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A group of ex-Morgan Stanley core developers announced the launch of Phemex, a ‘high-speed’ crypto derivatives platform for the retail and institutional investors.
As the crypto markets continue to move on a roller coaster, it seems like adoption is growing steadily. A group of eight former Morgan Stanley core developers announced the launch of Phemex. Phemex is a ‘high-speed’ cryptocurrency derivatives platform that is well-designed for the retail and institutional investors. The new firm is based in Singapore.
In a December 4 press release, the former Morgan Stanley developers came with big claims that the platform is ten times faster than the traditional crypto trading platforms. Phemex is now being touted as a low-latency trading platform with no delays. It can reach speeds of up to 300,000 transactions per second while providing 100x leverage. The new platform alleges to have an order entry and response time of ‘less than 1 millisecond’.
The platform offers Bitcoin, Ethereum, EOS, Litecoin, and XRP perpetual contracts. In the future, it plans to offer contracts that are backed by traditional finance tools and instruments. It will also look into contracts that are backed by real-world commodities like agricultural products, metals, and energy.
Going by the name Phemex, it refers to “the Greek Goddess of fame and good repute Pheme”. Jack Tao previously spent 11 years at Morgan Stanley holding the position of the global development leader of the firm’s electronic trading benchmark execution strategies.
Tao came with seven other executives from Morgan Stanley who jointedly help in the founding of this Phemex venture.
In the process of launching Phemex, Tao set up a team of at least 30 senior developers. He elaborated:
“We are not just providing the functionality for trading. As executives from Morgan Stanley, we know what kind of ways, what kind of direction, or what kind of architecture can support high-frequency trading, stability, and low latency. This is where Phemex excels — our expertise enables us to compete with and outperform existing platforms.”
Tao said that since the November 25 launch, Phemex has enjoyed a volume of approximately 1000 BTC daily on BTC/USD contracts.
This level of sophistication, experience, and expertise has let the team parlay its expertise into creating a scalable and reliable platform. As a point of reference, Tao highlighted the challenges experienced by crypto exchanges in 2017 run-up in crypto prices. Most of them slowed or crashed as a result of elevated numbers of transactions.
With that in mind, Phemex claims that its top-speed entry and response times are the solution to that problem. Tao believes that their platform is ‘technically on par’ with the indexes markets.
Why Shift from Fiat to Crypto?
According to Tao, their decision to shift was inspired by two factors. First, they think that the derivatives market has huge potential for growth based on the research done in the initial stages of Phemex. Secondly, they see a lot of room for improvement coming from the traditional financial world where technical standards are significantly high.
Phemex runs on C++ and React programming languages while other platforms use Kdb+, a column-based relational time-series database. A statement read:
“While extremely efficient in calculating orders, costs and risks, Kdb+ presents exchanges with reliability issues due to scalability and transaction throughput limitations.”
Blockchain.com also launched a crypto exchange called The PIT in July alleging that it is one of the fastest worldwide. Phemex also provides a ‘cold’ wallet that assigns an independent deposit address to every user according to the announcement.
Singapore Regulators Are Watching
Last month, Singapore’s central bank and financial regulator, the Monetary Authority of Singapore (MAS), suggested that crypto derivatives trading should be brought under its purview. That proposal would make the trading of derivatives based on the underlying assets like Ether and Bitcoin depending on the city-state’s Securities and Futures Act.
Phemex is reportedly looking for a regulatory license from MAS and for now, it does not serve any U.S,-based clients. The Singapore-domiciled company considers the proposal by the MAS to be timely since it may soon permit crypto-based derivatives to be traded on regulated platforms.