If you haven’t heard of CoinMetro yet, you can read about it here. If you wish to participate in the token sale, follow our link for an extra 2.5% bonus. Watch video review Kevin Murcko is CEO of Forex platform FXPIG and upcoming crypto platform CoinMetro. You can watch the full AMA here.

How and when would users go through KYC?

Kevin: The KYC module will be uploaded somewhere between the end of the token pre-sale and the Feb 21st when the main token sale begins. It would be a fully automated process, conducted by ID3 Global, who we also use on our forex platform FXPIG. The whole process takes between 1 to 5 minutes, depending on the country you are from. In most countries all you need to do is upload a government-issued ID, driving license, or passport.

Do we get bonuses for holding COIN (XCM)? If not, what’s there to prevent a massive dump when it hits the exchange?

Kevin: Sure. As far as the dump scenario, we’ve built in a few different things to avoid that circumstance. First — the 3 and 5 eurocent coins, the first two tiers that we already passed during the pre-sale, have built-in vesting schedules. The people who purchased XCM at that price, won’t have access to their coins for a certain amount of time. After the first 90 days expire, they get a certain percentage, which at assumed listing price of 0.15 puts them at break-even. At 3 cents they are getting 20% of their XCM released and at 5 cents they are getting 33% of their XCM released after 90 days. Then another 90 days need to pass and they get the rest. That’s one way we are preventing a dump.

The second way is by providing incentive for holding XCM. The strict benefit for holding the coin, regardless of price increase over time, is that discounts apply. Once we surpass 100 million XCM tokens sold, all contributors will have lifetime discounts on both CoinMetro and our forex platform FXPIG. FXPIG is offering about 22% discount off our default rate to CoinMetro contributors and CoinMetro will offer a similar discount — somewhere in the range of 20–25% for life on all our fees. Our basic CoinMetro fee rate is going to be 0.1%, so with the discount that would be 0.075%. That’s just for buying XCM now. For people that come in later on and they just buy XCM on the exchange, they will also be given discounts, based on the amount of XCM they hold. But people that purchased during the token sale can ALSO benefit from that additional discount for holding. That discount will range somewhere from 5% to 50%.

What is your experience running FXPIG and how will that help build CoinMetro?

Kevin: I’ve had a lot of businesses, both online and offline since I was 16 years old. A lot of businesses have a lot of things in common. There are always going to be growing pains, fires that popup and need to be put out. Main thing you learn over time is nothing is ever perfect, most things need to be tweaked as you go, regardless of how much effort you put to make them perfect. You need to be flexible and you need to make sure that the systems you create are flexible and scalable.

FXPIG grew from pretty much three clients on its initial day in 2010 before we went public. We’re still a niche company, we’ve never actually done advertising for FXPIG. There is a much different scope on how we grew the business. FXPIG still trades some of its own funds. We made a good deal of our income off of our own trading, so we never really looked to expand like we’re looking to expand with CoinMetro. We tried to keep it very niche, it was more like a close-knit community so to speak.

However, there are a lot of similarities, especially in the tech. Obviously the sector is very similar, we already have experience building a lot of the components that we will create for CoinMetro. We know the pitfalls, we know how to make them modular and scalable. You can see a lot of issues right now around the industry with exchanges closing their doors to new clients, not being able to service fiat currencies, not being able to go through KYC in less than a month — all those things happen because more than likely their system was not modular, they could not scale it without having to pull it offline, and not to mention they were not ready with just their general support, the amount of people that they employ. All those things we’ve already been through with FXPIG, even though we are a small company we’ve definitely gone through scaling issues so we’ve learned how to deal with those and we have the hindsight, so we can see what’s happening to these exchanges and make sure that we’re adapting to that even before we go to market.

How will marketing be increased, as not enough people know about the project, so could you touch on marketing and what your opinion is on the outreach of the project so far?

Kevin: In 100% transparency here, we have done basically zero marketing to this point. What you see in growth is essentially FXPIG’s client base, Telegram, and BitcoinTalk. The reason why is, well, experience. When it comes to pushing a marketing campaign and then scaling, first you need to make sure that you are stable, secure, and ready to take on that demand. We created this token sale platform just for the token sale. We didn’t just place an Ethereum address on our own page and said “send your money here”. We actually spent some time and some money, creating an actual platform. This platform is new to us; we have talented developers but that doesn’t mean you don’t have to test, stress test, beta test and everything.

