Exchange Working Group Update

As we move into the upcoming grant round, we want to give an update on where the Exchange committee stands right now, and the current state of our last grant.

Over the past couple of months, the exchange committee has added @Anton Ilzheev and @WB , both of which have been fantastic and active members. Our active members consist of Matt, Anton, WB, and myself.

We continue to work closely with Republic, a firm assisting us with pursuing listings of FCT, with weekly phone calls, and engaging with them and exchanges in emails and chats.

At this point, we have talked with or continue to have regular conversations with nearly every top-100 exchange, and have a pretty good understanding of what each exchange requires and which exchanges we should target for the largest impact with the funds we have available.

We also continue to work with Liquid exchange to enable deposits and withdrawals of FCT.

Last grant round, the committee was awarded 30k FCT which, at the time of voting, was worth $3.50 per FCT. By the time we received those FCT the price was at $2. From there properly spread risk on the way down, and did not remain 100% in FCT.

We have not spent anything from this previous grant, as the value we had to work with from this grant once issued was not going to be enough to secure a listing that would really help our liquidity.

Moving forward, we have a couple exchanges in our sites that would fit our criteria, and we are targeting a grant in the upcoming round that should land us in the range to be able to secure a listing.
 
As we move into the upcoming grant round, we want to give an update on where the Exchange committee stands right now, and the current state of our last grant.

Last grant round, the committee was awarded 30k FCT which, at the time of voting, was worth $3.50 per FCT. By the time we received those FCT the price was at $2. From there properly spread risk on the way down, and did not remain 100% in FCT.

We have not spent anything from this previous grant, as the value we had to work with from this grant once issued was not going to be enough to secure a listing that would really help our liquidity.

Moving forward, we have a couple exchanges in our sites that would fit our criteria, and we are targeting a grant in the upcoming round that should land us in the range to be able to secure a listing.
Thanks for the update.

Are you able to disclose total resources the committee has currently available?

Discussion: The community has awarded the exchange committee multiple large to very large grants over time. I'm generalizing, but there is always some explanation of where the money went, or why it didn't work out. Last round, I believe the community provided 150% of the original grant proposal FCT request to enable "action" with assurances that this time would be different. I understand liquidation was a challenge as I'm sure it was and is for all large grants.

Question: How are we in a different place now? In your [or anyone's] opinion, why should the community expect different results this time by again providing the committee additional resources? Any clarity would be appreciated. Thank you
 
Thanks @Jason Gregoire

The 5k FCT grant the exchange committee received in 2018, and the 5k FCT grant the committee received in early 2019 were both spent fully.

These funds focused on getting on smaller exchanges that are often required for the liquidity to enter medium and larger tier exchanges.

Speaking relative to other expenses of this protocol, or expenses other projects incur on exchange listings, this is a minuscule amount to spend.

Last grant round, we went for a larger amount. We stated in that that application that we were going for a full 30k FCT so that IF FCT stayed at the price it was during grant round voting, we may be able to target a medium to large exchange. We also stated we would not spend funds on anything below a medium to large tier exchange. By the time FCT were paid out, the price had dropped significantly, and out of the range of what we could use to target a medium to large exchange. Though we continued to pursue listings aggressively, we kept our promise of not using funds for a smaller exchange, which is why we still have the entire amount available from that grant round. In this case, "action" would have been detrimental, as we would have been draining funds for actions that wouldn't have a high chance of moving the needle.

So now we are again in a position where we can get back in the range of funds necessary by putting forward a large grant this round, and combining it with our grant from last round. These two grants combined at current prices is about equal to just last rounds grant at the price FCT was during that grant rounds discussions.

So the most direct answer I can give you is that this isnt really a "this time" vs "last time" situation, as we never had a chance last time by the time payouts happen. So if it was worthwhile to you last round, it probably still is. While with a project like this we can never be certain of a result, we have to decide as a community how high of a priority an exchange listing is. There is no reason to believe that we will have a better shot than the exchange working group + Republic will give us given the work, connections, and know how we put into this. We also know that these FCT won't be spent on exchanges outside of a medium to large exchange, so we will most likely either be left still with the funds, or with a medium to large listing. I believe the latter is more likely, as we have a couple targets that seem accepting and are within our range.
 
Thanks for the well explained answers,

Two quick follow up questions:
1) Can you say which of the exchanges you are pursuing you feel are most achievable?
2) Can you tell us how much more in funding the committee expects to need to move forward?

Thanks
 
Thanks for the well explained answers,

Two quick follow up questions:
1) Can you say which of the exchanges you are pursuing you feel are most achievable?
2) Can you tell us how much more in funding the committee expects to need to move forward?

