Crypto platform VALR promises 'negative fees'
ITWeb
VALR, in partnership with Bittrex, has announced the launch of a new digital asset trading platform in SA, which will allow users to buy and sell more than 50 crypto-currencies.
This will be the largest selection of crypto-currencies out of all South African platforms, claims VALR.
Farzam Ehsani, former blockchain lead at Rand Merchant Bank who is now co-founder and CEO of VALR, says: "Our partnership with Bittrex is one of a kind in South Africa and gives us access to international liquidity, globally competitive prices and leading security practices."
On signing up, new customers will be fully verified within minutes.
"We use artificial intelligence (AI) and machine learning technology to validate customers' identity within minutes, to comply with international know-your-customer guidelines, without them ever needing to leave the comfort of their home (or smartphone screen)," says Ehsani.
When potential customers sign up, they will be put on a waiting list and will have to invite other people within their network to join. Once a certain number of referrals is reached, they will get access to the platform.
Ehsani says by participating in the referral programme, new users will be rewarded with discounts and the ability to earn up to R1 500 per referral. All people who receive an invite via a referral will also receive a 10% discount on fees.
Bittrex CEO Bill Shihara says: "Bittrex is committed to advancing blockchain technology around the world, and our partnership with VALR gives us the opportunity to help drive adoption of this technology in new markets."
Ehsani says VALR is unique because it will have fees that are lower than zero for market makers on their bitcoin-rand and bitcoin-ether order books.
"This means we pay our customers. This is revolutionary in the financial industry, where an institution has negative fees!"
On the company's Web site, under frequently asked questions, this is explained in more detail: "A market maker is someone that places a buy or sell order that is not immediately matched with any other order on an exchange. They must wait for another market participant to match their buy or sell price. As a result, market makers increase liquidity on an exchange platform, giving options for market takers to execute a trade immediately and therefore create a thriving marketplace."
Ehsani says: "We depend on market makers to increase liquidity on our bitcoin-rand and bitcoin-ether order books, and we think it's only fair that they get incentivised and rewarded for providing this service.
"We're excited to be the first in South Africa, the continent, and most of the world to pay market makers a percentage of their trade value whenever their orders get matched. This is one of the ways VALR shares its value with its customers."
Ehsani says the company has some unique products in the pipeline, which they believe will be world-first when they arrive: "But, unfortunately, I can't divulge much about them yet."