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Bitcoin Futures

DueDex Review: Complete Exchange Overview

DueDex is a new Bitcoin futures exchange that has opened their books to traders looking for another avenue to trade with leverage.

This exchange offers leverage of up to 100x on Bitcoin. This is combined with their relatively unique platform and lightning fast matching engine. It is not short of competition though given the range of other exchanges.

So, can such a new exchange be trusted?

In this DueDex review I will attempt to answer just that. I will give you everything you need to know about the exchange as well as some top tips when you start trading there.

Overview

DueDex is the trading name of CKG Global Trading Limited which is a company based in Belize. The company has registration number 172257.

It was founded by Bo Wang who is a Chinese blockchain entrepreneur. For those of you who don’t know, Bo was a co-founder of Factom – an enterprise blockchain solution.

Similar to exchanges like ByBit and PrimeXBT, DueDex is a Bitcoin futures exchange. This means that you will be trading derivative instruments on the price of Bitcoin. This means that you can leverage your positions up to 100x.

DueDex also works with a number of top tier liquidity providers. This means that you have deep liquidity for all of your orders. They also boast a matching engine that can process over 100k TPS.

It is also a no-KYC exchange that does not require personal information to create an account. This is unlike the likes of Coinbase et al that need full KYC from their traders.

DueDex takes traders from all around the world although there are some regions where they restrict users. These include the likes of the United States, Hong Kong etc. You can see the full list here.

Is DueDex Safe?

This is perhaps one of the most important questions that any trader can ask of an exchange (especially new ones). So, how does DueDex really stack up?

Well, there are a number of areas that we will look into when trying to determine whether to use an exchange. These include things like user security, exchange security, coin storage and trading risk management.

Let’s take a look into each of these shall we?

Coin Security

When it comes to coin storage, DueDex uses a cold storage procedure. This means that coins are stored in an offline environment that keeps them safe from hackers and disconnected from the internet.

DueDex Policies on Coin Security

These coins are stored in Multi-sig wallets. This means that in order to move the funds, there are a number of individuals at DueDex that are required to approve this and sign the transaction.

When it comes to hot storage, these multisig wallets are only drawn upon three times a day. DueDex processes withdrawals in batches manually and through a multi-layered procedure.

Note ✍️: Given that withdrawals are done manually, you will have to wait for a withdrawal time for yours to be processed. While this may be frustrating, it is a safer way to manage coins.

Server Security

The DueDex trading infrastructure is hosted on Microsoft Azure’s architecture. This is one of the most robust cloud computing infrastructures around. It will ensure continued up-time of their trading books.

Moreover, Microsoft Azure is one of the most secure cloud hosting services around. This means that not only is your data safe but it also means that they can stave off any issues related to DDoS attacks etc.

Communication Security

It comes as no surprise that the DueDex website is fully SSL encrypted. This means that all communications between you and the exchange are encrypted and hidden from the threat of hackers.

DueDex SSL Certificate
DueDex SSL Certificate

On this point, you should always make sure that you can see the secure padlock in your browser. If you happen to land on a page that does not have this it could be a phishing page and you should leave immediately.

User Security

Of course, security often starts at the user. Most hacks occur because users accidentally give over control of their accounts through passwords or API keys. However, DueDex has some procedures to protect against this.

One of these is that they provide two factor authentication. This means that in order to log into your account you will have to confirm the login with your phone as well.

DueDex Two Factor Authentication
DueDex Two Factor Authentication Options
Authenticator 📲️: For the authenticator option above you will need to download the Google Authenticator. You can download this from the Google Play Store.

We encourage you to set this up the moment that you create an account. With two factor authentication, even if a hacker has access to your password, they can’t login without your phone.

Risk Management

Given that DueDex is a futures exchange that offers 100x leverage, you do have considerable market risk. This is especially true for an asset that is as volatile as Bitcoin.

DueDex has a number of measures in place to take out those traders that fall below their maintenance margin. This is termed a liquidation and DueDex has to do this before the maintenance margin is exhausted (explained below).

If there is ever a situation in which this cannot be done, the loss on the liquidation has to be recouped. DueDex has set up an insurance fund to cover this and prevent any “socialised losses” among the traders.

