Lisk For Investors #6 – What Is The Proxy Market For

Tai Zen: What’s up, this is Tai Zen. We got my buddy Jeff on the line also on this conference call. We also have the amazing and phenomenal, the Warren Buffett of Cryptocurrency investing, the Oracle of Austin, Texas, so is going to give us the latest update on the Lisk ICO.

Leon Fu: I think we’re going to see a pattern because of the same thing happening for all these ICO. There is this exchange called I’ve never even heard of these before.

Tai Zen: Yobit is spelled “Yo” as in “Yoyo”, and then bit as in Bitcoin, so it’s Several people said we didn’t leave the link to Leon Fu is his real name, I just call because he’s so nerdy. So you have a website, right?

Leon Fu: Yeah I did, but it hasn’t been updated. It’s a site that I was trying to play with iWeb, they don’t even support that anymore, that hasn’t been updated. You can follow me on Twitter.

But anyway, back to the Lisk here, this is exchange. There’s dozens if not hundreds of exchanges out there. This one exchanged called which I’ve never even heard of these.

They actually are if you go to Coinmarketcap, one of our favorite sites to keep up. They do have a list of all the exchanges if you go to Coinmarketcap and then at the top they’re listing 660 currants, 663 different currencies, 55 assets, and 1827 markets. So Coinmarketcap actually keeps track of over almost 2000 exchanges.

This thing called, who I don’t think anyone has ever heard of because I think before today, they traded something like 50 Bitcoins a day. They decided or they claimed to have said that they’ve bought a bunch of Lisk during the ICO and they’re going to trade a proxy, a token or an IOU that represents the amount of Lisk tokens that they had bought during the ICO.

Now we all know that like Lisk just posts a blog today saying that they actually delaying the release from the middle of April to the end of April, possibly into May. But I guess this exchange Yobit, they’ve just decided to say we’re going to create this coin that we just made up and when the real Lisk launch, you’re going to be able to exchange these tokens, these coins that we created with real Lisk, the real Lisk that we have bought during the ICO.

Tai Zen: I actually created a separate video today, like a 10, 12-minute video today while I was in Manhattan in New York that explains what’s a proxy token or a proxy Cryptocurrency coin. So if you listen to this, and you don’t know what a proxy token is or a proxy coin or a proxy Cryptocurrency is or IOU is, sometimes they’re calling it an IOU coin, make sure you check out our other videos and I’ll try to get upload as quick as I can.

Leon Fu: If you go to the Coinmarketcap, you can see that before this listing, I don’t think anyone has ever heard of them like in the last 24 hours I’m looking at Coinmarketcap and they only traded about $92,000 worth of Ethers, which is just nothing, that’s maybe 50 Bitcoins. So before Lisk created this proxy coin that they did or an IOU coin, they only traded 92,000 Ethers in the last 24 hours, $93,000 worth of Bitcoin versus Ethers. So that’s about only like 90 Bitcoins.

Tai Zen: That’s about 8,454 Bitcoins.

Leon Fu: So by listing this proxy coin for Lisk, their volumes are more than double. We all know what how exchanges make money, they take 0.2% from the buyer and the seller generally.

So by tapping into this demand for Lisks, of people wanting to trade Lisks, they’ve just pretty much doubled their income, by creating this proxy. This isn’t anything unusual, we saw this with Ethereum. Remember the crowd sale for Ethers happened in July of 2014 and we didn’t get the actually Ethereum network to launch until last summer, it was over a year before we had real Ethers to trade.

But within like a month or two, I don’t know if you remember proxy, it was a proxy. So if that proxy coin was a bunch of just made a copycat coin, pre-mine coin, and they claimed that they had bought a million Ethers during the presale for the ICO, and then they were going to create a million of these proxy coins.

They could then list those coins on the exchange and they said they would give their worth that those coins would be exchangeable for real Ethers, one to one when the real Ethereum launched. They could do that of course because they did buy a million of the real things.

Tai Zen: My understanding was I thought that they got the real Ethers from individuals that loaned it to them.

Leon Fu: No, they actually went and bought a million Ethers during the presale. Once they did that, they issued a million Ether coins against that, and then actually started to sell it because they cashed out, they made out like a bandit because they had bought it at 30 cents.

In fact, maybe we should do that, now that I think about it, there’s nothing to stop us from doing that or anybody really. They actually did that, they bought them at 30 cents, and it immediately opened that $2. So they could just start selling those coins at $2 for the coins that they had gotten that at 30 cents, that’s instant profit right there.

