Interview with CEO of Tokens.net Damian Merlak
Exclusive interview with Damian Merlak about future projects by Tokens.net was conducted on June 5, 2019 in Slovenian language.
Jure Pirc (later JP): Undoubtedly, Tokens.net is one of the safest and most reliable platform. Currently, it has had zero downtime and no security breaches. So, how is it possible that, when compared to other exchanges, you have not yet announced any maintenance works or downtime? Also, you are still adding new coins and tokens and extra functionalities?
Damian Merlak (later DM): We have thought carefully throughout our technical design solely at the initial stages. So, while I’m here I want to give a huge credit to our team, for making our platform how it is today. We have implemented a way to innovate and develop without systems downtime. The entire architecture of the system is built that despite interventions as adding new currencies or adding new solutions do not obstruct the current operations and already established functionalities of the platform.
JP: In Tokens.net white paper you intended to reserve 20% of the accumulated capital for marketing, but we have not seen many advertising efforts from you yet. Are you preparing any marketing campaigns in the future?
DM: We are aware that there are opinions regarding that we do not put as much money into marketing as we planned. But truth to be told, we are using our funds for marketing and advertising thoughtfully. If we are not showing up on Times Square digital billboards that don't represent our marketing efforts. Our approach is based on technological solutions. Every day we are developing innovative advances for how to target specific groups and promote our platform within crypto community. However, for the time being we are not burning funds for big campaigns on Google, Facebook and analogous campaigns, which nowadays just don ?t perform and justify the cost. Our supporters trust my judgment and I feel a great responsibility towards them. So, we will not under no circumstances irrationally allocate marketing budget. I am here to make the best return on investment for them.
JP: Since we are discussing marketing. Your Twitter and Instagram account have rather occasional posts regarding platform Tokens.net, while other industry-leading exchange CEO’s are very vocal. We could say they are shilling their projects, platforms and collaborating coins. Could you tell us why you are more discrete? You do have many followers and you could influence them. Are you worried that a tweet about coin/token could pose a future legal risk for you as an exchange founder in case of a scammy project?
DM: Legal consequences probably not. It’s simply because I do not use my twitter account as often as others do.
JP: If you had no hesitation, and you could buy many coins or tokens, has anyone already surprised you with alternative coin offering? If so, could you tell us which coin/token was it?
DM: Jure, you know very well you have sent me LanaCoins (laughing).
JP: After leaving Bitstamp you onboarded many new projects, without doubt, teams you work with comprise of capable people. Are you involved in daily operations within Tokens.net platform and is there any specific task with which you are personally responsible? Do you still program? Evidently, programming is a skill that never leaves a programmer, but do you think about stopping one day?
DM: I do not trouble myself with daily operations. I have a competent team that I trust, and they have not disappointed me yet. I am the founder, so I am involved at the concept level of the project. Lately, I rarely program. Most of my programming is concentrated around adjusting and maintaining trading systems I have developed for traditional financial markets.
JP: On 27.05.2019 you executed the “digital” burn of 30% of all created Dynamic Trading Rights (DTR) tokens, which were in white paper reserved for daily expenses. In your announcement concerning the burning, you stated that the exchange has just passed a successful year and that future funds are secured. Can you tell us more?
DM: Most certainly. In the spirit of transparency, I find it logical that the total emission of DTR tokens represents circulating supply as real as possible. My goal is to reduce the quantity of DTR tokens to the exact number as there are people holding them and no more. With this burning, we have not finished our mission yet. Likewise, as I have said the funds for future development have been secured, from ICO and from other private investments in the company.
JP: Tokens.net American supporters cannot wait for the day when Tokens.net will be available for them. Could you explain why or at least list few reasons, as to why for the time being Tokens.net is not available for American customers? Is the primary reason unclear or partially due to a clear regulation or is it something else?
DM: Being present in the United States market is on our daily agenda. Unfortunately, for now, the path to do this it is too lengthy to talk about in any tangible timeline. The United States of America is definitely a huge market, but sadly, the barriers are just as huge.