You can read more about the DueDex insurance fund here. However, DueDex has a system in place to even prevent using the insurance fund. This is called auto-deleveraging and I will cover it below.

DueDex Leverage

As mentioned, DueDex is a futures exchange. This means that when you enter a trade on DueDex you are entering a position in a futures contract.

For those who do not know, a Futures contract is an agreement to buy or sell some financial instrument in the future (expiry date). This means that you can take a long or a short position with a futures.

However, it is important to note that the futures contracts at DueDex do not have an expiry time. They are perpetual futures which means that your mark price is the spot price and not a future price.

Leveraged Trading Duedex
The power of leverage Trading. Returns / Losses Magnified

Now, futures products mean that you can trade margin trade crypto (or with leverage). This means that you can take out positions that are many multiples the size of your funds.

For example, if you are trading with leverage of 100x, this means that you only need to put down an initial margin that is 1% of your total order size. Hence, even if the price of Bitcoin (BTC) only moves a little, your gains / losses are magnified.

Warning ⚠️: You can adjust your leverage and we would advise you to start with lower leverage limits. 50x leverage can be just as profitable when done properly.

Although the initial margin is the amount that you will have to hold in your account in order to open a position, you are also required to post a maintenance margin. At DueDex this is set at 0.5%.

So, for example, if you have taken a position of 10BTC, you are required to post 0.15BTC. 0.1BTC of this is the initial margin which will be held by the exchange. 0.05BTC is kept as maintenance margin.

Liquidation

This is a well-known term in futures trading. It is what happens when your equity falls below the required maintanence margin level. DueDex will immediately close your position.

If the price that they have managed to liquidate your position is greater than the “Bankruptcy price” then your initial margin will be taken and sent to the insurance fund we talked about above.

Liquidating positions DueDex
Process of Liquidating Positions on DueDex

If, however, DueDex is unable to liquidate your position above the bankruptcy price then the Auto Deleveraging mechanism will kick in. I won’t go into the full mechanics here but basically this is a method to de-risk all of the trading books.

If there is a losing trader that could not be liquidated above the bankruptcy price then the opposing traders with either the most leverage or the best PnL will be liquidated. You can read more about how the ADL works here.

DueDex Fees

Something that can really eat into your profitability is the fees that are charged by an exchange. Hence, it is one of the most important considerations for us.

So, what do they look like on DueDex?

Well, for trading fees, DueDex operates a maker-taker fee model. This means that those traders that are providing (making) liquidity on the exchange will get a rebate while those that are taking will be charged a fee.

Maker / Taker ❓: If you are confused with these terms then all you need to know is that takers are usually market orders whereas makers place limit orders.

Currently, you will be charged  0.075% as a taker and you will get a rebate of 0.025% if you are a maker. This is exactly in line with the fees that you have at other exchanges such as ByBit et al.

DueDex Trading Fees
Simple Fee Structure at DueDex

In terms of other fees, you will also be charged a “funding rate”. However, this is not a fee that goes to DueDex. It is a financing fee that you can think of as an interest rate on borrowed positions.

This is a rate that is paid to the open market and is dependent on the interest rate differential between USD funding and BTC funding. Given that this is a market rate it is not fixed and could either be positive / negative dependent on the conditions.

Finally, there are no fees to deposit funds although you may have to pay a small miner fee on withdrawals. This is done in order to cover the transaction fees that DueDex will have to pay on your behalf.

DueDex Registration

Assuming that you are happy with DueDex and would like to give it a spin then you will need to register an account. So, you can navigate to the homepage and hit the “register” button.

Signup DueDex
Signing Up on DueDex via Mail & Phone

When signing up with DueDex you can use either an email or a phone number. The “Referral Code” is if someone else has referred you to the platform. The referral program is something that we will cover below.

Once you have completed your signup you will be sent a verification link. Once you have confirmed the email then you can log back into your account. It is at this stage that we would encourage you to setup your two factor authentication on your mobile.

Something else that you may have noticed is that DueDex does not require any form of KYC. This means that you do not have send any documents or wait for their team to approve your application. This is of course great for those of you who love privacy.

