This is the most exciting product we have worked on in the 5 years this company has been around.
LedgerX launched first as an institutional platform, which is a constraint that is dictated by the government license we obtained and it has no wiggle room. We’ve gotten some angry emails from folks who want to trade Bitcoin spot, options, and futures on a US regulated platform but do not have north of $10M in assets. Trust me, the intent was not to turn away customers or cater exclusively to the rich, so we are very sympathetic. As believers in Bitcoin and its potential to democratize access to finance, we always knew retail would be the next step after proving our institutional offering.
Enter Omni. It will be the simplest way for any retail customer (no net worth requirements) anywhere in the United States and Singapore to have one central place for USD/BTC custody, Bitcoin trading, options trading, and futures trading, among other derivatives we will introduce in the future. We are banked in the US and the application process is as streamlined as we can make it. Everything is “physically” settled, not cash settled which means you can both deposit and withdraw Bitcoin to the account, in addition to your USD.
There will be no fees charged for any trades. This is not a limited time promotion, it’s a forever kind of thing. This will draw some comparisons to a Robinhood-type model except we’ll explain how we can do this. As a former trader at Goldman, we analyzed “maker/taker” exchange fees all the time. In another blog post, I’ll write about the decades-long history of how the system becomes so convoluted and often deceptive, but in essence market makers had the power over stock exchanges so they negotiated getting additional money when a trade was done. The customer “taking” not only paid the price but paid more on top of that, which distorts the actual effective price that they saw on the screen. It was disappointing that in an effort to look "institutional," this model was blindly copied by many Bitcoin exchanges when something different could have been done.
For Omni, we are going to invert the usual, maker pays nothing (or receives a rebate) while the taker pays. Instead, market makers will pay all the exchange fees, as they're the most capable ones to price them in their models in real time. That means the price you see on the screen is the total price you pay for, a user experience for retail that we believe is far superior and certainly more transparent. You will no longer have to read endless fee schedule charts figuring out what the maker rebate is, how much the taker fees are, how much average volume on a rolling 30 day basis have I done and what category do I fall into as a result. Those fee schedules are insanely complicated and completely inappropriate for the average customer. Instead, let professional market makers factor that into the final price, similar to how it’s the cashier’s job to add the tax to a sold good and give you the final cost.
As I said, our current LedgerX license is institutional only, which is why we quietly applied last November for a slightly different license designed for retail. There is no way for me to give timing guidance as to when it will be issued as it is ultimately up to the regulators. But we are certainly engaged in the review as we speak.
So why announce this now? Well, we need brave beta testers — err, trendy early adopters to give us feedback on what will be our first mass market interface. Additionally, starting the KYC process early will accelerate the effective date you can start trading when the license is in place. Omni will share the same order book as our current institutional offering, so there will be plenty of liquidity from day one.
One last incentive to sign up now —the first 1,000 people to start the application and pass the KYC process will get access to a special version of Omni, which we’re calling Cerulean. Once those spots are taken they will be gone forever. So what do you get? Well, early access to the platform, a uniquely cool looking, high end debit card linked to the account, and ongoing events we will throw for members.
Also included is a lifetime free subscription for our upcoming data service (think Bloomberg meets WolframAlpha) that will provide amazing insight gained from our halving contract, options, futures and forward curves that is presented understandably and will be available real time. This tool is way beyond simple charts and graphs for spot and will give insight into a wide variety of traded derivatives and their distributional implications. Even if your main business is trading spot BTC and you have no intention of getting involved with options, this service will still be really useful. It’ll require a monthly fee for non Cerulean members.
And of course, Cerulean members will enjoy a unique, cool looking logo and interface in addition to bragging rights for all time. :)
- Open to all US and Singapore customers
- US Federally regulated
- Headquartered in Manhattan
- Banked in the US
- Spot, Options, Futures
- No transaction fees, forever