Ilies Larbi on Ouinex’s alternative to traditional order book exchanges

0:00I'm Ashton Addison from the Crypto Coin Show and today on Blockchain Interviews, we're joined by Elias Larbi, CEO and founder of Win X, a trading first exchange giving retail and pro traders multi-asset exposure like crypto assets, derivatives and perpetuals of trade five stocks and and other assets as well. Elias, welcome to the show and thanks for

0:22taking the time. >> Thank you so much, Ashton. Thank you for having me. >> Yeah, excited to dive into Win X. I feel like the market really needs an exchange that is multi-asset right now. I know the most professional traders are moving from crypto into things like oil, into things like perpetuals and and derivatives of stocks and equities and it's there's no one place that's

0:45good for that and it looks like Win X is set out to solve that. Maybe you could start with just a bit of a high level on Win X, what you and the team have built out and why you think that it's different and and what needs to be solved here to keep traders in one place. >> Yeah, sure. Thanks so much, Ashton. Look, I have about 20 years experience in traditional finance working for, you

1:11know, one of the largest forex brokers um uh out there um and in 2022 um you know, I I you know, I realized that we were getting a lot of feedback from users uh saying basically complaining about the fact that the user journey was super fragmented because they had to have right? A crypto account with an exchange, Binance, Kraken, actually whatever and then if they wanted to

1:37trade trade five, they needed to go to more traditional financial broker. Um and so the idea was like, look, at the end of the day, it's trading. Let's try to build a product that merges the two, right? And so this is what Win X was based on. Win X is now a live trading platform, an exchange that allows users to trade, you know, spot crypto the way they would do it on a

1:58Binance. It allows It allows them to get access to all the bells and whistles that are related to also, you know, crypto, things like earn, stake kings, you know, launchpad, also for project listings. But at the same time, and here's this is where the the advantage is, is using that crypto that they have in their wallet, that can be used as margin to also now trade derivatives on

2:19all types of asset classes. So, they can trade perpetuals on crypto, but they can also trade derivatives on things like stocks, uh stock equities, Nasdaq, Dow Jones, DAX. Um They can trade forex, you know, foreign exchange, euro dollar, pound yen, whatever you, you know, you have in mind. We We have it. Um and and and so we found this this vision to be true and

2:42validated by what we're currently seeing in the market. So, if you look at now the biggest exchanges, you see that, you know, every, you know, uh quarter or so, uh you know, they start launching you know, tradefi assets. So, we we saw Binance for simply launching gold. I think MEXC has a few bit of metal. Uh HyperLiquid is talking about an S&P now. Um

3:03and so we're seeing this come. Um and we are already here, basically, right? So, it's the movement is going to there, but we've already have it. Uh and the way we built it really is, I think, optimal. We just basically took the best of the traditional financial infrastructure and merged it with all the new and innovation related to blockchain, and then that's how we built

3:24the platform. >> That's amazing. Yeah, it's great to see I think one of the main issues that perhaps crypto exchanges have had with traditional stocks or equities is having enough liquidity compared to those traditional brokerages that have been around for multi-decades that have old money in there and maybe uh better slippage or I don't know if I probably

3:48not better fees, but at least there the volumes are much higher on the traditional brokerages, no? >> Yeah, you're absolutely right. And so this is what you know, there's two ways to build this, right? And we've seen all the crypto exchanges go the perpetual route, right? So all the trade five products that they're now trying to to put out there is is done through, you

4:08know, the the trading infrastructure that they they already have, right? Which is perpetual. Now the issue is when you do this on a center limit order book is it's it's kind of a new product, so you need to have the market makers that are willing to provide liquidity for this and you need to have obviously enough people trading it. So at the beginning and if you look at it now, if

4:26you go to any exchange and look at their trade five products, actually if you compare to what's, you know, what you can find in the traditional financial space, the prices are absolutely the cost of trading is absolutely huge, right? And the liquidity that's actually available is low, which translate obviously in exactly what you said, more slippage,

4:44meaning, you know, less than a favorable environment to trade. We've done this this differently. What we've done is we said, "Look, retail trading traditional financial assets has been here for over 30 years now. Okay? And the the industry matured to to a level where there is no actual commission that you need to pay when you trade trade five products with the trade five

