2017 was a watershed year in cryptocurrency. It was when digital assets moved beyond their cypherpunk roots and started to grab the attention of mainstream adopters. One of those adopters was Jack Tao, who went on to found Phemex, a cryptocurrency and futures trading platform launched in November 2019.
Since launching, the exchange has been undergoing rapid growth, listing over a dozen spot trading pairs and the opportunity to trade perpetual swap contracts against a variety of cryptocurrencies, including DeFi tokens, as well as gold. It’s also partnered with fiat gateways such as Simplex to remove barriers to onboarding new users and has integrated with TradingView.
Coinfomania recently caught up with Jack Tao, a former Wall Street trading systems developer, to discover more about his journey into crypto and his thoughts on recent developments in the sector.
Why did you leave traditional finance and get into crypto?
Back in 2017, Tao was already nine years into his career as an algorithmic developer at Wall Street bank, Morgan Stanley. Due to the burgeoning excitement around Bitcoin and digital currencies, Tao decided to investigate, and as he says: “After first reading the Bitcoin white paper, that was it. I was a crypto convert.” He went on to explain that with his background in quant trading, which has heavily focused on software, digital assets seemed to be a natural fit for his interests.
However, his Wall Street background also led him to notice some of the biggest flaws in the cryptocurrency sector.
What are those flaws?
Tao explains that coming from the traditional finance field, he was used to a seamless experience and level of professionalism that was notably absent from cryptocurrency trading. He elaborates:
As more and more people came into cryptocurrencies following Bitcoin’s all-time high in 2017, I thought that the exchange industry would have to raise its game. But it didn’t happen.
He outlined the problems that he saw across the board – a lack of decent customer service, poorly performing systems, untrustworthiness, and inadequate security.
So in founding Phemex, Tao believes he has found an addressable gap in the market. The company’s vision is to become the most trustworthy cryptocurrency and derivatives trading platform, mirroring the level of professionalism in the broader financial services industry.
Together with his co-founders, the Phemex team started developing the infrastructure of the exchange. He moved from New York to Asia in July 2019 and has been focused on making Phemex a success ever since.
So, what are the most exciting things happening at Phemex right now?
Tao laughs and says that there is never a dull moment in running a cryptocurrency exchange because “the markets never stop, and neither does the innovation!”
However, he highlights that Phemex is currently running its biggest-ever competition, which is perhaps one of the most generous trading contests in crypto. The total max prize pool is 100 BTC (over $1 million), and participants only need a minimum of 0.02 BTC to join in. There are other benefits, including cash bonuses and 10% off trading fees. Over 1,000 participants have signed up, but Tao issues a call to action to join in before registration ends on Friday, October 23, if traders want a chance of winning.
Apart from the trading competition, what’s the most attractive benefit for traders on Phemex?
Some of the most obvious benefits we’ve already covered earlier in the conversation – a professional platform with a fast engine and the security of knowing that Phemex is a compliant business, registered with the Financial Crimes Enforcement Network (FinCEN).
However, as Tao puts it: “Coming from Wall Street, I know that for a trader, money talks.” So in that respect, the opportunity to trade with zero fees on Phemex’s spot market is perhaps one of its biggest draws. Users get this benefit by signing up as Premium Members of the Phemex platform.
Currently, the company is offering a discount on the usual fees, with an annual membership fee of $69.99 – only $0.19 per day. With typical taker fees of 0.15% on other platforms, even part-time traders can quickly recoup the cost of their membership.
So, with DeFi becoming the hottest trend in crypto this year, what is Tao’s take on the movement, particularly given that Phemex is a centralized exchange?
Tao believes that there is plenty of space for DeFi and CeFi to co-exist peacefully. He points to the fact that Phemex traders can gain exposure to popular DeFi tokens like COMP and YFI by trading perpetual contracts on the platform. However, he advises caution:
DeFi assets can be extremely volatile, and many investors can be quick to jump in without understanding the risks involved.
Nevertheless, he believes that DeFi represents a huge opportunity for crypto. Tao thinks that:
“Although it shows some signs of being a bubble, there’s still plenty of room for the kind of innovation we’ve seen from projects including yEarn and Uniswap this year.”
Finally, any price predictions?
Tao says that he never makes price predictions, which is perhaps a sensible stance for the CEO of a crypto exchange. He states:
“Like most people in the crypto sector, I tend to think in bullish terms, but I wouldn’t go as far as putting a number on it.”
A balanced approach indeed. It goes to show that you can take the trader out of Wall Street, but you can’t take Wall Street out of the trader.
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