Cobidex: A Community-Owned Bitcoin Derivatives Exchange

Cryptocurrency trading has become mainstream, and there are no two ways around it. Apart from crypto-native trading platforms, there’s been an influx of traditional trading venues that already allow users to receive exposure to the cryptocurrency markets.

At the time of this writing, the daily traded volume across cryptocurrency exchanges exceeds $100 billion.

What is more interesting is that cryptocurrency derivatives have overtaken the center stage and represent the bulk of trading going on. Years ago, this wasn’t the case – most of the exchanges offered only spot trading with the exception of a few, but now things are entirely different. There’s no recognized centralized exchange that doesn’t provide derivatives products. This also comes as transactional volume surges as well.

With this said, though, there’s also a lack of decentralized options for Bitcoin derivatives trading. This is where Cobidex comes into the picture.

What is Cobidex?

Cobidex aspires to become one of the first community-owned derivative exchange alternatives. Unlike most of the privately-controlled and fully centralized venues, the platform is intended and planned as a cryptocurrency derivatives exchange that will be owned by the community.

First things first, Cobidex will begin as a hybrid derivatives exchange that will transition from centralized to semi-centralized and, finally, become a fully decentralized exchange where the control will be taken by the community.

The idea behind this particular transitional approach is to make sure that there’s enough liquidity at the beginning and a good trading experience without any slippage, and a sufficient choice of trading instruments. This hybrid ownership (at the beginning) will also be a stepping stone for the exchange before it manages to transition into a fully decentralized venue once the conditions are appropriate.

Once it’s done, the community should have full ownership of the exchange through the governance Cobi token.

Tokenomics: The Cobi Token

According to the team, COBI is a token that comes with a set of uses cases designed to incentivize users to trade on the Cobidex exchange.

Right of the bat, these tokens come into circulation through what’s known as trade mining. This is a process that provides incentive rewards for traders who use the Cobidex platform to trade. The token will be rewarded to traders 100% in line with the trading fee that they’ve paid.

Traders receive their COBI tokens once every 24 hours, and the amount is determined by the fees they’ve generated through that day.

Cobidex users can also earn passively by staking their existing cryptocurrencies in a process known as liquidity mining. It can be done using USDT, BTC, ETH, and other altcoins. The APY will be paid out in the deposited token.

This is how the COBI tokenomics looks like:

The COBI token also comes with a couple of other use cases. The first one is called referral mining, where users will receive 20% of the fees the people they have invited to the platform generate. At first, Cobidex will be paying the revenue in COBI, but once the distribution is completed, subsequent revenue will be paid out in USDT.

Cobidex will start out as a platform that’s centralized but also community-oriented and expand trading instruments available for its users. Once this is achieved, it aims to transform into a 100% decentralized exchange.

Once the transition is finished, the community will gain control over the exchange through the COBI token. Holders will receive a share of the revenue generated every day according to their COBI token holdings, so long as they have staked them.

Last but not least, all COBI holders are also going to receive a monthly share of the exchange’s total generated revenue from a market-making activity from the specific month. This reward is referred to as CMM, and it is supposedly a unique feature of the exchange.