Thanks
1) Due to private nature of conversations/agreements with any exchange, we can not reveal this information until official announcement
2)
  • Exchanges listings fees, unfortunately, very costly. We filtered out bad exchanges and exchanges with bad price/quality ratio. We are also trying to negotiate the price down where it is possible.
  • We wanted to accumulate enough funds across 2-3 grant rounds (it was mentioned in previous grant discussion, here) to secure medium to big exchange listing.
  • Considering the situation with VCC and US ANOs, we need to secure new listing asap, so we decided to secure enough funds across 2 subsequent rounds (previous and upcoming), not 3.
  • Currently, in the upcoming grant round, we applied for certain amount — a required minimum — that, combined with previous grant, should be enough for covering listing fee on good exchange.
 
1) Due to private nature of conversations/agreements with any exchange, we can not reveal this information until official announcement
2)
  • Exchanges listings fees, unfortunately, very costly. We filtered out bad exchanges and exchanges with bad price/quality ratio. We are also trying to negotiate the price down where it is possible.
  • We wanted to accumulate enough funds across 2-3 grant rounds (it was mentioned in previous grant discussion, here) to secure medium to big exchange listing.
  • Considering the situation with VCC and US ANOs, we need to secure new listing asap, so we decided to secure enough funds across 2 subsequent rounds (previous and upcoming), not 3.
  • Currently, in the upcoming grant round, we applied for certain amount — a required minimum — that, combined with previous grant, should be enough for covering listing fee on good exchange.
1) Is this really the case; with the history here, I'd ask you to reconsider. I'm familiar with NDAs, but to not be able to mention which exchanges you are prioritizing seem too conservative and beyond any normal NDA. This what we've been told for years, let's get some names so people have an idea of what the committee is actually trying to do.
2) can we get a range? Of what this might cost? 100-$1000; 1000-$10000, 40000-$80000, 90000-$300000?
Just because it is a "reputable" exchange doesn't mean buying our way in to too high of a cost is worth it. IMO, if you want our support to give the committee yet more precious-few resources, we'll need a little more transparency. Thank you
 
1) Is this really the case; with the history here, I'd ask you to reconsider. I'm familiar with NDAs, but to not be able to mention which exchanges you are prioritizing seem too conservative and beyond any normal NDA. This what we've been told for years, let's get some names so people have an idea of what the committee is actually trying to do.
2) can we get a range? Of what this might cost? 100-$1000; 1000-$10000, 40000-$80000, 90000-$300000?
Just because it is a "reputable" exchange doesn't mean buying our way in to too high of a cost is worth it. IMO, if you want our support to give the committee yet more precious-few resources, we'll need a little more transparency. Thank you
So let's take the top 15 at https://www.coingecko.com/en/exchanges where it actually filters for real vs reported volume. That'll give you a more accurate picture of how useful an exchange would be. We're not really looking beyond this top 15.

The top 15 will be dominated by top-level (kraken, polo, binance) exchanges and mid-level (kucoin, gate.io, bithumb) exchanges.

What does a top-level exchange cost? Either in excess of $1 million or, funnily enough, nothing at all. Imagine paying nothing for a top-level exchange! They do, however, want either trading volume or the promise of trading volume in return, or whatever else is so extremely beneficial, ground-breaking or high-profile about a project that it would put a spotlight on that particular exchange (think the exclusive Tezos listing for Coinbase Custody). I'll let you be the judge of how Factom would rank in those realms. That doesn't mean we're not having those talks, it's just extremely uncertain and not worth basing a grant fund strategy on.

The previous Exchange group has already tried the worst possible strategy. Spending between $5k to $10k on several low-level exchanges because we wanted to be cheap. Ever walked around in Barcelona or Madrid near a tourist plaza where empty restaurants wave you in? That's what low-level exchanges do. They're the tourist traps for small-cap projects like Factom. We're trying to be responsible now.

So there's one reasonable scenario remaining of where to spend grant funds. Mid-level exchanges. Real volume, real users, a real track-record of being legit. Listings will range between $100k and $500k. That's right. Some legit mid-level exchanges will charge you a whopping $500k. As an Exchange Group, we're looking very carefully at this range to determine the best price-quality offer. Some exchanges may charge less money, but have a lot of pairs with near zero volume. That's something we discuss. Do we want to take that risk of paying $100k and becoming a zero volume coin?

At the other end of the spectrum, do we want to spend $500k, with actually many of the same risks I've just described? Probably not, because getting $500k would be extremely difficult at this juncture.

So take my word for it, we're trying to be as efficient and responsible as we can. Maximum impact for a real listing instead of the fake nonsense we've seen in the past. However, even the low end of what legit mid-level exchanges ask is still a lot of money for the Factom Protocol. That's something we either need to accept and adapt to very quickly, or we lose the exchange game. We only have ourselves and our inaction to blame.

And that's why the strategy has been very clear for a while now. We accumulate these funds over several grant rounds. We either get these good mid-level listings or we keep the money we've been accumulating as we won't be spending it on anything else.
 
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