OPNX Confirms Significant VC Backing

BitMEX CEO Calls for an End to Internal Market MakersIn a recent interview, Stephan Lutz, the acting CEO and group CFO of 100x Group, the parent company of Seychelles-headquartered global crypto exchange BitMEX, expressed his belief that crypto exchanges should phase out their internal market-making teams.Photo by Joe Roberts on UnsplashProp trading desks unnecessarySpeaking with The Block, Lutz argued that with the growth of institutional liquidity providers and high-frequency traders (HFTs) in the market, proprietary trading desks are becoming unnecessary.Lutz stated: “You have enough HFTs out there and prop shops that can perform that function.” He was referring to the role of liquidity providers in filling gaps in the market. He made these comments in response to the emergence of information earlier this week that raised questions about internal trading practices at Crypto.com, a Singapore-based exchange.BitMEX, once the world’s largest crypto derivatives exchange, also used to employ internal traders who acted as market makers. However, Lutz explained that BitMEX’s internal trading team, named Arrakis Capital, now functions primarily as a “treasury desk.” He sees this transition as a natural evolution for crypto exchanges in a market that has matured and attracted more institutional liquidity providers.Arrakis Capital currently performs limited functions, including converting commission fees earned in Bitcoin into fiat currency for operational purposes, hedging BitMEX’s exposure to tokens held as inventory, and making markets for BitMEX’s token $BMEX. Lutz clarified that Arrakis’s market-making activities are limited because external market makers find the token’s liquidity insufficient.Regarding profitability, Lutz stated that Arrakis earns “very minor returns” of up to $100,000 per month from holding T-Bills, but it incurred losses last year. He noted that Arrakis used to play a more significant market-making role when BitMEX dominated the crypto futures market. However, he assured that the trading desk was always segregated, despite accusations in the past.Fee structuresLutz acknowledged that exchanges with internal trading teams have faced increased scrutiny since the controversies surrounding Alameda Research and FTX. To differentiate between benign internal trading teams and hedge fund-like operations, Lutz highlighted several factors, including the separation of client funds and house funds, access to sensitive data, and the ability to move markets on their own exchange. Fee structures also play a role, with low or no transaction fees potentially signaling a market-making motive rather than serving as a counterparty.Lutz’s perspective suggests that crypto exchanges should rely on external liquidity providers and HFTs rather than maintaining internal market-making teams. He argues that the market has evolved. At this point he feels that these teams are no longer necessary, due to the presence of established players within the digital assets space.As regulatory scrutiny grows, ensuring transparency and avoiding conflicts of interest become crucial for maintaining trust within the crypto exchange ecosystem. The digital assets industry is far from arriving at a mature stage in its development. While many in the industry have found the stance taken by regulators to be unhelpful, the industry itself must also demonstrate its ability to iteratively move towards best practice, without that being a knee-jerk response to regulatory enforcement.

Next Month’s Hackathon Event in Seoul Draws Attention from Ethereum DevelopersTickets for Ethcon Korea 2023, a conference dedicated to Ethereum developers and hackathon enthusiasts, are now available for purchase.Photo by DrawKit Illustrations on UnsplashTickets now availableThe Ethcon Korea organizing committee announced today that tickets are now on sale through the official event website. Participation in the hackathon is open to programmers who stake $79, while conference enthusiasts can buy their tickets at the price of $69.With the goal of expanding the Ethereum development ecosystem, Ethcon Korea is the only non-profit Ethereum developer conference in Korea, benefiting from the sponsorship of the Ethereum Foundation. This year’s event will take place in Seoul between September 1 and 3, consisting of four main parts: the conference, an educational workshop, a hackathon, and a demo day.Vitalik Buterin to deliver a keynote speechAt the conference, Ethereum co-founder Vitalik Buterin is set to deliver a keynote speech, which will be followed by presentations of prominent developers and researchers from both home and abroad. Industry experts will participate in the workshop to share valuable insights, bolster participants’ technical skills, and cultivate a collaborative environment, encouraging them to showcase their potential in hackathon projects.Hackathon backed by quadratic fundingThe three-day hackathon will be backed by the quadratic funding method, an idea initially proposed by Vitalik Buterin together with Harvard economist Zoë Hitzig and Microsoft researcher E. Glen Weyl. Quadratic funding is a democratic and inclusive funding mechanism that puts more emphasis on smaller contributions from a larger group of contributors.The organizing committee noted that Ethcon Korea 2023 will not only encourage developers to pursue learning but will also drive growth within the blockchain industry. The group also added that the event will play a role in increasing the global recognition and understanding of the Korean Ethereum community.Ethcon Korea 2023 is sponsored by many renowned organizations including Ethereum layer-2 projects Optimism and Polygon, decentralized oracle network Chainlink, and blockchain investment group Hashed. Contributions from these sponsors and proceeds from ticket sales will be allocated towards event operations and the establishment of a prize pool.The organizing committee is recruiting individuals who are interested in contributing as volunteers or offering their expertise as hackathon advisors. Those interested in participating in these roles can apply through the official event website. The application window for these roles will remain open until the end of this month.

Real-World Asset Investment Platform Alterna Launches in JapanMitsui & Co. Digital Asset Management (Mitsui & Co. DAM) has unveiled Alterna, a novel platform designed to offer retail investors the chance to invest in real-world assets (RWAs). The service launched on Monday following receipt of the necessary regulatory approvals.Photo by Louie Martinez on UnsplashRWA-backed security tokensAlterna enables users to conveniently invest in RWAs that generate stable rental income and other returns. RWAs encompass a wide range of assets, including large-scale real estate properties and infrastructure such as logistics facilities and power plants. By offering security tokens, Alterna opens the door to previously out-of-reach investment opportunities, allowing individuals to invest with a minimum of 100,000 yen. This new service represents an exciting alternative for individuals traditionally more comfortable with cash savings.The first investment opportunity on the platform will be “Stage Grand Nihonbashi Ningyocho,” a residential building located in the Nihonbashi district. The application begins on June 2.The platform’s name, Alterna, emphasizes its role as an alternative investment service, offering a fresh approach distinct from conventional options such as bank deposits, stocks, and investment trusts.More effective portfolio managementCompared to traditional investment types like stocks and bonds, RWAs offer unique risk-return characteristics. With RWA-backed investments, investors can potentially achieve more effective portfolio management. These alternative assets have been garnering interest from institutional investors as well.The Japanese Government Pension Investment Fund (GPIF), the world’s largest institutional investor, has been investing in alternative assets since 2014. To pursue yields, the GPIF has been expanding its investment portfolio in real assets like real estate and infrastructure.Easy investment with smartphonesTraditionally, retail investors encountered difficulties investing in large-scale real estate and infrastructure assets. Mitsui & Co. DAM aims to establish an environment where such investments can be made easily via security tokens using smartphones.Interest in Alterna has been substantial even before its official launch, with over 10,000 pre-registrations recorded earlier this month.