A Q&A with Blockport – The Crypto Exchange Running An STO

What problems does your company solve? What demographic of people have these problems?

Blockport believes that there are five fundamental issues that hinder retail consumers and the general public from participating and investing in the new digital economy of cryptocurrencies.


Lack of Usability:
The user-interface (UI) of current exchanges indicate that they are primarily built for professional traders and tech-savvy consumers. Therefore, current solutions are generally still far too complex for the average user to understand and for mass adoption to take place.


Lack of Liquidity:
Limited liquidity makes it harder to trade, and results in higher investment costs due to a lack of people buying and selling assets on the majority of existing exchanges. In the current market, liquidity is fragmented over multiple segmented marketplaces. This results in multiple illiquid smaller markets and makes it harder for consumers to easily purchase digital currencies at desired prices.


Lack of Security:
The highly liquid exchanges which have the most users and trading volume are centralized exchanges that keep customers’ cryptocurrency in the exchanges’ wallets. These exchange models have unfortunately proven to be extremely susceptible to internal fraud and hacking.


While decentralized exchange solutions may address the security issues mentioned above, decentralized exchanges have been largely unable to deliver the user experience that is needed for beginning users, exposing them to new risks like loss of their private keys.


The remaining two issues are non-technical barriers that reflect limitations on trust and use of existing exchanges and broker services.


Lack of Transparency:
Aside from hidden liquidity costs, exchanges and especially brokers are not always transparent about the actual commissions and fees that are associated with a trade. This results in an overall increase of mistrust of exchanges by consumers.


Lack of Education:
Current solutions lack proper education and knowledge sharing functionalities that are necessary to help beginner investors get familiar with the new digital economy and stimulate the overall adoption of digital currencies as a valuable asset.


Collectively, these five issues are imposing high barriers for the mainstream consumer market to participate in the new digital economy. Therefore, Blockport has been – and will continue to be – designed to play a key role in overcoming these barriers and facilitating the transition towards the new digital, cryptocurrency-based economy.

How does your company solve this problem?

Blockport is not just another Bitcoin or cryptocurrency exchange. In fact, Blockport aims to accomplish something far more valuable by tackling the key pain points of mass adoption: bridging the high-tech blockchain world with the “real” world through an intuitive user-experience, social trading features, and a knowledge sharing community. We believe that these factors play a major role in the journey towards mass adoption of cryptocurrencies as a valuable and interesting asset class that constitutes the internet of value.

  • We built a user-friendly platform that takes users through every step, from signup to making their first trade.

 

  • Blockport is also connected to multiple external exchanges where we aggregate liquidity from, and offer the best prices to our users.

 

  • Thirdly, our unique social trading features allow users to follow and copy lead traders that share their experience and knowledge with beginners. They will receive a reward in BPT, our native utility token that drives the ecosystem.


Here’s an article we recently published that describes social trading in greater detail.

Have you already launched a product already or is your product in development? How can interested customers access and use your product?

The first version of our platform has been live since early 2019. It’s a mobile and desktop app that allows users to buy, sell or exchange 15+ cryptocurrencies with fiat (EUR). The second version, which includes social trading, is currently in development.


Looking ahead, we want to build Blockport on a hybrid-decentralized architecture that allows users to safely store their funds on the blockchain and manage their private keys in a very user-friendly, “decentralized” way.


Furthermore, as a greater percentage of consumers enter the market, we expect that interest from larger institutional traders will also increase. As a result, our product strategy will expand in order to offer more business-to-business features.


The microservices infrastructure that we have developed for our retail platform so far can already be utilized as a backbone that allows businesses to exchange value in a global network of micro-economies and financial services. This could entail opening up our services for merchants, (micro) payments, banking integrations, and other upcoming industries.


Blockport’s long-term strategy is to become the backbone for future financial services that want to support a combination of centralized and decentralized exchange technologies. We envision this to be similar to a decentralized bank that offers consumers and businesses state-of-the-art financial services whilst enabling them to maintain complete autonomy over their assets.


