How to connect real assets to cryptocurrency spot exchange
As we already said before, one of our goals is to connect real world to crypto. Many of you already heard before that there is already some companies who offer you to buy CFD on real goods with Bitcoin. In fact they usually understand under “real goods” FIAT currencies.
So if we will look closer, we will understand that in fact its classical USDT/BTC or USD/BTC trading. Difference that main such companies activity is a FOREX operations on differences between FIAT currencies exchange rates. But when we are taking about classic spot exchanges which have various brokers connected on them, we are talking about pairs like Diesel fuel to US Dollar.
And this is traditional way for non-crypto world — buy goods for real money. But as we all know, we are crypto soldiers and our main assets is Bitcoin and Ethereum.
We made our own research to find if it possible to buy Brent oil for December contract with Bitcoin.
Any you know what? Not possible. There is no direct way to do that. You need to transfer Bitcoin to US Dollar, go to usual spot exchange and buy it with US Dollars. A bit complicated, agreed?
Don’t forget, you need to have a contract with a broker company. Also you need to have skills to use special software which provides broker. So if you want to make such transaction and will take your time, resources and make you nervous for sure.
What is our idea?
We trading for long time already and we passed all that steps. We exactly know that real good is also good source of income if you catch a moment to buy. We start to build Nutshell with our experience from real spot market. We do know spot and marginal trading from real life.
We also used that professional software which many traders like — Meta Trader. We remember 4.xx version and using 5.xx version now. We also found that this professional software is good for crypto. And in next year we hope to get it running for Nutshell.
Basic investments are high. There is no “light” package for server version. But however it really costs that money.
As a strong sides of this solution you can found following: a very high performance for order processing on any connected exchange (never mind if its crypto or not), no delay from graphical UI — its dedicated application and it use own socket which is remove delays, its directly connected to exchange via API, it have it own mobile clients, robots, macros and tons of add-ons — everything for trader.
When we did our own research — we found a very small amount of crypto exchanges which is support such options like Meta Trader. None of them was DEX. We know exact answer “WHY”.
High price and complicated updates deployment.
You need to be a real company to get MetaTrader license and trader terminal.
You need to develop connector to your exchange for MetaTrader.
You will face wallets issue — how to connect exchange wallets with MetaTrader accounts for sure.
This list can be much longer — you have just to start this implementation and if you never worked with MetaTrader as a broker administrator — it will end nowhere….
So what we are planning to do. Nutshell have in plans limited FIAT currencies support. We are not telling that it would be withdrawal right now, as it will require us to force KYC for all clients. No, we are talking about deposits and some FIAT operations which will be strongly limited for sure. It all will generate some FIAT amounts on our accounts. And we also planning to implement MetaTrader for professional traders.
So why we should limit it only to cryptocurrencies? We see no reasons for that. Difference with all real assets that you can not withdraw it on your desktop wallet. Its fact. And its almost all difference. Main plus of traditional exchanges which offer spot and marginal trading — its non-personalized accounts for person who will request it some when. Or not request.
Why we can not buy or sell non-personalized assets, with connector? We can. And will do that. Yes it would apply some additional fees on such vector operations. But it would work. It even will be showed as asset on Nutshell frontend. You will be not able to withdraw it directly from Nutshell and generally. We can not imagine person who want withdraw 10 thousands barrels of Brent oil :).
So, how it would work:
Nutshell MetaTrader server will have additional liquidity provider — connection to real exchange broker server which is also running over MetaTrader and you will be able to make contracts via USDT or BTC as base currency and Brent Crude as quoted currency. We not decide yet: will we add it on frontend of Nutshell — exchange rates graph, order books and other related items or we will do that only in MetaTrader terminal and only show your balance in wallet section. This is point of discussions.
But schema of this processing is quite simple. Our MetaTrader is placing remote order on broker server via connector and Nutshell paying it FIAT price when time will come. So we are going to be mediator between end customer and broker.
Our team still discuss details of this implementation and we will come back with details later. But today we showed how we basically see this process.