Team XREX comes out to play on the show today! A treat indeed to chat with Winston Hsiao, Dr. Wayne Huang & Krishnendu

Chatterjee and hosted by AdLunam Inc. Co Founder Jason Fernandes. Glancing under the hood of the engine of Exchanges we find out about Country level regulations , the inception of UNITAS, and how exchanges report on reserves (shudders)... An action packed hour with some of the leading minds in the industry today. Push play now!

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XREX - Winston Hsiao, Dr. Wayne Huang & Krishnendu Chatterjee

Participants:

• JP (CMO of AdLunam)

• Winston Hsiao (Co-Founder of XREX)

• Dr. Wayne Huang (Co-Founder of XREX)

• Krishnendu Chatterjee (Co-Founder A2Z Crypto)

00:22

Jason

Okay, let's get started.

00:24

Krish

Hello.

00:24

Winston

Hello.

00:25

Jason

Welcome to Diving into Crypto. This is your host, Token Jay. I'm co-founder at AdLunam. AdLunam is an Engage to Earn NFT based Launchpad. Today we have some really interesting guests for you, but we'll jump into that in a minute. Just some basic announcements. The views on the program are that of the speaker and are meant for educational purposes only. No financial advice is on this show, and feel free to use the reaction buttons if you hear gems from our speakers. At the end of the program, we'll open up the room to QnA from the audience, and your questions can be sent across to our Twitter account at AdLunam Inc. So today we have our guests, Winston and Wayne, CEO and co-founders of XREX, a brilliant exchange that I was part of for a while and I really love. And also Krish, who is also part of that exchange and is also the co-founder of A2Z Crypto.

01:35

Jason

So let's go around the room and maybe start with some introductions. Winston, would you like to get started?

01:42

Winston

Hi, everyone. My name is Winston. I'm the co-founder and CEO of XREX. It's really nice to meet you.

01:53

Jason

And Wayne.

01:54

Wayne

Hey, thanks, everyone, for having us. Jason, thanks a lot.

02:02

Jason

Thank you for attending. Wayne, both you and Winston have been inspiring to me and have been massively important to kind of the way I viewed things both in technology and just in. So very glad to have you here. And, Krish, you too. It's been a while. It's great to see you here. And yeah. Would you like to say a couple of words? Introduce yourself.

02:27

Krish

Hi, everyone. I'm Krishnendu Chatterje. I have been with XREX for almost two and a half years, and right now I'm starting something which is called A2Z Crypto, and it's mostly in the advisory and education space. We also have plans to build some cool app for the Indian market, but that's still ongoing. And thank you, Jason and everyone, for having me.

02:52

Wayne

Roll that's awesome. Awesome.

02:56

Jason

Okay, well, let's start with I could talk about XREX for I think, you know, the best person to maybe say a few words about that I think would be you, Wayne. Maybe if, you know, tell everybody a bit about XREX and kind of what XREX 's focus is. I almost said our focus there for a second. But yeah, what XREX 's focus is and what the mission is.

03:22

Wayne

05:03

Wayne

That's great.

05:03

Jason

Wayne. I was going to jump into UNITAS as well because I also definitely curious about that. Also sort of, I guess maybe, Winston, you can maybe jump in a bit about first, maybe talk about sort of how you sort of got involved with founding XREX and what got you into crypto. I know you started the first exchange in Taiwan, but then also maybe you can talk about Unitas Foundation and kind of how you came to creating this very novel stablecoin and kind of what makes it different from other stablecoins.

05:40

Winston

07:00

Winston

That is why the Reserve Bank of India and the dollar reserve out there, the first primary target, the mission is to protect Rupees against the foreign currencies for penetration. So Indian government is openly just announcing that they are able to provide only 13% of the market liquidity the daily forex needs. So of course, if you are very large companies like Tata, Reliance, you're of course going to get that 13% within the 13%. Other than that, if you are building a factory, you creating the employment rate and you might be able to export in future and earning a dollar back then. Yes, the Reserve Bank of India is going to help you to having this access to the dollar. Other than that, actually it's very difficult. Not to mention that individually also it's not easy to holding a US dollar account. So a lot of my clients, they often have to pay me through the third country, through the third party payments.

