This article is written by one of our contributor Stefan Perlebach.
This week we are welcoming Mindaugas Savickas from Rokkex, a crypto exchange on a mission to “make trading secure & easy”.
Mindaugas will explain to us what it takes to open an exchange for crypto and Security Tokens, why there is still a great demand for higher security and what role Rokkex`s STO is playing within their ecosystem.
Enjoy the Interview
What is ROKKEX’s vision?
To build an ecosystem where security and transparency are at its forefront, compliance and regulations are welcomed, and crypto is not seen as a boogeyman who loves volatility.
Why do we need another Crypto Exchange? What is creating the need for Rokkex?
First and foremost, let’s address the elephant in the room — hackers and security. $8 billion ($356 million in Q1 2019 alone) — is reported to be stolen throughout the relatively short existence of crypto exchanges.
Secondly, a crypto exchange by cybersecurity professionals is just the beginning — while we cannot penetrate and win the market overnight, we can definitely compete in security, performance and UX solutions with top exchanges. In our opinion, the solution lies in tokenized securities and issuance platforms that will have all of the mentioned benefits. That is why we are working hard to deliver 2 new products: a full-fledged STO platform and a fully compliant securities exchange.
As of today, there is no European exchange out there permitted to trade Security Tokens. What is your prediction for Rokkex when to be ready to start trading Security Tokens and what are the main hurdles in your way?
Besides the implementation of the technical infrastructure, ROKKEX would also need to comply with the necessary regulations and apply for a license to operate a trading venue for security tokens. The licensing process could take up to a year, which means that ROKKEX would be ready by the end of 2020. The main hurdle in the way of launching the Securities Exchange would probably be creating access for non-professional investors.
How do you plan to create the initial supply and demand on your exchange to gain traction and a high trading volume?
From the very start of the project we had big traders on our waiting list, who were affected by the hacks, therefore, the demand comes from those who want to trade securely in the first place. Also, we have made deals with market makers to provide additional liquidity.
The other important aspect is part of our growth hacking strategy, we are onboarding our new users via the same KYC process so they can both invest in STO as well as trade in our exchange. Last but not least, the same users will be able to invest in other upcoming STO projects that we will list on the platform.
What will be the biggest challenges for ROKKEX to be successful over the next 5 years?
It would mainly be compliance and regulations of the securities as we are dealing with lots of moving parts in different countries and regions. If you add ongoing volatility in the market and technical challenges, it might seem like a lot. Nonetheless, talent and hard work do wonders.
Who do you see as your main target group and whom as your main competitors?
In regard to crypto exchange, we look up to Binance and Kraken. When it comes to the secondary market for Security Tokens — tZERO.
What is the one thing you believe in regards to Security Tokens most other experts within the industry would disagree with?
“Gradually then suddenly” — most of the experts try to be conservative and say that there is no liquidity in the secondary market. Some of them talk about the infrastructure or certain regulations not being ready. However, when something happens — it happens so fast that only the first-movers can take advantage and use it properly. I do believe things can change really fast with Security Tokens, we just need to be ready.
What is the most exciting happening you are waiting to see in the Security Token Ecosystem in 2019?
Without a doubt — our own ROKKEX Security Token Offering.
Rokkex is doing its own STO as a means to raise funds. What can investors expect from the Rokkex Token?
RKX tokens represent a debt obligation of ROKKEX. In other words, the RKX token is a tokenized bond that grants both fixed and variable annual interest rate. The fixed annual interest rate amounts to 5% of the nominal value.
For example, if an investor would buy 100 RKX tokens, it would earn 5 euros every year. The variable interest rate amounts to 15% of the gross profit of ROKKEX. It means that if ROKKEX generates 1,000,000 euros in gross profit, 150,000 euros would be split among holders of RKX tokens. Both fixed and variable interest will be paid to investors quarterly.
What is the best learning you have made within the last year?
Invest in your legal department — you are entering regulated markets and competing with big players. You should be prepared not only on the technology and infrastructure front but also have your legal side of the project ready.
Thank you for the Interview!