5:07infrastructure. Your spreads are about seven times you know, cheaper. And then on top of that the liquidity is about 100x cheaper. So we did a little comparison and I'm taking hyper liquid. I love this company. Uh but I'm taking it as a comparison because that's the hype of the moment, right? And we just kind of looked at their order book on euro dollar for example and compared it

5:27to ours. Um they're doing they're doing it the quote unquote crypto way on perpetuals. We've done it the [clears throat] trade five way, which is the way that's been, you know, done for the past 30 years. Um we're about seven times cheaper, which is very odd. We're just a startup with not much clients when there's there are already, you know, billion dollar

5:45company and usually the the bigger you are the tighter your you're right? Like that your your your your spreads and your costs are it's right right? And then from a liquidity perspective, we're about 100 x cheaper. If you if you actually sum their order book even the five probably around 500k on the first whatever five layers, we have 10 million on the on the first five layers. So

6:04nowhere near, right? Um I'm not saying there's one way or the other that's the right way, but our vision is there's things that already work that have been already built and the efficiencies have been proven and we want to use them. There's no way there's no reason for us to build another route, right? Especially that from a retail perspective, the user experience is

6:26absolutely the same. Right? You can go long, you can go short, place your stops, your limits, you have a margin system, there's no difference. So why not just use something that already works and that's 10 times cheaper us. >> Mhm, definitely. I love that and and I wish more crypto exchanges could do that, but I feel like there's more complexities. Maybe the fact that you're

6:46using derivatives and futures versus like spot prices or stocks themselves, maybe you can explain that more on why what's limited previous crypto exchanges from doing stocks and crypto. >> Yeah, I think I don't think they're limited, right? Like the the the the reality is some of them are starting to come in. We've seen some also provide now I think oil and

7:11and and gold. And I think recently even hyper liquid has some kind of an S&P product. I think the difference lies in how you build it, right? So let me just give you a very simple example. Um the crypto environment right now and crypto exchanges and you know, whether it's DEXes or CEXes, they're building on their current trading infrastructure, which is, you know, the central limit

7:34order book model, which is perpetual, right? They call it perpetual. You know, you can trade perps on Bitcoin and Ethereum, but you can also now trade, you know, perps on on gold and whatever. So, the issue with that is in order for you to trade enough liquidity and um you know, attractive pricing on a perp, gold, let's say, right? You really have to have the market makers backing you

8:02uh and and basically, you know, structuring the product for you and willing to post a liquidity, right? So that users can trade on it. And the whole market infrastructure already exists. And liquidity and and uh you know, and efficiency in price is absolutely, you know, established and and monumental already. So, why would I go and now structure this as this, you

8:23know, Web3 product and start from scratch and try to go convince market makers to, you know, to to price this when the whole infrastructure is is is very efficient and has been here for for a lot of time you know, a long time. So, we've done a little benchmark, right? For example, now the hype is on, you know, hyperliquid. You know, we know that their Eurodollar. They do have a

8:41TradeFi instrument called Eurodollar. Um and we compared, you know, the liquidity and the pricing that they have versus what we have on the platform using the true TradeFi infrastructure. Um We're about seven times cheaper for any user, right? It's not small, right? And they have a liquid in millions of dollars. They're a huge company. We're barely a

9:00startup. We're still seven times cheaper, right? Which is a bit, you know, odd. On top of that, we have probably on the order book a 100x more liquidity than what they have. So, on on the floor of, you know, the first four or five layers, you'll see they're probably have a sum of 500k available. We have 10 million on these four or five layers available, right? And and the main

9:22difference is our approach wasn't to just blindly build based on, you know, this trend of perpetuals, but it's really let's take the best of both worlds. We know spot crypto blockchain is absolutely the most of technology, but we also know that in the trade finance industry, you know, in terms of efficiency in trading, right latency efficiency in prices, liquidity and so

9:46on, it's been here for 20 years. >> It's very interesting and mentioning hyper liquid, they've been sort of the the golden the golden boy or of crypto in the past few months despite the market sort of consolidating and not having that much momentum. The the hype token is also like reaching all-time highs, which is amazing. Um but and I think what you

10:12what you touched on there is the liquidity is super important. Uh especially when you're looking at traditional finance platforms that have been around for decades, you know, trying to make securitized token offerings with low liquidity, it just doesn't work. So, how in the way that hyper liquid has great liquidity, but you guys have more, um how do you guys manage that?