08:02

Winston

Meaning that maybe some Indian companies are having branch office or some of their merchants are having these OBU accounts in Hong Kong, Singapore or Dubai. So they often will have to purchase the offshore dollar. Meaning the dollar does not belong to Reserve Bank of India, it belongs to Hong Kong, it belongs to Singapore. So the penny rupees out there and requesting those offshore companies to pay on behalf of them to me then it just somehow confuses me. Why is a normal international trading behavior become so difficult? So I quickly realized the world is not just because in Taiwan we never had that issue. We can just buy any amount of dollar sending to. Yeah, slowly. We just get used to it. We just get used to it. And of course that do create a lot of problem. Like for instance, sometimes the man shipping to an Indian company.

08:56

Winston

10:05

Winston

But very quickly I was hacked. Like I lost about 800 bitcoins. But then of course, I pay off all my users in two days. And that's also the time I met Wayne. And Wayne, he is a global cybersecurity expert. So I brought my code to Wayne and asked him how can I secure my code? With Wayne's advice, he advised me never to start again because I'm not a tech guy, so it'd be too risky for me to even restart again. Since then I become an investor in many of the startups. I also engaged in many of the mining activities. Ethereum was of course on a trend at the time. So I was selling a lot of these graphic cards until five years back when back to Taiwan from Silicon Valley. Then I had this very good opportunity. And thanks to when he invited me to co-founded XREX together and we set the goal in the beginning, we are going to solve the real world like a problem.

11:06

Winston

We are not interested in the crypto hypes. We understand blockchain is a technology and it's going to change the world of finance in big way. And this is where we took our path. And we believe that at XREX we complete the mission. Yeah, that's in short about it. Thank you.

11:25

Jason

So would you say then that sort of Unitas is sort of an extension of this goal and this core process and sort of how does it do that? How does it deal with sort of the mission of XREX?

11:35

Winston

All right. So if you really think about currency, the function of the currency is majorly divided into three functions. One is the store value. Another one is the media of exchange and unit of accounts. So just to cut the long story short, okay, unit has served solely only for Unit accounts. What is unit of accounts? For instance, centimeter, kilometer, liter. These are all the units. Unit itself does not have any value, but any value we need Unit to describe. So within Unit has this framework. The store value is dollar. And the US treasury bill itself. Why? Because we actually using USDT and USDC as a medium of exchange. And behind USDT. And USDC is US dollar and US. Treasuries the TBOS. Right. So what we did is that we just divide the US dollar's value into the local emerging currencies one unit. So any person is holding one for rupees.

12:45

Winston

Rupees unitized, stable coin. We call it USDA 91. Why is it 91? Because the country code of India is 91. If it's for Taiwan will be USD eight a six. Because the country code of Taiwan is eight a six. So a user is holding one USD 91. It means that he's holding one upon 80th of US dollar value. Okay, why is the 80? Because the exchange rate about today is about 80. Right. So we clearly mentioned that it's a USD 91. USD to tell everyone regulator users, like what you are using is actually a dollar. But we divide the dollar into one rupees value. So that creates a different category of a stable coin, which the value is of its dollar actually is different from rupee. Okay. But the value is exactly in1 Rupee. That's what we have done. So we call it a unit of account.

13:46

Wayne

So I want to also talk about the past two years, the story of stablecoins. We all saw USDC had detect for a few days when three of the six US Banks that they were using at the time went under.

14:09

Jason

Right.

14:09

Wayne

15:37

Wayne

Liang, Deputy of the US Treasury, she repeatedly clarified that commercial bank deposits are not high quality reserve asset because commercial banks are very suspensible, very vulnerable to bank runs, especially during a financial crisis.

16:01

Jason

Right?

16:02

Wayne

So what are the higher quality assets? Those would be short term treasury bills or government or prime money market funds. And so fast forward today, because of regulators' pressure, I felt that it was very fortunate that over a period of two years that Circle and Tether have moved the majority of their reserve out of commercial banks and into directly holding US Treasuries. And with Circle it's BlackRock that's helping them to manage their treasury holdings as well as execute their repo. So essentially, BlackRock has been running a money market fund for Circle, proprietary money market fund servicing only Circle. And so this infrastructure that we have today is acting as the bottom layer, the first role of money, the store of value layer, and that is 80% short term Treasuries averaging 30 to 40 days and 20% commercial bank deposits. And the US Treasury is further applying pressure asking for both Tether and Circle to use only Fitch rated AAA banks.