JP: Up until today, through the system of voting DTRVoice, Tokens.net platform have successfully voted and placed for the trading of 12 alternative coins and tokens. Some are Slovene and some are relatively unknown, they are even called “shitcoins”. What are the criteria for cryptocurrencies to get listed? Do you have the last word for what gets listed or is that your team’s decision?
DM:Coin/token placement on the voting list is full responsibility of the team. So, I am not directly involved. When adding new cryptocurrencies we follow internal standards, which are in my opinion loose enough that many coins/tokens are eligible for voting and consequently trading on our platform. We mostly focus on detecting frauds to which we have no mercy.
JP: Now that Tokens.net platform is fully operative, DTR tokens primarily function is transparent trading volume, something we have not yet observed in the industry. Many reports about exchanges trading volumes are implicating that most of the trading volume is made artificially for fake liquidity. At Tokens.net the number of cryptographically burned DTR tokens represent platforms trading volume. Is there any other exchange that does anything similar? Or have you marked a milestone in the industry of online cryptocurrency exchanges?
DM: Tokens.net is the first exchange that does so. Fake trading in the world of exchanges is nothing new. Personally, I know how much Slovene ICO have been paying (maybe still) for exchanges to generate fake traffic with their coins. I have often asked myself how such a project will deliver on their promise if they cannot even program a simple bot to generate fake volume. I assume they used the ICO funds and do not really worry.
JP: on LinkedIn we have noticed some changes in management. Can you disclose more information about it?
DM: In my businesses and Tokens.net is no exception, I typically chose to work with the best in the field. Sometimes some just do not fit as well as others do. It is not the first time nor will it be the last.
JP: Currently, how big is the Tokens.net team? Tokens platform subpage »jobs« have many permanent openings. Are you looking for some specific professional profile?
DM: We are constantly looking and searching for good programmers which are hard to find.
JP: A few days ago your page got translated into German. Does this mean that you have a German support center or is it just a translation of the interface? What about the Slovene market, how come you have not yet added Slovene translation?
DM: That’s correct, translating our page to German is one of previously mentioned marketing actions and for now, support is staying exclusively in the English language.
JP: Will your new projects implement cryptocurrency payments? Including DTR token?
DM: I doubt it. Personally, I do not see cryptocurrencies as a payment method and have not noticed a demand. Offering something that people do not search for makes little sense in this case. The majority of customers will probably come through other established platforms, which have integrated the current and most used payment methods.
JP: The community is asking if your Quantum Project is now already finished. Is merge fully completed? Or is there any individual who has not yet exchange QAU into DTR token to the terms of merger accordingly? Is project Photon still active or has it been dropped after the merger?
DM: The merger has been completed and address for exchange is not active. In accordance with terms, an exchange of QAU to DTR has been terminated. There are still some QAU circulating, but I assume these are cases of lost private keys. Technology developed within Quantum and Photon project is being implemented in Tokens.net platform. Some of their products will be seen in the near future.
JP: Are there any special characteristics of Tokens.net you wish to put forward? Which feature is your favorite?
DM: I believe the whole concept of DTR (Dynamic Trading Rights) token is one of a kind, and I am proud of it. Besides the main idea, I have to put forward a Tokens.net cryptocurrency voting system. As it is very distinctive and democratizes the way how coins or tokens are listed to our platform.
JP: In an interview with Slovenian media you revealed that you do not invest in projects in which you do not see yourself. I am assuming that lately your inbox has been filled with bountiful proposals, and many people are searching for your contact information. Have you read all of the inquires or found any dazzling projects? Have you ever invested in a project without a guaranteed return on investment?
DM: I am fully focused, for now on the current projects and do not have anything new in my mind, but of course I am curious for a great investment opportunity.
JP: Can you leak some special detail for our readers and supporters?
DM: One of our biggest news will be margin trading. We would like to achieve this in a slightly different way than the other providers. I have imagined a solution that is more comprehensive and safe for an average user. The same goes for shorting.