10:41>> So, first of all, hyper liquid is an amazing product. Uh they're doing amazing and it's just a you know, a positive for the whole crypto industry, you know, in general. >> And so, the fact that they've been here for the last 20 years, it just you know, prices have been optimized, liquidity is absolutely huge. I mean, if you take the true FX market, euro dollar, I mean, in

11:01the back end, you can have Citybank pricing, you can have Deutsche Bank pricing. I mean, you're talking about tier one players absolutely huge liquidity. You know, if you're talking perp on on on euro dollar, I mean, yeah, you might have a couple of market makers, the GSRs of the world or whatever, but except the the the you know, to to to price that,

11:21but it's nowhere near the efficiency and the the establishment that that's already there, you know, from the past, you know, decade. So, we're just again, we've just leveraging what already exists and that's been done well and efficiently. And we're not trying to, you know, create this new product as a perk. From a user perspective, the principle is the same though. You can go

11:42long, you can go short. You place your stops, your limits, you need to post collateral, there's a liquidation price. Nothing changes really, um except maybe the formula and the way the formula for funding and financing the the the positions is being computed, but other than that there's really from a user experience it was no difference. Just a lot cheaper and

12:01better liquidity. >> Mhm. You've mentioned the euro dollar a couple times. It looks like uh you're in France right now as well. Is that where the majority of the users are? And can US access it? Can can global uh participants access? >> Yeah, so euro dollar historically has been obviously one of the most liquid and the most traded currency pairs in the world, right? Uh I just mentioned it

12:26as an example. Obviously, you know, anyone trading on Win X can access it and can can actually trade it. Um can use it also to hedge or, you know, however they they want to use the products. Um recently we've seen our record volumes actually being made on oil more than than on on euro dollar simply because of the geopolitical events, right? Everything that's going on with Iran.

12:46We're seeing a lot of volatility on oil. And again, that's the beauty of this platform, right? It's you're you're into crypto, you have some Bitcoin, you have some UAV teams, and you're like, "Whoa, nothing's happening right now. You know, Bitcoin is is still dropping or around the 70s uh 70,000." Um well, look at the oil market, right? Amazing opportunities

13:05going up, it's going down, lots of movement, right? Volatility means opportunity. And so, people are trading that. So, we've seen this cross sell happen actually very intuitive. >> Hm, very interesting. And you mentioned leveraging crypto to be able to trade other assets so with collateral. Can you explain that a little bit more? >> Yeah, so traditionally trade finder that

13:32we're talking about the trade finder brokers you want to you know go and trade all these trade finder you know products you need to send dollars or euros you need to send shots as collateral right that's the margin that you're going to be using to trade. Um we removed that. You can use USDT and soon we'll be launching a full first margin system where you'll be

13:51able to use all of your coins Bitcoin and whatever you have uh in order to to to trade the trade finder products. So what we've done is instead of you know having the user have to go through you know all the traditional banking systems sending in the wire or deposit in through a card all that implies cost we've also allowed them to just simply hey send USDT send your USDC send

14:14Bitcoin trade it but at the same time if there's nothing to do you can leverage it and basically use it as collateral to trade all the um you know the global markets. >> Mhm. >> We're trying to take the best of both worlds right? Crypto very fast transfers right? Easy of access blockchain everything transparent and you access you know the trade finder

14:36structure which is a lot you know more sophisticated and efficient than the current perp market. >> Definitely. It's super nice to be able to margin with your crypto or your your stablecoin assets without having to be in fiat and go back to those old rails. >> Correct absolutely. >> And with the leverage I saw that 1 X can do up to 500 X leverage. Is that is that

15:03true? And you know I think a lot of people maybe they're familiar with 2 X 20 X 50 X maybe 100 but 500 seems like you really have to manage your risk if if who is that really set for? >> Okay so 500 X is obviously the maximum leverage that potential and it's not in all instances. Okay, let me explain this to you. You probably seen when you're talking

15:27about, you know, 50X and you know, 100X, you probably seen most of the crypto space, right? Now, obviously you always need to look at the volatility of the actual underlying product. So, if you look at Bitcoin, its volatility is pretty huge, right? Compared to a trade fire asset. If you take, you know, a meme coin, the volatility is even more. So, actually a 100X at a volatility of

15:48X% here on the crypto is probably the equivalent of a 1000X on a euro dollar, which is super stable and the volatility is super low. So, actually if you're doing 500X on your euro dollar, right, it's most probably less dangerous than 100X on any crypto perpetual market just because of the of the volatility of it. >> Uh that's a good function, for sure.