17:33

Wayne

Right? So this is currently for the crypto industry. This is the store of value layer, commercial bank deposits, hopefully mostly AAA banks and also short term US Treasury bills. On top of that, we have tokens USDT and USDC servicing as the medium exchange layer.

18:02

Wayne

So this medium exchange layer has made it extremely convenient for us both in CeFi and DeFi to move value around, to trade, value swap, everything. So it is a super-efficient and transparent medium exchange layer. But we need, especially with emerging markets, local currency unit of accounts, because in India when we're doing a lot of crossword trade, often we are using the Rupees unit of account and in Argentina we're using Pesos. In Turkey we’re using lira. Right? So this unit of count layer is now provided by Unitas in form of unitized Stablecoins, which is a new category of Stablecoins only serving as the unit of count layer. They're not standalone Stablecoins because they're exogenously over reserved with USDT or USDC. And so underlying Unitas is the existing mere change USDC and USDT, and underlying that is commercial bank deposits and treasury bills.

19:32

Jason

Wayne, I remember recently I mean, I don't know if you can call it recent, but I know several months ago you had done a deep dive into USDT, sort of the assets that backed USDT. And I think you said that was over collateralized. Do you know if that's still true? And what are your thoughts on that?

19:48

Wayne

Sort of, yeah. So USD tether publishes their Attestation reports mostly every quarter. Circle and Paxos does it every two weeks. And these reports today show a lot of details. They show the banks holding show so the names of banks, and they also show, I don't know how do you call it, kind of like serial numbers of every single treasury bill held by these stablecoin issuers. So I feel that these three vendors issuers are all doing pretty good.

20:45

Jason

Awesome.

20:46

Krish

And one thing I would like to add here, I think it's very important as well that last year around April, USDT mentioned in its filings that they hold Chinese commercial papers or non US Bonds, but then within three months, they actually sold off everything and they only held US bonds. So it's a kind of regulations which forcing Circle to kind of toe the line before they actually held non US Bonds as well.

21:23

Jason

Interesting. But Chris, so since you're here, yeah, I would love to sort of get your thoughts on kind of how you just sort of got introduced to XREX and sort of what your concept is for A2Z crypto and sort of the direction with which you approach crypto and what your overall thought is of Web3.

21:44

Krish

Okay, so I'll start with my overall thought of crypto. So I think crypto is now a well-established asset class and everybody should invest something, maybe 2, 3% ,5% of their total investment into crypto because this has the potential to give them asymmetrical results. So while I was working in XREX, I was also teaching people how to start investing in crypto. How to basically not put all your assets in one exchange, but put your assets in different exchange. Use one for spot, use one for leverage trading, use one for yields, or even go further. And use non-custodial wallets like Metamask and Solana wallets, Phantom, et cetera, for staking on chain. So I was taking these people through the whole cycle of on and off ram KYC custodial wallets, non-custodial wallets. And one thing I quickly realized was the counterparty risk. So basically, most exchanges have this risk whenever they are doing market making and they are rebalancing their treasuries, et cetera.

22:58

Krish

So I started looking for things which probably being working in an exchange helped me look into it. So were very lucky that we didn't suffer due to any of Luna crashing, FTX crashing, Celsius crashing, although we already had discussions with a few of them for various reasons. But we didn't partner with most and we didn't suffer. So these are the same things that I teach my friends and whoever I am giving knowledge to, imparting knowledge to, that these are the things you should do. So with this concept, it came into my mind that, hey, I think this is helping a lot of people. I have already on boarded 500 plus people into XREX. Why not try doing full time, right? And with the blessings of XREX and with my friends, I started doing it on a full time basis, I think, over the last couple of months.

23:51

Krish

And basically onboarding people very newbies who have financial knowledge, but they really like the crypto knowledge to take them through the whole space. So this is where I come in, A2Z crypto. And I'm now traveling frequently between India and Taipei and moving back to India again in May and then starting some sort of collaborations with local schools who are teaching stock trading and who are teaching people about investing to go and have sessions with them. So I think education is one way where I can really put myself in their shoes and try to explain to them why crypto is not gambling anymore. So this is what I'm trying to do.

24:34

Wayne

Hey Krish, a lot of our friends moved out of India to Dubai and Singapore. Why are you moving into India now?

