This is a transcript of our recent community AMA session with the DEXTF founders Nicola and Federico on the DEXTF reddit channel. This AMA took place on May 11th 2021.
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Question 1: Let's start with the first question from the community -- What is DEXTF?
Nicola: DEXTF is an asset management protocol that allows anyone to create, mint, and redeem XTF funds. The platform supports more than 75 different assets and funds are soft-limited to 10 tokens. The symbol and asset weights are determined by the fund manager when creating the fund. Each XTF fund is an ERC20 token with its own address and contract allowing users to hold, trade, redeem and utilize XTF fund tokens like any other token. Because of the open, permission-less and non custodial nature of our protocol, there are endless possibilities to build products.
Question 2: Can you help us with the backgrounds of the DEXTF founders Nicola and Federico?
Nicola: I am Nicola, CEO of DEXTF. I joined the team last year in January 2020 after spending 15 years in traditional banking. I was managing technology projects in global markets and now I am very excited to be working with the DEXTF team and together we are building a product that can revolutionize the way asset management is done today. The team has a great experience in traditional asset management and hands-on experience building technology platforms.
Federico: My background is in traditional finance, here in Singapore I started 10 years ago in the private banking department of a Swiss bank and then I moved to a local asset management company were I was leading the investment team, I set-up and co-managed funds in in different jurisdictions during the years and since early 2017 I started to get involved on DEXTF project.
Question 3: Are you planning on doing other security audits?
Federico: Yes of course, with V2 on the way we will do an additional security audit!
Question 4: Are there any plans to integrate on other chains as well aside from Algorand (like Polkadot, BSC, etc.)?
Nicola: Yes, we have been talking to different teams and as soon as the V2 is launched we will be looking to integrate DEXTF to another chain, a good candidate is BSC as the ecosystem on Binance is growing very quickly and there are enough underlying assets for fund manager to create funds using DEXTF. We are also exploring Solana.
Question 5: Can you talk about other possible partnerships that are in the works for DEXTF?
Federico: We are talking to several protocols and aside from talks to other blockchains to build our platform there we are also talking to teams that can help us launch new financial products.
Question 6: How aware are you of competitors in the space? Hord launching through DAOmaker soon, Indexed, Index Coop etc. If you are aware how would you say DEXTF compares to these?
Nicola: We are obviously aware of many competitors and while we are all trying to solve the same problem our team has a different approach. DEXTF is the only project that relies on Arbitrage pricing. This is because XTFs (the DEXTF funds) can be created in kind on the Dapp and some of them are also listed on Uniswap (every fund can be listed by anybody so it's just a matter of time) then you can create the fund cheaper than buying it. DEXTF is also the first mover in launching structured tokens, such as the structured floored token with a built-in option component that would limit losses to a floored value.
Question 7: Most new DeFi projects are just copies of existing ones, they are just useless. So, what's unique about your project & what makes DEXTF trustable as a long term project for users and investors?
Nicola: Our approach is unique compared to our competitors as we are trying to keep the logic simple on chain to minimise the risk of smart contract attack. By doing so, our smart contracts are quite light and do not rely on Oracles which we believe is a weakness of many projects. We all know that often exploits have occurred because of price manipulation and this can be avoided if you don't rely on Oracles. Our rebalancing mechanism is inherited from the traditional world of ETF and it’s been proven to work very well for years so we believe it is the right approach in DeFi as well. Our team is visible and experienced, we are happy to share our credibility with our community and we have a long term vision of building a platform for the future of digital asset management, we are here to stay because we believe in this project.
Question 8: NFT is considered the next trend of the crypto industry after DeFi. Could you share your opinion about NFT? Where do DEXTF see the future evolution of NFT features and capabilities in the next few years?
Federico: We are monitoring NFT since last year and we are sure will be a hot asset but reserved to people able to understand the trends, we also explored the possibility to launch the first fund fully digital investing in NFTs, unfortunately we are limited to ERC-20 tokens for now so it was not possible.
We will include NFTs in future as underlines so experts of the sector will create (and monetize) baskets of the best assets in the market and investors will be able to take exposure to the sector even without much knowledge.
Question 9: What are you most excited about in the coming weeks/months? What, in particular, do you think will bring about the biggest growth in terms of adoption and price?
