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Despite regulatory curbs, cryptocurrency ecosystem and crypto exchanges continue to thrive. There already is a surfeit of spot exchanges, and now with the rising maturity of this asset class, crypto derivatives exchanges have started to emerge.
One such exchange is Delta Exchange, Started by a team of finance veterans and tech entrepreneurs, Delta offers Futures on cryptocurrencies with up to 20x leverage.
In a conversation with the TechGraph editorial team, Pankaj Balani, Co-founder and CEO of Delta, said: “Derivatives is the next big opportunity in cryptos and it is going to be 4-5x the size of the spot trading”.
He shed further light on his company Delta while delineating major trends in the global crypto market. Here’s an excerpt:
TechGraph: Tell us about your company.
Pankaj Balani: We are a Singapore-based company and our platform is meant for trading of derivatives on cryptocurrencies. We are a crypto only platform and settlement is offered only in Bitcoin.
We have risk management products traded on our platform which are suitable for participants who are looking to hedge their cryptocurrency exposure.
These products are also inherently leveraged which make them attractive for traders who are looking to speculate on prices of cryptocurrencies.
Products on our exchange allow traders to take both long or short exposure, this is especially attractive currently, when cryptocurrencies are in a downward spiral.
All settlements are offered in Bitcoin and there is no fiat interaction at all. Thus, one uses Bitcoins to take a leveraged long or short position on cryptocurrencies and profits & losses are realised in Bitcoin.
TG: What according to you is the scope of cryptocurrency in the Indian marketplace?
PB: Well, there is a lot of interest, from the Indian customer. India joined the crypto party late but in terms of number of transactions and in trading activity it holds a fair share.
Such customer behaviour is best suited for a platform like our’s. Our contract sizes are as small as 1 USD and the primary idea is to profit from trading activity rather than buying cryptocurrency to own.
You cannot buy or sell cryptocurrencies on our platform.
We are Singapore-based company and we look at markets holistically as we cater to global audience; India remains an important market for us.
TG: Could you please shed light on Delta’s innovative product portfolio?
PB: On the product side, we have Bitcoin Futures that are listed on the platform. We also have Ether and Ripple futures listed.
All futures listed on our platform are currently settled in Bitcoin, we do not have any fiat currency or payment gateways and we do not plan to have any going forward.
We do have plans to offer settlement in USDT, which is a stable cryptocurrency. This feature is not available on any other major derivatives platform globally and we’ll look to pioneer this.
TG: While researching our editorial team stumbled upon Initial margin and maintenance margin in your contract specification. How do you define them and what it means for the traders?
PB: Basically, initial margin is the minimum amount of money, in Bitcoin terms, that a trader needs in order to initiate a long or short position on our platform.
Maintenance margin is the amount of money required to hold onto that position. Once the marked value of the position slips below maintenance margin the position is taken over by the risk management engine and sent into liquidation.
We have built our risk management engine in-house and it marks all the positions in real time.
We have invested a lot of time and energy in building a robust risk management engine and making sure that it is able to handle scale.
TG: What is maker, taker fee?
PB: Any trading activity can be looked as interaction between price-takers and market-makers. Any fill (trade) will have a maker, one who makes prices and a taker, one who hits bids/offers made by makers.
We charge different fee for makers and takers because makers add to the liquidity and takers are consumers of liquidity.
In order to incentivise users to build deeper books we share the fee received from takers with makers.
In other words, we have a negative maker fee. I would also like to mention here is that our fees are very low which makes products on Delta most attractive if you are looking to take long or short exposure on cryptocurrencies.
TG: What is the security measures that Delta is taking to hackproof its platform?
PB: Security is of paramount importance for us and we have emphasised on implementing state-of-the-art security measures.
To that end, we have best-in-class encryption and use the same wallet service that are being used by top exchanges.
We employ multi-signature wallets and on top of that, we have a secondary layer of security such as whitelisting addresses which helps keep the funds in our custody secure.
It is also important to mention that since we are a leveraged trading platform, the funds in custody are always a small fraction of exposure on the platform.
This make us naturally less attractive for hackers.
TG: Please tell us about the founding team.
PB: The founding team of Delta is comprised of three IIT-educated engineers and has deep and diverse experiences in financial markets, technology and building tech startups.
Pankaj Balani, CEO of Delta, has spent over 6 years in derivatives trading in Hong Kong and India at bulge bracket banks like UBS.
He has deep experience in derivatives, quantitative finance and Asian equity markets. He also helped build and grow an e-commerce business in India which went on to raise Series C round of financing.
Jitender Tokas is the Chief Business Officer and has worked with Citigroup in India and GIC in Singapore. In his 8+ years career in financial services, Jitender has been both an institutional investor and equity research analyst.
Saurabh Goyal is the CTO. Saurabh previously built and sold a FoodTech company TinyOwl that scaled to 1.5mn users, 1200 employees and raised USD 25mn from the likes of Sequoia.
Saurabh was also the Director of Engineering at Hostar – a video streaming platform which has over 20mn users and handles ~5mn concurrent users.
TG: What is the roadmap of the organization going forward?
PB: Moving ahead, we have many interesting features in the pipeline on the product front.
We are focusing on features that are not available on other derivative exchanges. For instance, as I mentioned earlier, we are planning to offer margining and settlement in stablecoins soon.
We are also building infrastructure through which customers can trade using algos.
These algos will enable traders to trade systemically and hence fair better & manage risk effectively in a fast moving crypto markets that operate 24X7.
About the Company
Delta is a traders first cryptocurrency derivatives exchange that is made by traders for traders.
You can trade Bitcoin, Ether and Ripple Futures contracts with up to 20x leverage on Delta. The Delta trading platform is built for scale, offers advanced APIs for algorithmic trading and is supported by industry-leading risk management practices.
The Delta team abides by the three guiding values of Trust, Transparency and Integrity and aspires to grow Delta into the most liquid crypto derivatives exchange in the World.