24:44

Krish

I think a lot of our friends are moving out of India because a lot of our friends were very big on the spotlight and they were promoting a lot of stuff. So my idea is I recently started my own podcast with A2Z crypto, and it's in Hindi, and I want to do it in a manner wherein I just roll up the weekly roll ups and try to explain what's happening in the market based on macro, based on trading. So I feel education is something which should not be biased, but most of the influencers in India are kind of biased. And I cannot really blame them as well. Because in India you don't have Sponsorships like you can. Get for Western media like Bankless or Empire wherein they don't need to know, promote exchanges or promote projects which are kind of in the gray area and don't really understand it.

25:39

Krish

So I feel this is where I can contribute myself. And since I am already in crypto and there's no way I'm going to go back from here, and most of the people are leaving India because of whatever tax regulations and traders are leaving, which I understand because the 30% capital gains tax plus the 1% TDs on trading each time is just not viable for professional traders. But then there is still a very huge scope for people who have never invested in crypto. And according to statistics, Indian population is like the average age of Indian investors is like 26 in the crypto space. And they only invest like 50,000 INR which is like $700. But if you consider the next layer, which is like in the age range of 30 to 45, this is where the most of the investors are investing for their retirement. And this is where I want to help them use crypto as a way to maximize their returns without putting a lot of risk on the downside.

26:43

Krish

So I feel education is something and investment is something which should be there and should be available. And this is why I'm moving back to India to try and grow and see if investing is something which people can still do in this market because I feel it's something which people can still do in this market. Because when you're investing with a horizon of four or five years maybe in stocks it's seven to twelve years. So investing is something which is still there no matter whatever is happening. So that's my motivation to go back to India.

27:17

Jason

So Chris, you mentioned sort of it's funny because a lot of what you said sort of talked about investing safely and things like that. And I think in that regard it sort of brings up the topic of sort of FTX and sort of exchanges and how they handle funds and all. And I think Wayne, I think I would love to get your perspective and maybe have you share your perspective sort of on exchanges and funds deposited in exchanges and what is the sort of correct custody of that and whether that exchange should feel free to, let's say, invest those funds in some sort of hedge fund, for example, like FTX did with Alameda Research. Curious what your thoughts are. I mean, I know we've spoken about this before, but I think it would certainly be interesting to get your perspective.

28:11

Wayne

Sure. Thank you, Jason. Hey Winston, how to pick a safe exchange?

28:19

Winston

Okay, it's a really long story, but I would like to remind everybody one thing. Exchange is the marketplace. Before crypto. How you define a good marketplace, a good exchange, say for instance, you are trading stock, you're trading forex. You don't define whether this exchange is safe or not safe. That's not a priority. Why? Because in the traditional finance those risks are already segregated systematically. Okay? You do not allow the law enforcements or the regulation framework will not allow a marketplace to play as a god whole. Users has to be market making themselves, doing everything. There will be separate entity responsible, separate teams and like this insurance, lots of teams to segregate all different kind of different layer of risk to make it like stable. So solely exchange function. How you define good exchange is actually the efficiency, the service or maybe the fees also. So it is only in crypto before we even trying to see if this exchange is providing good efficiency or not, the trading efficiency or not.

29:37

Winston

We need to worry about whether this exchange got bankrupted or not. So I think this is very wrong. And I think this is something that all people would run in the Exchange before this one regulation framework is ready. We just have to put effort, like a lot of effort. And that is what XREX in next one year. We're going to devote a lot of our resource in doing so. Why? Because it is only us. We know how exchange waste a loophole. We know everything. We know what kind of technology or what kind of constraint restrictions. We can actually fill that gap. And to tell regulator like we are ready to work with the regulator. I think how to define a good exchange to me still, we have to still looking into the fact that exchange is the marketplace. Okay. A good exchange is the Exchange where the Exchange can provide you the good trading efficiencies, market efficiencies, whereas the security, that's a fundamental.

30:46

Winston

That's really the fundamental. But sadly, people are spending most of the time worry about security, safety of the Exchange rather than the efficiency.

30:59

Wayne

32:27

Wayne

32:34

Winston

Right.

32:34

Wayne

So us starting Exchange, of course, yeah, we can get cybersecurity pretty right, because we're really seasoned industry practitioners in cybersecurity. But then there's a whole spectrum of additional risks that we must address.

32:54

Jason

Right?