One of the reasons why we offered 3 and 5 cent priced coins to the community was that I think there is a misconception in the community that these type of prices don’t usually exist. Well they exist on pretty much every ICO. If you are a whale or a dolphin, or a larger investor, you get access to these types of prices on pretty much every single ICO. I find that little odd, considering that most token sales try to push the community aspect but then they give prices to private funds and individuals that they don’t give to the community. We opened these prices to the community, but there is a caveat to that — you’re kind of a beta tester initially; you’re testing out the platform, we’re making sure it’s stable.

Marketing is actually scheduled to go from 10th to the 12th of January, that’s when it’s going to kick off. Once that happens, you will see a major increase in visibility of our project on Facebook, on Google, things like this — AMAs and interviews, articles that will be released to the press and things of that nature, as well as we will be going on tours. We have an Asian and European tour, we will be hitting conventions, I will be speaking at one or two of these events. So, everything will commence shortly, but at least in my view, in business if you try to be the hare rather than the tortoise, a lot of times you step on your feet and you fall. Making sure that everything is perfectly in line is very important to me, and if you do that the money will follow, the contributors will follow, the success will follow.

What about licensing and regulation?

Kevin: One of our key ideas behind the project is to be very progressive on regulation. The one thing we don’t want to do as a community is not get involved in regulation. Initially Bitcoin was like an anarchist society. Everybody was against regulation, they were against dealing with the government and things like that, which I can understand to a certain extent, but to see mass adoption in this market we NEED regulation. We can’t sidestep it, we can’t try to hide from it. Any major exchange that isn’t currently regulated is going to have major issues when regulation hits. I guarantee in audit, when it hits, it will be a nightmare. Our goal is to be progressive — we will rapidly expand the licenses that we obtain and expand the regulation footprint. One, for banking, and two, to be ready so that even in a jurisdiction that doesn’t have a specific crypto license, we’re going to speculate on the fact that they are going to include crypto in a license that currently exists, maybe a derivative license, a futures license, some type of license. That’s what happened with the Forex industry and I believe that’s what’s going to happen with crypto.

In terms of differentiating, why restrict to the main coins only? Why are you not going to have a segment for alt coins also?

Kevin: That will be the case only during the token sale for logistical reasons. Once the exchange opens, somewhere between day 1 and day 30 we will have the top 10, and then the top 20 coins by market cap. It’s a beta launch, so usually you don’t launch all feature sets because you want to test. If you launch 35 feature sets into a platform on a beta, you’re going to have too many bugs to track, so you want to make sure you condense as much as possible, that’s why there will be 5 coins initially. Once we get to the top 20 we will open up vetting and a voting mechanism. People will be able to vote, and people will be able to come in and ask for their token to be listed and we will vet these.

Our exchange will basically have 3 tiers:

Tier 1 will be “market cap of X minimum” and it has to be vetted, meaning we will go through a process to make sure that there’s stability, we’re going to check volatility, check all other exchanges, check liquidity on the market and make sure that listing won’t be detrimental to the coin itself. Nobody’s really doing that right now, there’s really no price discovery on the market, so when we talk about bringing some maturity to the market that’s part of it. Tier 2 would be “market cap of Y minimum”, and tier 3 will be either unvetted or it would be just coins that just came on the market with no market cap whatsoever.

So we will eventually have hundreds upon hundreds of altcoins, tokens and coins — that’s the goal. We will also have an ICO Express platform, so anyone who uses the smart contract creation tool, whether they’re tokenizing an ICO or an asset, it’s going to be listed on the exchange. It may also be listed on the ETCF platform (similar to traditional ETFs but for crypto and digital assets). These things will take time, you don’t want to put 300 assets on a new exchange on day 1.

Where do you see the value of the token in the post-lockup period and how will the token burn rate of tie into that?

Kevin: I expected this question. Look, we like to follow regulation and we want to make sure that we’re compliant in every jurisdiction we possibly can be. If I give you a price right now and speculate, that can put us into a gray area of being classified as a security. So I can’t do that. What I can do is kind of skirt around the issue and I’ll give you a few bullet points here and I’ll give you an example from somewhere else. That’s the best I can do. Speculating is illegal, actually. I know a lot of ICOs do this, but there a lot of different things they shouldn’t be doing. So here are my bullet points. We will have 3 or 4 approaches to stabilize the XCM value over time.