Federico: In the next coming weeks we are releasing our V2 on Ethereum, this is where all our energies are focused now.
We will introduce the reallocation in the protocol and this will be the first step to a full active fund management infrastructure that will bring growth in terms of adoption and price.
V1 on Algorand also is on the way!
Question 10: What are the ways that DEXTF generates profits/revenue to maintain your project and what is its revenue model? How can it benefit win-win to both investors and your project?
Nicola: Like many Defi Projects it's hard to forecast and make revenue because the ecosystem is still very small. Once the user base increases we are planning to introduce a platform fee for each tranx and this will be shared with the protocol. We are also looking to introduce premium features with other V2 coming soon that will be payable for sophisticated users. Ultimately as we are also looking to utilize our platform with FIs and traditional asset management, another source of revenue comes from the SaaS fee charged to use a Whitelabel solution.
Question 11: What are your plans in place for global expansion, are DEXTF focusing on only market at this time? Or focus on building and developing or getting customers and users, or partnerships? Can you explain this?
Federico: The main focus now is on developing the infrastructure and getting a better user experience in terms of ux/ui, our tech team is working hard on V2 on ETH and V1 on Algorand.
Myself and Nicola are taking care of everything else that is not tech and we are talking with other teams/chains for partnerships and with investors to raise more money and scale up faster.
Question 11: Protecting users/member data and privacy has become a problem that many companies/projects must face in their development. So can you explain a bit about DEXTF Security?
Nicola: We agree, security is very important and that's why we take the development and security seriously. Our team has experience building tech platforms in the corporate world and they bring the knowledge of very high security standards. For example before adding a new token as an underlying our team undertakes strict due diligence to make sure the token is indeed legitimate. Development is also reviewed internally as well as externally before being released into Mainnet. If we are not sure about something, we don't rush the release in just for the sake of it!
Question 12: What is the current status and thinking around DIP-4 and the staking contracts? Did the team already reach any decision on what staking will be available (DEXTF / LP) and how will it be rolled out?
Nicola: After consulting the community a decision was made to only develop the staking contract for the main DEXTF token, we don't see much value in having other staking contracts for the XTF funds and it's simpler to keep this logic offchain. So we are developing the staking contract for this as soon as the V2 is released which is our main priority, and all $DEXTF holders will be able to stake their tokens. DIP4 also had a proposal to develop an escrow account and this is going through final testing so we are planning to use it for the next rewards distribution in June.
Question 13: Hi, a reduction of the rewards was due (we should evaluate a further 20% cut), but what will happen when the TVL will be much higher? For example, what will be the APY with a $80 mill of TVL (I strongly believe we can reach it :)? 7%? How will we keep investors here with such a low interest?
Federico: The APY is a result of tokens released and price of the token, we will make sure to grow TLV and token price at the same pace to maintain an attractive APY.
Question 14: When will you start with buybacks and burns? Will it be announced? How will burns affect the max token supply?
Federico: Burns is not planned at the moment, we are evaluating buybacks in the future through the treasury. Any action will be announced and shared with the community.
Question 15: DeFi is one of the hottest and most sought-after topics in the blockchain space right now. Can DEXTF share your opinion on DeFi with us? Do you think DeFi will disrupt the current financial system? What is DEXTF's approach to the DeFi sector?
Nicola: Of course we believe DeFi is definitely here to disrupt the financial system. The entire team at DEXTF comes from traditional banking and we know very well the pain points of FIs and the way they approach innovation. There is still some time to go because regulation is still not clear in the digital ecosystem but once regulators issue clear guidelines and Defi projects can operate in a regulated way, we expect this ecosystem to boom. Our approach is to democratize asset management as much as possible and remove most intermediaries from the system because we believe the traditional asset mgmt space is way too inefficient, billions of dollars wasted in fees, tonnes of paper work and way too slow.
Question 16: What if the regulatory authorities (especially American and European) ask you to perform a thorough KYC before someone creates a fund? WIll this affect the development of the DEXTF project? Thanks
Nicola: Hi, not at all. We are already getting ready for this to come as we know at some point KYC and AML will be mandatory if we really want to scale DeFI. Our platform is designed to be modular so we have an in-built KYC module that can be turned-on anytime and we also allow third-party KYC tools to be integrated with our platform so FIs can retain their own legacy KYC systems.
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