Deposits / Withdrawals

Now that you have your account registered you will need to fund a live account to start trading. Head on over to the “deposit” section in your account administration area.

Here you will be presented with a Bitcoin address as well as a QR code. This is the wallet address that you will need to use in order to fund your account. Once you have sent the funds you can monitor the transaction on a Bitcoin block explorer.

Top Tip 💯: Take note of the deposit bonuses that DueDex has on offer. These could be great ways to augment your trading although we encourage you to read the T&Cs

Withdrawals are just as easy. You can hit the “Withdrawal” tab where you can submit a request. Here you can insert your offline address. As mentioned above, you should take note that withdrawals are only processed manually three times a day.

Withdrawals are processed at 0:00, 8:00, 16:00 (UTC). You should also note that withdrawal requests can be made anytime up to 30 minutes before the time. So if you make a request after this you will have to wait till the next withdrawal time.

DueDex Trading Platform

Time to go into the belly of the beast and take a look at the much touted DueDex trading platform. So, if you are in your account you can hit “Trade” and you are taking to the interface.

Our first impression is that it is pretty well laid out and intuitive. The layout is pretty similar to some of the other leveraged trading platforms that we have reviewed.

Right in the middle of the platform you have your price charts. You will notice that this chart looks pretty similar and that is because it is tradingview software. Tradingview charts are some of the most functional in the industry.

DueDex Platform
Trading Interface of the DueDex Platform

These charts are a crypto technical analysts dream as they allow for some pretty advanced analysis. You have trends, indicators, studies as well as the opportunity to save your chart template for later.

If you wanted to observe DueDex’s market depth then you can toggle to that on the chart module. The market depth allows you to get a better sense of the liquidity on the books at the time.

Top Tip 💯: You can also expand the chart to make it a full screen. This could make it easier to map the trends.

Just below these charts you have your orders both past and present. You also have your open positions and a live running PnL. Finally, you have the functionality to cancel all orders on the top right of these orders.

Then to the right of the chart you have the latest trades as well as the live order book. You can also adjust how the order book is presented and elect to look at only the buy orders or sell orders.

Finally, next to the most recent trades, you have your own order books. Here you can place your orders and you have a range of order placement options at your disposal. Let’s take a look at some of these shall we?

Order Placement

The first thing that you will notice when looking at your order forms is that you can select to make three different types of orders. These are the following:

  • Limit Order: A limit order is one that is placed away from the market at a predetermined price. Once the market reaches this level your order will be executed according to the parameters that you initially defined (reduce only & post orders).
  • Market: This is an order that will be executed at the market price. This is also usually executed as a taker order so you will be paying the taker fee
  • Stop Market: This is a Stop order that will execute at the market rate when a predetermined level is hit. This level is your stop level and can be used to either take a profit or stop a loss.
  • Stop Limit: This is also a stop loss but instead of executing at the market rate when hit, it will be placed as a limit order at a price that is predetermined at the outset.

You will also have noticed that for each of the order types you can set your leverage amount. As mentioned before, you should perhaps start with lower leverage limits as trading at 100x is too risky.

DueDex Order Types
Some of the Order Types at DueDex

You should also note that when you are placing a limit order you can select how long you would like the order to remain in force. You have the options for “Good till Cancelled”, “Immediate or Cancel” or “Fill or Kill”. You can read more about this time in force parameters in the DueDex docs.

When it comes to matching your orders, DueDex has a pretty effective matching engine. This is able to process around 100k transactions per second with a latency of just 10 milliseconds – great for the best execution.

Testnet

Something else that you may want to avail yourself of at DueDex is their Testnet. You can think of this as a demo platform that is available on testnet.duedex.com.

Basically, this Testnet replicates all of the trading conditions that you have on the actual exchange. The only difference is that you are trading with test coins that cannot be withdrawn.

Test Coins 💰: Before you can trade on the testnet, you will need to get test coins from a faucett. You can read more about that here

This could be a great way for you to test out your trading strategy and get used to the DueDex trading platform before you deposit any coins. You will also be using the testnet to try out their API (more on this below).

