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Alternative Derivatives Exchange

Founded by Capital Market professionals with a history of near ten years of working together, ADE aims to become the premier institutional venue for hedging risk on alternative products including Weather, Freight, Hashing and Digital Assets. Backed by its proprietary technology stack including a range of dynamic client facing User Interfaces, server based high throughput matching technology and blockchain based (deployed on Ethereum) financial Clearing Mechanism, Clear Chain.

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20%

Target

£250,000

Raised

£50,000

Minimum

£25,000

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Founded by Capital Market professionals with a history of near ten years of working together, ADE aims to become the premier institutional venue for hedging risk on alternative products including Weather, Freight, Hashing and Digital Assets. Backed by its proprietary technology stack including a range of dynamic client facing User Interfaces, server based high throughput matching technology and blockchain based (deployed on Ethereum) financial Clearing Mechanism, Clear Chain.

Our Business

Our marketplace is globally accessible, promotes price discovery and will offer participants the opportunity to trade a variety of Digital Asset products. Our key products include contracts based on Bitcoin, Ethereum and Litecoin. Our derivative products will provide participants with a means for managing risks associated with changes in the prices of these assets, asset allocation, ensuring physical delivery of select Digital Asset products, speculation and arbitrage. Due to the fact that both long and short positions are mostly closed prior to delivery date, the majority of our trading volume will be financially settled, meaning that settlement is made through cash payments based on the value of the underlying digital asset, rather than through physical delivery of the asset itself.

 

We will initially operate our business in two distinct markets: futures markets and market data markets. As ADE position in the market matures, exchange technology will open another revenue stream for ADE through SaaS platform offering. Futures markets offer trading in standardized derivative contracts on a regulated exchange including contracts that provide for the physical delivery of an underlying commodity and contracts that provide for financial settlement based on the prices of underlying assets. All futures contracts are cleared through a decentralised clearing mechanism Clear Chain. ADE will never take proprietary positions in digital asset derivatives or other financial instruments.

 

By using ADEs trading venue, in contrast to alternate means of execution, market participants will be able to trade larger size and achieve cost efficiencies through greater transparency and process integration.

 

In addition to trade execution, ADEs electronic platform offers a comprehensive suite of trading-related services, including electronic trade confirmation, access to clearing services and risk management functionality. ADE trading-related services are designed to support the trading operations of participants. Through ADEs electronic platform, we are able to facilitate straight-through processing of trades, and to provide seamless integration of front-, back- and mid-office trading activities. We also offer a variety of market data services for distributors and end users.

The Problem?

High cost of execution

Spot Venues charge a percentage-based execution fee 0.13% per (on average), plus charge up to 2% for withdrawal

CME Charges $2.5 per lot + Clearing fee.

No deliverable futures

ICE (NYSEs parent company) is the only derivatives venue to offer physically deliverable Bitcoin futures (only BTC).

No Trading Venues focusing on Alternative Products

Existing weather contracts are huge in area size they cover e.g. US Midwest or are Exotic custom agreements not available to a wide audience. Similarly, Freight is hedged via forward freight agreements (FFAs) or Indices. Gold Contract Size on CME is 100 troy ounces i.e. $160k approx.

No hedging mechanism

Miners and other Digital Asset (DA) investors cannot lock in yield on cryptocurrency investments,

Mining pools; cannot presently be hedged,

Master nodes: operators receive regular payment for the services provided in underlying DA with no available hedge.

Small/Mid businesses are unable to hedge the cost of Freight shipping as Brexit materialises.

Business are unable to hedge the weather impact as global warming accelerates.

Capacity issues

Spot venues and new derivatives venues suffer from capacity issues caused by a poorly built technology stack.

Lack of trust

Spot venues offer low grade security and are not regulated (hacks and insider trading common place),

Few derivatives venue offer accessible or even deliverable products, and no trusted mechanism exists for digital assets.

No Clearing

There is no publicly available clearing mechanism for digital assets (ICE has private for BTC).

No electronic venue offers standardized contracts on alternative assets or allows clearing in any kind of automated fashion,

Existing established venues offer no margin offsets (sell on one venue/buy on other = no position).

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