32:54

Wayne

So recently we open sourced our implementation of our Merkle tree, which is only one component of our ambitious endeavor to develop an auditing framework for external and internal auditors to check whether our custodial assets matches our custodial liabilities. Right? Whether if our users total have, let's say, 10,000 bitcoins with us, do we actually have 10,000 bitcoins and Ethereum and this and that. Right. And it's extremely difficult framework. An Exchange is extremely difficult to audit. And that is why today, I don't know, like probably one hand, less than five exchanges worldwide have been audited, properly audited by reputable auditors through this endeavor. Finally, we convinced the network firm, which is the spinoff of Armanino in New York City to be our auditor. But still, every audit would require us to completely shut down the exchange because we need to close the liabilities and the assets that we have.

34:30

Wayne

So think about all your longs and shorts. Everything needs to be closed. But if you don't do that, it's impossible to take a snapshot of your liabilities versus assets and fully understand whether you are sufficiently reserved or not. Right? Now, if we cannot properly audit exchange, it's extremely difficult for regulators to be willing to issue licenses or to design specialized licenses so that they can properly regulate this industry. And if regulators cannot do this, then we don't have insurance companies that would be willing to insure exchanges. And plus we do not have any dealers or lenders of last resort. Right? Because as we saw Silvergate Signature and Silicon Valley Bank, they went down. But FDIC immediately came right with the Fed, with the US treasury to say, all right, okay, look, we're going to backstop this. We're going to make all the depositors full. Right.

35:44

Wayne

We don't have any of these mechanisms. Plus, every exchange we have to counter hedge our risk. And so we need to work with other larger exchanges and liquidity providers so that we can hedge our risk but

36:00

Wayne

We know no exchanges are safe. Maybe no exchange is safe. So it remains a really difficult challenge. In my opinion.

36:12

Jason

You're basically having to resort to sort of a patchwork of multiple different exchanges to sort of diversify risk, to sort of minimize any potential fallout from any one particular thing going down.

36:29

Winston

Yes. Weston in this respect, if you really want me to define a good exchange other than the market FHG part, by the next one year, I will say an exchange who's putting continuous effort not to gain user trust, but to let user verify yourself. There are technology existing such as microtree, but how many exchanges is willing to do so? You're naked, you're totally naked and you're not free anymore. There's so much constraint if you open up your market in a complete way, like what XREX is doing now. Right. So I think at least for the next one year, a good exchange. We put effort in here, not like continuously maybe buying advertisements, like doing a lot of fancy things just to buy the belief or the wrong belief for the market. Right. Like a big event.

37:30

Wayne

Yeah. I just like to say that we checked out a lot of Merkle tree implementations and a lot of proof of solvency, proof of sufficiency, proof of reserves reports published by major exchanges. I'd say 95% of these audit frameworks are extremely misleading. Why? Because if you look, most of them mark to market their assets and their liabilities. What does this mean? It means that, yes, they do a Merkle tree and then ultimately they tell you, hey look, we have liabilities total in US dollar. Value this much, 1 billion. And we have reserves total in US dollar value today, over 1 billion. So we are sufficiently reserved or we're solvent or whatever, right? But that's exactly how Terra Luna blew up. How FTX blew up. How Silvergate Signature and Silicon Valley bank all blew up. Right. It's when you mark to market, that's where the nuance is.

38:40

Winston

Right.

38:40

Wayne

So if you have a lot of FTT or Luna in your reserve and you mark to market at what? At how much discount? Oh, no discount. Right. Mark to market at 100% today's market rate. But these tokens have very shallow liquidity, and as soon as you sell a little bit, the crash price is going to crash 90% and you lose a big part of your reserve's value. So marking to market is extremely dangerous. So at XREX, what we do is we don't mark to market any asset. We don't count value, right? If totally. We owe our users 10,000 BTC. Well, we better have 10,000. We don't care how valuable these BTC are. What's the price of BTC today? Right? And so for Ethereum, for XRP, for every single asset under the XREX audit framework, we use an inventory approach, right. Because it's a consignment relationship, right.

39:56

Wayne

Users give us 100 chairs put in our warehouse, consigned to us to sell these chairs for you. We're just going to make sure that we have these 100 chairs inside our warehouse. We're not going to market and say, well, we've temporarily sold these chairs or exchange these shares to tables, but the value is sufficient because that is extremely risky. But that is what most exchanges are doing today.