DueDex Customer Support

Something else that we place a great deal of emphasis on is customer support. There is nothing more frustrating than having to wait hours for a ticket to be attended to by support staff.

So, how does DueDex stack up?

Well, they were pretty effective. The best way to get hold of them is through their simple contact form on their website. They have support agents available 24/7 and we got a response within 2 hours.

DueDex Customer Support
Places to reach the DueDex Customer Support Teams

Of course, there are also more traditional ways to reach out to them including on their support email (support@duedex.com). Unfortunately though, there is no phone of live chat available.

Pro Tip 💯: If you want to expedite your ticket then you can reach out to them on their social media accounts. You can hit them up on Twitter or their Telegram.

Of course, there may not even be a need for you to reach out to the customer support in the first place. That is because they do have a pretty extensive Help Center with many of the most regular questions answered.

DueDex API

Any programmers out there? You will be happy to know that DueDex has a pretty robust API where you can code your own trading algorithms. You can read more about the API in the official repository.

If you wanted to start trading via API then you would need to get your API keys. This can also be done in your account section. Once there, you will first need to generate them.

DueDex API Key
Generating your DueDex API Key

You will need to give the API key a name as well as decide what permissions you would like the key to have (read, write, trade). Finally, you can also select to white label a singular IP address from where the exchange will accept commands – a wise move.

Of course, while we are on the topic of API keys, I should warn you about the risks of giving this API key to third parties. Anyone with trade permissions and your API key can execute trades. Trading bot services have maliciously used API keys in the past on exchanges like Binance.

Referral Program

If you have had a pleasant experience at DueDex and want to refer others then you will be happy to know that DueDex has a pretty attractive referral / affiliate program in place.

They give you the opportunity to earn up to 30% on the lifetime commission of your direct referrals. That means that for every trader that signs up with your referral link you will earn 30% off their trading fees.

Note 📝: Of course, you should read the T&Cs that come with this affiliate program to make sure that you are referring users in a compliant manner.

There is also an additional level of affiliate commission available at DueDex. If your referrals refer somebody and they start trading then you will get a further 10% of the trading fees that they generate over their lifetime on the platform.

DueDex Earning
Earning Potential with DueDex Affiliate

Something else that we really liked about the DueDex affiliate program is that there is daily settlement. It means that you are entitled to withdraw your cash the day after the commissions are earned – quite refreshing.

Areas For Improvement

While there was a lot that we really liked about DueDex, there is still quite a bit of room for improvement.

The first and most obvious thing that the exchange only allows you to trade Bitcoin futures. This is quite limiting and nearly all of the competing exchanges offer futures on other assets.

Then there is also no mobile app available. This means that if you want to trade while you are away from your PC you will need to use a mobile browser – far from ideal.

Similarly, while the trading platform is quite functional, it appears to have most of the same features as the already existing trading platforms. If DueDex really wants to compete it will have to develop some platform USPs.

Finally, the online reputation of DueDex is still limited as it it such a new exchange. Of course, this is something that all new exchanges face and as long as they provide the same service we encountered; the reputation will be enforced over time.

Conclusion

In summary then, we found DueDex to be a pretty impressive exchange. Adequate leverage, strong coin security and lightning fast execution that can process orders in milliseconds.

We also liked the fact that they have an attractive referral program with a highly responsive customer service team. Similarly, their trading fees are quite attractive and there is adequate incentives for market makers.

Moreover, from a risk management perspective, DueDex appears to have crossed their T’s and dotted their I’s. They have the auto deleveraging system to reduce the risk of losses and failing that – there is always that insurance fund.

Yes, there is some room for improvement, but this is a brand-new exchange. They have plans to roll out many more features and functionality as they grow. Indeed, one would hope that constructive reviews like ours will be taken into account as they look to improve it.

So, is DueDex the exchange for you?

Well, if you are looking for a well managed secure and functional Bitcoin futures exchange, then they are worth considering.

Warning ⚡️: Trading Bitcoin Futures is very risky and you could lose your entire investment. Make sure that you practice adequate risk management

Featured Image via DueDex

The post DueDex Review: Complete Exchange Overview appeared first on Coin Bureau.

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