces available for users.
Can you talk to us about how you have designed a mobile platform to cater to both to beginner and advanced traders? Will the interface be the same for both user types or will you follow a similar approach to the above and create multiple interfaces?
There will be one interface that serves both beginner and advanced traders. In the case of advanced traders, we have made it easy to dive into things they care about – say the Greeks – where advanced features are accessible, but do not clutter up the interface and confuse beginners who are not there yet.
As someone who uses a range of exchanges – how do you intend to keep latency low and uptime high? As a user these have been immensely horrible for trading on certain exchanges.
Yes – the tech on current crypto exchanges is quite subpar. Our internal bar for excellence is more like the NYSE. Can’t share too many details right now but I think you’ll be pleased at the performance when it’s ready for you to trade.
Daniel Dal Bello
You have said before that you will have a web version eventually, but you want to focus on getting the mobile product right first.
We can see the ‘Desktop UI’ milestone on your roadmap, but there is no date attached. What’s the timeline for a web version of the platform?