40:25

Winston

Apart from that, I will invite everyone to go and check any exchange that has already this one published in Microtree. What I have been showing is like, oh, I have 10,000 BDC, I have 20,000 100,000 Ethereum. So what does that mean? You're just showing how much asset you have under the results, but how much are you owing to the custard? Yeah, you may be showing that you have 100,000 BDCs, but who knows, actually uses the asset under your custody? 200,000, right? That's one missing leg, and that's the common sense. So it's just one side doesn't prove anything. And that's actually misleading the market. Hey, we have mercury, we are transparent. No, you are not transparent. Yeah, that's totally.

41:16

Wayne

Let’s say what Winston said is, yeah, you have Merkle tree, but you're doing it on the reserve, not on your liabilities, right? So let's say, okay, you count your liabilities using a Merkle tree, but then you create just one single fake account. Let's say you're $200 million short, okay? 200 million USDT short. You create one fake account with a balance of negative 200 million USDT. That's going to immediately offset your liability. It's going to deduct 200 million from your USDT liability. And you say, oh, look, we're sufficient. Right? So there's so many ways you can cheat with a Merkle tree. And that's why you need external auditors as well, by the way.

42:03

Jason

Sorry, Chris. Go ahead.

42:04

Krish

Yeah, so there's another way which some exchanges do. They take loan from other exchanges before they do an audit. So I think a lot of people would be aware of something mistakenly so crypto.com mistakenly sent 400K worth of Ethereum to get IO and the day their 400 million sorry, USDT worth of Ethereum at that point and the day their audit got completed, they got it back. So that's one thing, yeah, sure, it can happen, but that's a huge mistake, right? Like in crypto exchange generally, there are a lot of ways money moves and every exchange has their own things in place. So there is absolutely no way that an amount like that can be withdrawn without interventions from the very high level. And the second thing is, a lot of these exchanges, they have counterparty risk. Meaning to say, like they say, okay, fine, we have an earned product and this earned product, this much users have deposited their money and this money we have kept in another exchange.

43:25

Krish

But they don't show that sometimes. And sometimes people do show that. So that's also a huge risk which people do not disclose if people have earned or yield this kind of product and how they are generating the yield or how they are putting the earned product. Maybe they are not really putting this on chain staking, maybe they are just using this as proprietary trading. Right? So these are the things which people should realize that, okay, how am I getting 20% yield when it's nearly impossible to get six 7% yield in the standard market conditions. So if something is really too good to be true, definitely do your due diligence before opinion.

44:05

Jason

Yeah, since we're talking about what makes a good exchange, I think one thing that makes a good exchange is innovation. I think there's not a lot of innovation that we see from a lot of exchanges. And so, to that end, I'm an XREX user, I've been an XREX user for years now. I love the app and so I just wanted to kind of maybe touch upon two features. One that is especially dear to me, the My Exchange. Well now My Circle feature kind of wanted to maybe talk to you guys about what was next about that and also this new Grid trading feature. Maybe somebody from XREX can sort of shed some light on both those two features and kind of what's next for them and where we're going with that.

44:54

Winston

Chris?

44:58

Krish

45:58

Krish

You are just a seller. So everybody can trust Amazon to make the right goods, reach the right spot, and whoever is doing the business, they get paid on time. So everything is trusting Amazon to do it. So that's how right now the groups or circles as we call it, is there right now. So for example, Jason now can invite anybody in and they don't have to trust Jason. They can just trust the app XREX. They can Google online, they can find what is XREX. And what does benefit Jason get is whenever people are trading, it's like a social trading platform. So everybody's trading fee is discounted and to the point that everybody's enjoying the same trading discount. And this is where it gets interesting, is we found that a lot of people are able to really onboard users and try this out. Similarly, there are other features in it wherein if people are staking money, say USDT, and they get 2, 3, 4%, whatever is the APY at that point of time, the Exchange platform, which is XREX, they are taking a certain fee out of it, which is on the platform.

47:10

Krish

That is 15% of whatever profits we are giving you. So now whenever somebody is inviting others to stake instead of this 15% going into XREX pockets, we are actually sharing it with my Exchange owner. So this is kind of a passive income. And why is this important? Because most of the time people do not have a way to monetize their knowledge, monetize their idea. And this gives them some sort of satisfaction that, hey, I am teaching people and I am helping others to come on board it. But if they have a lot of money, they can just invest and I don't get anything out of it. But now here, if they invest or if they trade, I also get to be a part of the whole journey. So that's my Exchange and which has later rebranded to Groups Clubs, as we call it, in this space.