16:12Um and you guys raised almost 10 million from thousands of investors, and I saw that there was zero VCs in it. Uh can you explain that a little bit more and and sort of the theory behind that? >> First of all, my team has done a pretty good job with I was, you know, doing things on the development side, so I got into contact with a lot of trader communities across the globe.

16:37Um and and one of the, you know, largest communities of French speakers, they're actually retail active traders, more from the trade fire space. And we've just exposed the project, right? We just came in and said, "Look, guys, this is what we're trying to build. You know, do you validate your vision? What do you guys see that we should, you know, have, not have, add, remove?"

16:58Um and you know, they were super excited about it. So, the next step was obviously we needed funds to get this thing started. We launched, you know, a pre-sale of our future upcoming token that should be listed in a few weeks. Um and you know, it was just an overwhelming success. Now, this was building in multiple phases, right? It was the first phase where we did the

17:15first raise. We proved to them that we were building, we were, you know, constantly getting their feedback on how to improve the platform and functional and so on and functionalities they they wanted. They saw how, you know, we were delivering and executing and that gave, you know, that led to the second round where, you know, they were happy to invest even

17:35more and this is how we we got to the to the next level. >> That's that's amazing. And with that future token, is that the the the Wicks token I saw? Can you guys explain Can you explain, please, exactly how that functions in the ecosystem and does it create a sustainable ecosystem? >> Yeah, absolutely. So, Wicks is is the is the

18:02basically the token of the exchange that's going to get you access to reduced trading fees. It's also going to going to give you access to cashback on all of your derivatives trading. So, the more you trade, the more you earn. Every 24 hours you get credits into your account in real money, USD. You know, it gets credited directly to your account. So, the more you do volumes,

18:23the more you you, quote-unquote, get cashback from your from your trading volume. You also get, you know, the more you have Wicks and stake it in our staking offering, you will be able to get higher API on our earn offering, right? And then finally, there's a buy and burn mechanism which makes the whole thing deflationary where a percentage of the revenue is

18:47being allocated to buying back and burning the Wicks. >> Interesting. So, do you just take a page out of like the BNB token book with with the a token, you know, standard exchange token play? >> Yeah, so we did do that and then we added, obviously, new features like derivatives cashback, for example, that wasn't really just on Binance. The one thing we didn't do is the ability

19:14for users to pay their trading fees using Wix just because it's just too early for us to do this. Uh, but there's quite a few, you know, the the Wix is also going to allow you to participate in our launchpad. We have a you know, very good launchpad obviously so you can see that we we really grow it. Uh, they're all high network retail people so we can, you know, we've proven the

19:34ability to to raise quite a bit for projects and and the token will, you know, give access to better allocations to the users for new projects. >> That sounds great. And for the people who haven't created an account or or haven't weren't one of those thousands of investors, can they still access the pre-sale or get involved in in the token early on?

19:58>> So, we have two types of investors, right? We have the initial investors and the initial investors that invested in the pre-sale of the token and then we have the the retail investors that invested in the equity in the chain that are actually shareholders of the company. >> That's great. Well, that's always nice to Well, I guess there are no VCs but,

20:15you know, they always say the VCs dump on you in in in day one and just it's hard to build momentum on a project that has a long-term vision. >> Yeah, sure. So, I think, you know, one of the things that um where we kind of feel privileged is we were able to have enough funds, you know, raising enough funds from our community of retail traders without

20:35having any kind of need to go to, you know, VCs, right? Uh, and one of the main things that we always had in mind is now I think the crypto industry is mature enough to understand that VCs they invest in your token, one of the first thing that they'll do as soon as they have the opportunity is to dump on the project and we've seen those Wix, we've seen these candles, right? We know