To enhance its platform, Blockport released an Ethereum-based utility token, the Blockport Token (BPT), which is intended to be used for a wide range of exchange activities. It can currently be used to receive discounts for trading fees and in the future will provide our users with access to extra services, such as social trading functionalities. Blockport is currently developing additional uses for BPT to increase its utility.


Interested customers can try out Blockport by easily and freely creating an account at www.blockport.io.

How large is the market that you are serving? Over the short to medium term, how do you see your market evolving?

The market we are currently serving consists largely of beginner traders and crypto-investors.


This user segment faces almost all of the challenges described in the first question, but the most important ones are a lack of usability and a lack of (easy) access to knowledge. As a result, they are prevented from moving from just interested in the cryptocurrency markets, to actually investing, trading, or exchanging cryptocurrencies.


Beginner traders or investors


Beginner traders / investors are likely to buy and sell cryptocurrencies at a higher price through market orders if they have access to a simple and convenient platform. They seek convenience through simplicity, and trade or exchange with low frequency and low volumes.


As a result, beginner users will pay a slight premium compared to advanced traders, in exchange for access to our easy-to-use platform and the convenience that it provides. Moreover, we expect that, when they become available, the social trading features will provide beginners with a complementary service that allows them to learn from experienced traders and automate most of their investment or trading activities. This feature would provide value through convenience and knowledge-sharing.


Experienced traders or investors


Based on our initial market research and community feedback, this user segment experiences a lack of liquidity, transparency, and autonomy over their funds.


Experienced traders and investors are looking to trade cryptocurrency for the lowest possible price by using advanced order types. Additionally, they demand professional trading tools, a broad range of available and highly liquid markets, and a secure platform. They trade frequently and with high volumes. As a result, Blockport intends to charge relatively lower fees than the beginners, and offer them advanced trading features.


Additionally, the unique social trading trading features of Blockport allow experienced traders and investors to build a personal brand and earn additional revenues in BPT by building their own following, similar to influencers that are active on social media platforms such as Youtube, Instagram, and Twitter.


Corporate account / Business-2-Business


Currently, we do not accept corporate accounts or businesses on Blockport yet. However, when the internal matching engine and open API are released, businesses will be able to create a corporate account. This will enable them to use Blockport for high-volume trading, exchanging, clearing, settlement, payments, and collections to support their day-to-day business processes and operations.


This segment could consist of market makers, professional traders, brokers, issuance platforms, and payment services. Blockport intends to provide more detailed information regarding the fees for corporate accounts in the future as the services become available.

What would you like your customers to know about your business model? How do you charge your customers for your product or services?

Our revenue is based on: Trading fees, social trading fees and listings of new assets on the platform.


Our business model strategy is based on:

  1. Keeping the trading fees for the broker/beginner view significantly lower than our competitors (Coinbase, eToro, Luno, and other easy-to-use market order apps)
  2. Focusing on our value proposition of creating the best possible user experience
  3. Adding unique new functionalities to the platform (such as social trading and hybrid-decentralization)
  4. Combining this with BPT token economic models that create a natural incentive structure for users to add value to the overall Blockport ecosystem.


In the long-term, Blockport aims to become at least a top 30 digital currency exchange that bridges the mass-market with the new digital economy of cryptocurrencies. In order to achieve this, barriers to entry need to be diminished as much as possible, meaning that also our fees need to remain at an optimally low level, enabling us to rapidly scale our paying user base.


Increasing fees may result in increased profit in the short-term, but inhibit growth in the long-term. Therefore, we do not plan to increase the fees for high volumes, but only for low volume users that seek convenience, simplicity and instant “taker” transactions. Additionally, we will keep the fees low for high volume traders, or decrease it based on their monthly trading volumes. This fee incentive structure is important to effectively attract advanced traders, as well as crypto investors that trade or exchange in large quantities.

What makes you different than your competition? In what ways does your product or service perform better?

Our core value propositions and unique selling points are:

  • Easy-to-use. Seamless and intuitive user-experience that takes the user through every step of the process.