48:05

Krish

And we have also some other products which is in the pipeline, I think for that I will let Winston talk more on this.

48:13

Jason

Yeah, and just to jump in very quickly, the Token Jay Exchange Circle on XREX, on average, we have something like 750K of trading, I think on a monthly basis, which means the fee is down to, I think level nine or something.

48:32

Krish

It's really low 0.9% roughly. Yeah.

48:37

Jason

So let me know guys. I'll send you guys an invite. You can join my circle. But yeah, Winston, let's jump into grid.

48:56

Wayne

Yeah. Hey Winston, feel free to come back anytime. I'll talk about just one feel very proud of the feature. It's our short feature. We really created a different short experience for people who are very new to crypto. Short as you know is a type of margin trading and it involves contracts too. So you can easily lose a lot of money if you don't know what you're doing. But our short allows you to short based on a simple spot trading experience and there is no leverage. Meaning that you can only do one X short. We may open it up in the future, but for now we really want everybody our user base to be really safe and learning about in a bear market how you can still make money through very simple and safe shorts.

50:01

Winston

Okay, sorry, I lost my voice. Okay, can you guys hear me now?

50:06

Wayne

Yes.

50:07

Winston

Okay, so one of the fundamental team, the spot market that is when market goes on a bear market, people in the spot exchange would have to just wait for market to hit down to the bottom. Then I buy and hoping that you go up again. There is no function of shorting other than margin trade. Margin trade is also in the small exchanges categories. But then problem with the margin trade is that it opens leverage that will extend users risk if you are betting on the wrong direction. Second thing is yes, you are using margin trade. And what if I don't open our leverage? Sorry, then maybe 70% of your funds you can only shop 30%. We have to sit there as this one the initial margin, right? That means it discount your cash efficiency by 30%. So what we did is that it is margin trade category concept, but we make it full amount 100%.

51:13

Winston

Okay, so the concept is leveraged by one X. One X means no leverage. But the concept is one X, right? And we give you full amount. For example, the Rs10,000 you want to show Rs10,000, you show the full 10,000. Okay? So that enables us to provide that kind of the trade efficiency that we're talking about. At the same time we protect user not to make an extra casino. The second thing is the grid trade which we just launched like recently. Okay? So greet trade is not a new thing. But why we think Greet trade is important because all of finger traders because we're not talking for pro traders. Right? So up till now, the crypto population is maybe just 5% across the world. The 95% who hasn't come in, who hasn't get into the crypto is our RTA. We want to onboard them.

52:06

Winston

We want to make our service the best exchange for them to purchase their first crypto and to stay in XREX. So, greed trading is something every finger trader will have experience like you wish you could have just a bot. You just know how to write this API. You wish you know how to do quant. Then you can have the bot have a program that automated your strategy. So we make a grid trade as our first approach in this kind of product. And what's special about XREX greet trade. Right now we just have a long because again, we are limited to the spot market. Only limited to the spot market. So any spot market cannot provide you short grid. Right now we only have long, but very soon we're going to introduce a grid on spot which is short and neutral three strategy. That's something that's really new, okay?

53:02

Winston

Nobody is having it. If you ever see anybody who can short on a grid, okay, that will only be in derivatives market or the margins market by XREX, we introduce this product. So this is kind of like unique features like XREX we introduce, we will stay in the spot. We always look in the interest of the customer. Meaning that a lot of exchanges now croaky, I would say that right. Is spoiled. Okay, why? Their interest and users interest now against each other. They are actually hoping users lose money so they can earn money. That's wrong. That's wrong. It shouldn't be that way. So any product that we introduce, any function we introduce fundamental concept is our interest and user interest is in line. It's in the same direction.

53:52

Wayne

Another innovation I would say is on the legal side. We started exchange roughly five years ago. And at that time we realized that because we want to service newbies, we want to make ourselves the most newbie friendly crypto exchange. We just need Fiat on off ramps, really robust, good Fiat on off ramps. So we need to work with very good US dollar banks and maybe banks that support other currencies.

54:24

Jason

Right?