20:56how it happened. I've spoken to a lot of VCs. We haven't taken their offers because we know how this works, right? Um and so there's also other actors that are are are can you know can put the token at risk. There's also market makers. Right? So if you actually hire a market maker on a retainer model, that should be okay. But if you go and hire a market

21:18maker on the what they call a loan model with a strike price. That can be very dangerous they can manipulate the price. You know, they get their allocation and then they just dump it on you. And the third actor which you really have to be careful of as well is giving up unlocked and unvested tokens to exchanges. Right? Cuz if you go to the tier one exchange, most of them are going to say,

21:40"Okay, well I need X percent of your total supply, you know, fully unlocked." That how dangerous is that, right? At any point in time, two three percent of your total supply, I mean they can just dump it. And as usual, who suffers from that? The retail guys, right? The retail guys are buying cuz they're you know, they're looking at the hype, they love

21:56the project. And who's making money? Always the same guys. So this is what we wanted to avoid. So no VCs. Our market maker is a very reputable market maker. Um and we're actually paying him on a retainer model so there's absolutely no incentive for them and they don't actually just don't own tokens at all. Um and then the exchange is us. We don't really need to go and list on another

22:16exchange, right? So we don't need to give up tokens. So everything is super tight. You know, and and all the conditions are met uh hopefully to have a good launch. >> Yeah, no that's that's good to know and I was curious about the other exchanges because some of these exchange tokens, if you have an exchange, of course that's the perfect home base. Uh but

22:35some like to cross list or ideally the other exchanges, you know, cross list because they want to capture high volume that's already on the main exchange. Um so I don't know if that's a part of the future plan. But um yeah, no it's no good percentages away. >> So it it is part of the future plan. But the way we think about it is there's two ways, right? Either you're small

23:01project, you haven't listed yet, you don't have that hype just yet, and you try to go on a tier one exchange, but then what you'll find is they a lot of them like you know you're going to pay quite a bit and you're going to need to give up tokens. So our strategy is look let let's launch with what we have. We think we have a good community. We're going to be launching a

23:19big marketing campaign around the the the the the token. And then if everything goes well and the token is going up and gets, you know, gets a bit of hype around it, then it's a lot easier for me to go out to a tier one or tier two and just say, "Guys, we also want to list with you guys, but I'm not giving up any tokens. If you want to If you guys want a piece of that juice,

23:38you know, that these are the terms." So it'll give me more leverage to get a better condition. The first thing that I want to protect obviously is the is the curve of the token um and obviously our community. >> Yeah, definitely. So what's the best way to follow along with the the Wicks token launch and like trading competitions and everything new assets being listed on

23:59Winx? >> I think the best way to do it right now is Twitter really and then we also have a Telegram channels. And then I invite anyone to obviously sign up on the account to you know, you don't have to deposit. The first thing that we need we look for as a company is feedback. So we're very open to this. Anyone that's you know watching this go on live.winx.com,

24:20sign up, play around with the platform, send us some feedback. Sometimes we even give out rewards for you know you know very you know good feedback that you know either bug or or good stuff like this. Um and um and yeah, I think look I think we're we're set to to have a nice launch and and we have a product that's absolutely solid. We're regulated in

24:41multiple jurisdictions. We're doing things the right way. It took a bit of time, but we're doing things the right way. It's the listing of the Wicks is not just a token. There's a full 37 people team. There's a full you know trading platform, you know, regulatory obligations. So you know, it's it's a real product. >> Definitely. Well, I'm hoping the best

25:01for you guys, wishing the best and uh especially with this multi-asset and I wish uh crypto, you know, was super hot all the time and people just love trading it, but these professional traders, they move between different assets and, you know, stocks have been pretty hot right now uh and oil because of the conflict uh and it's like you don't want to have to keep withdrawing

25:23and move your capital over to this other exchange then come back and it's like just put it in one place. >> Absolutely. Ex- exactly. Absolutely far. That's the spirit. >> Well, thank you, Ilias. Appreciate the time. Uh let's follow up again in the near future. >> Awesome. Ashton, thank you so much for inviting me.