The first one is the token buyback program. A lot of you are familiar with the Binance token buyback program. I don’t know the exact specifics of theirs, but I assume it’s similar. Our token buyback program works as such: we take 20% net profits from FXPIG as well as from CoinMetro. Then we package those profits into a reserve account every quarter. We will then monitor XCM’s market price and as we see there is too much supply on the market, a lot of sell pressure, we will begin to buy. We will basically put up pending buy orders in order to stabilize the price. Obviously, from day 1 this reserve is not going to exist, we need a quarter to actually put funds in our reserve.

The second one is really key and I don’t think anyone is doing right now. All fees that are charged on CoinMetro will be charged in the underlying asset that you are trading. If you’re trading Bitcoin, Ethereum or Litecoin, your fee will be charged in Bitcoin, Litecoin or Ethereum. However, CoinMetro doesn’t accept anything but XCM to pay fees. But you don’t have to worry about that because as soon as this fee is charged with Bitcoin for example, it gets pushed to the exchange as a buy order for XCM, so that fee of 0.1% Bitcoin was let’s say .00025 BTC. That amount gets pushed to the exchange as a buy order for XCM, it buys XCM, so we get paid in XCM and we burn a percentage of that fee. Depending on the size of the fee, we will burn anywhere from 0.25% all the way up to I believe 33 or 50%, I actually have to check my own whitepaper on that one. (laughs) Whatever it says in the whitepaper, that’s the number! Anyways, so every single transaction that happens on the CoinMetro platform will increase the demand for XCM on our exchange. As the usage of the platform accelerates, the demand accelerates and the supply dwindles as we burn percentage of the fees. Basic market mechanics tells you this — when supply is dwindling and demand is rising, there is only one thing that can possibly happen and that is the price rises.

Binance has a token buyback and burn program, so you can look where the price of their token started and where it is now. Add in the fact that we are not just an exchange but have multi-faceted approach with investment angles, with ETCFs to provide liquidity to the ERC-20 market; add those things into perspective and think about how much more of a push to the price that may induce and you can get an idea of where we suspect the price of this token will be in the months and years ahead.

Will there be an airdrop of tokens?

Kevin: We didn’t plan an airdrop but I do think sometime between now and the end of the main token sale we’re going to organize some “shared” airdrops. I’ll give you the short version here. Our ETCF is a very important piece of the platform to me, and it may be the most important piece for several reasons. The ERC-20 market needs liquidity. The reason why we even talk about dumps is the fact that as soon as an ERC-20 token goes on the market, most ICOs say “Oh, oh, we’re gonna get listed on those 15 exchanges” and then most contributers say “Wooow! That’s great! 15 exchanges!!!”. In reality, from a market perspective, that’s horrible! Here’s why:

Initially you’re an illiquid token, you have no liquidity backing your token whatsoever other than maybe tokens that you’re holding as a reserve. Then you spread that illiquid token to 15 different locations where the only thing people are going to do on day one is sell it. You’re having sell pressure at 15 different locations. Let’s say at that one location you’re very illiquid and you have more sellers than at other places, its price falls 20%. Everyone at the other locations sees that and they jump on the sales where they are because they don’t want to lose that 20%. Then you have 30% fall on another exchange, then 35% on another one and you just get a snowball effect. ERC-20 tokens need liquidity and they need it from somewhere. The ETCF is going to provide that liquidity to a certain extent because investors will come in and say “Oh, look! I can get on a ETF-style aggregated basket of assets in the healthcare industry!”. Now, maybe in the healthcare industry there are three or four or five tokens that have done super well and that’s what these investors see, but maybe your token from your ICO, that just launched and hasn’t done that well is also basketed in there. So when the client buys that ETCF, they are buying your token as well, you get some liquidity.

What we’re going to do is start looking at ICOs, we’re going to find the ones we like and we’re going to offer them ETCF listings for free. In exchange we’re going to ask them to do airdrops of their token onto our Telegram group, and in exchange for that we may also airdrop some of our tokens to their customers. So I believe we may see some airdrops, maybe of our token but maybe also of other tokens in the future during our main token sale, so stay tuned for that. We will make updates on Telegram when we get close to that point.