54:24

Wayne

So how do we do that? Five years ago, so we just said, okay, look, we will start something in DeFi later, but XREX has got to be fully licensed and regulated. And the easiest way to do that is to invite all the established financial institutions to invest in us. And since we're doing that, why don't we just go knock on Taiwan government's door and you know, government, you have a fund that you directly operate. We'd like you to invest in us. We're going to start an exchange and we want you on our board. We made all of these happen. And so today we have very robust US dollar On off ramps for all of our users. We use FDIC insured, US banks, as well as fully regulated Taiwanese banks.

55:19

Jason

Yeah, I mean, it's definitely one of the most mature products out there when it comes to sort of trading, just as an exchange and also a very safe exchange because XREX is extremely conservative about listing new projects and pretty much the tokens there are, for the most part, ones that are unlikely to crash and burn very easily. And so I think for somebody who's just starting and getting into crypto, it's like sort of a great way to dip their toes in with sort of minimal risk, right? Because on an exchange, like, let's say Gate, which is a great exchange, don't get me wrong, but there's just so much opportunities to invest in altcoins and IDOs and those things are so much more volatile than maybe Solana, for example. Actually, XRP tends to be fairly volatile. But yeah, I mean, just sort of in general, it's a fairly safe place to trade, which I think is very useful.

56:24

Jason

Krish, in terms of A2Z crypto, what's next for you guys and sort of what is your focus going forward?

56:35

Krish

I think the focus for us is to really understand the users there because as I said, most of the current crypto population in India is roughly aged around 25, 26 and they hardly invest, mostly trade. And the investing class, which is like people around 30 plus to 45 this range, they haven't really dipped in their toes there. So this is where I think an opportunity lies for us to kind of being the advisory and handholding people to invest in crypto and starting off with the basics like what is crypto, why you should invest, et cetera. And taking them through the whole process wherein telling them about all the risks and how you can custody it yourself and what you should do and then bring them to the other side. So this is where I see myself and this is what I'm going to do for the next couple of years at least, to see if this is something which really makes sense.

57:38

Krish

Because for me it really does make sense. And I have been doing it for the last two years, just not full time, but now I'm ready to dip my toes into it and along with it, we'll have a lot of podcasts, we'll have training classes, et cetera. We'll try to work with already established stock trading schools, et cetera, and co work in a way where it's mutually beneficial for everyone.

58:04

Jason

Awesome. Well, we are almost to the end. We are at the end, rather, of this Twitter space. So what I'd like to do is sort of go through and give a chance for people to say some final words. The one thing I would say is, Aditya, you'd send in a request to speak. Aditya Gupta, if you can put your hand up again, give you a chance to say some words as well. But in the meantime, sort of huge honor to have you guys on both Wayne, Winston, Krish, of course, it's great to have you here as well. But yes, I think maybe if Wayne, Winston, if you guys can maybe say a few words sort of in closing and then maybe we can give it to Aditya as well.

58:55

Wayne

Well, I just appreciate the opportunity, Jason. It was a lot of fun. Thank you, everybody for joining us.

59:03

Winston

Yeah, Indian is definitely my second home and we are really looking into the ways to provide a good service for the Indian customers. Just please stay put For sure. We introduce a lot of good stuff to everyone. Thank you.

59:24

Krish

Awesome.

59:25

Jason

And Aditya, since you jumped in late, if you have a few words you want to share with the audience.

59:34

Aditya

Thank you, Jason. Hello, everyone, I'm Aditya from the research team, and I would like to say we are really passionate about what we are building and we really believe that stablecoins and the technology that we are developing with UNITAS has very huge potential. And we have a really active Telegram group. Please message me here or go to UNITAS's twitter telegram, join our conversation and you will realize that how meaningful and how useful the solution can be for the emerging market and businesses. Thank you.

Jason

I think Krish, would you like to add a few words before we close it?

Krish

Yeah, sure. So thanks to you and thanks to the rest of my team joining in as well. And also Wayne and Winston for talking about different kind of stuff on how to be a safe crypto exchange. I think it's just with time, people will have the knowledge to do it and hopefully we keep building and hopefully A2Z crypto can also add value to all the users. Thank you, everyone. And it's already quite late here, so I'll just zip up.

Winston

Thanks.

Jason

Hey, thanks so much, guys. Really appreciate everybody taking the time out their day to join us here. Thanks so much for everybody that's listening. And yeah, we'll be back next week. Same bad time, same bad channel. Thanks, everybody. You all have a great day.

Winston

Thank thank you guys.

Wayne

Thank you guys.

Jason

Thank you. All right, bye.