 

  • Social Trading. Social copy-trading features that enable learning through knowledge sharing, profile-following, and the imitation of trading activities. These features enable beginners to learn from experienced traders, whilst experienced traders are incentivized to share their knowledge with beginners through the intuitive ecosystem that the Blockport Token (BPT) provides. The unique BPT token model stimulates engagement, activity, unique content creation, and a knowledge-sharing community on the platform.
    Here’s an article we freshly published that describes social trading in greater detail.

 

  • Smart-order-routing system. Aggregating liquidity from external exchanges to provide the best prices for our users. Our smart-order-routing algorithm automatically slices our user’s orders in smaller orders, which are then distributed to multiple external exchanges Blockport is integrated with, and settled for the best prices.

 

  • Hybrid-decentralized architecture. This architecture is intended to enable trading in a centralized way to allow for high-frequency trading, whilst funds are safely stored in a decentralized way on the blockchain. Unique on- and off-chain protocol that allows users to manage their own private keys with the usability standards of Blockport.

New potential customers may like to know about your company's achievements. What kind of progress has your business made so far?

Milestones to date


2017

  • Core team formed
  • White Paper 1.0 released
  • Blockport community grown to 20.000 people
  • Partnerships with Osborne Clarke and ARK.io


2018

  • Sold-out BPT token sale within 12 minutes
  • Expanded the core team from 5 to 20+ people
  • Blockport community grew to 50.000 people
  • Launched the first beta version of the platform within six months
  • New partnerships with Bugcrowd and Tokeny


2019

  • Released the first full version of the platform
  • Blockport community grown to 100.000+ people
  • Launching multiple STO rounds
  • New partnerships with Nexo and TrustToken (TrueUSD)

Behind every great company is a great team. What makes your team special?

The founding team have a background in technology and business management, and the core development team consists out of senior developers with over 150+ years of experience in software development, architecture and DevOps. Our marketing and growth team has a lot of experience in SEO, SEA, FB/Google advertising, growth hacking, content and influencer methods.

Potential customers of yours may wonder how your partner network amplifies your services or products. Does your company have any partnerships worth mentioning? What do you cooperate with your partners on?

PwC (Big four auditor) – PwC assists us in areas of tax auditing and regulatory compliance.


Osborne Clarke (International Law Firm) – our legal advisors. Together, we’re paving the way for effective regulation within the cryptocurrency space.


ARK (cross-chain protocol)
– Ark has been a technical partner of ours since the beginning, and it’s been great to grow alongside each other.


Nexo (crypto backed asset lending platform)
– Receive a loan through the Nexo widget in your Blockport dashboard.


TrustToken (USD Pegged stablecoin)
– The partnership is a large first step into Blockport’s US-market roll-out, and will allow Blockport users to begin trading BPT with a collateralized token backed by the US Dollar. This platform integration will see Blockport supporting USD-backed trading pairs and serves as a stepping stone to accept US Dollar deposits on the platform.


Bugcrowd (Security research platform)
– We work together with Bugcrowd to continuously audit the security of our platform. As an exchange platform, we place significant emphasis on cyber security, and together with Bugcrowd we ensure that our platform is always optimally safe for our users.

What is next for your company? What can your customers look for in terms of further development of product and services?

Aiming to launch the following features in 2019:

  • Advanced trader view
  • Social trading features
  • dWallet


Aiming to significantly grow our user-base. In 2018 we allocated 2% of the total budget to marketing, this year we will increase this to roughly 24%


Aiming to expand to new markets: We see significant demand in the US market. Therefore we plan to open our doors to 5 a 10 US states in 2019.

Why an STO?

We have gone through tremendous growth in 2018, and we’re now preparing to fuel our growth for 2019 and beyond. Since launching our beta platform in August last year, our user-adoption ratios have been very promising, resulting in our paying-user activation ratios being four times higher than those of Coinbase.


Now, we’re entering into a position in which we can scale this growth up rapidly. In line with the growing trend towards digital marketplaces, we’ll be tokenizing a portion of our company’s shares – granting investors an opportunity to become shareholders of the Blockport company through a fully-compliant STO.

keyboard_arrow_up

Security Token Network Newsletter

Unbiased and quality industry news and analysis