Tai Zen: So if you take $2 and divided it by 30 cents, that’s a 666% profit in a month.

Leon Fu: And maybe, in two months. Let’s say they had bought it, the presale, they waited until the presale ended so you couldn’t buy anymore. Then like a month later, they sold those coins.

It started being traded on some of those exchanges, picked up on those coins because people wanted to buy Ethereum like months or year, even a year before it actually launched. That happened with Ethereum, that also then happens to Augur. I don’t think it happened on the same scale as Ether coin but Auger, now there’s a Hong Kong exchange known as Gatecoin which is another exchange we know like I said, Coinmarketcap says there’s almost 2,000 exchanges, 1827 markets that they follow.

So they have something called Augur, they have a proxy for Auger which I don’t know if they got people to give them their private keys or maybe they participated in the ICO themselves. Keep in mind that you have to trust these, with this Ether coin we didn’t really know who those were, I don’t know who those were.

But after Ethereum launched, people started redeeming their Ether coins for real Ethers. It does seem like everybody did get their Ethers, it wasn’t a scam. They took back all their Ether coins and then gave you the real thing, the Ethers that they had bought in the presale on the ICO.

Yobit just explodes onto the scene today, I don’t know who these are but they say that they did participate in the ICO and they’re going to issue a proxy for it. That’s been redeemable when the actual Lisks coins are issued on network launches.

So Augur did the same thing, Yobit did the same thing, it seems Yobit did the same for Lisk. I anticipate all the big ICOs that we see going forward, people are going to do that because it looks like free money.

Tai Zen: If you have a chance or any one of us has a chance, we ought to go and create an account at and actually just maybe spend a few Satoshis and make a transaction just so that we see if they actually go through. I’m talking about like we do it once just so in the future whenever we tell people about it, we can at least say that we’ve done it just to verify.

Leon Fu: Sure, of course, we could definitely open it, but it doesn’t tell you if that’s a scam or not because we won’t know until let’s say you buy 10 Links which would cost you a few hundred, or a few thousand Satoshis, that’s not a big deal.

Tai Zen: I’m in the busy of the middle of tax season right now and I got to do my taxes. But if I get a chance, I’ll get something or you get some and then we’ll just see if we get a few proxy Lisk coins to see if they’ll actually give us a real one whenever the real ones to come out.

Leon Fu: The proxy coins like Ether coins, for example, we did trade between $1 and $2 and $3 somewhere on there before the real Ether service launched and that actually was a pretty accurate representation where Ethers opened.

Tai Zen: So would you say that the price of the proxy coins for that specific Cryptocurrency is a fairly good crystal ball or leading indicator to let us know what the future price?

Leon Fu: In hindsight, it was for Ether coin. We don’t know, like Auger, let’s take the Augur for an instant. That’s the same thing happen to Augur. It is trading, that proxy is trading, not the real Augur coins.

But we’ll also get to see when Augur does launch like the proxy coins, like Auger ICO that 50 cents, and right now the proxy coins on Gatecoin are trading between $9 and $10. So that’s a 20X return right there. It seems like Lisk coin, I think Lisk will probably launch before other even though Augur had their presale earlier, last October.

But we’re expecting the Lisk to launch by the end of April or early May and it will be really interesting to seeing what this thing opens at. I think all of us who participated in the ICO, we got in at around 7 cents plus or minus, all the bonuses that we got. Right now on Yobit, their proxy is trading over $2, I saw it go as high as almost $4, I think right now it’s looking like it’s almost $3 right now.

That’s going to be almost 30X return if the proxy holds up to the real thing. Now keep in mind that we won’t know what the real Lisk coins would be trading up because the proxy coins don’t have to supply the entire Lisk.

Just like the Ether coins, there were only 1 million Ether coins and there really 75 million Ethers that were outstanding. When you trade these proxy coins the supply doesn’t match the real supply that’s out there.

Tai Zen: Therefore, it can easily go up, the price can easily fluctuate and that can be very volatile, can run up or down very quickly. By the way where do you see the US dollar? Because all I see is the mil a bit.

Leon Fu: Go to, and then they will list all currencies, all the trading pairs that they make the market in, sorted by the highest volume. I’m looking at it right now and I see of course Lisk is number one at $2 and 96 cents with 242,000 traded in the last 24 hours, which is double Ethereum at 93,000. That’s on the Yobit exchange.

Tai Zen: On Yobit, as you said, the Lisk is trading at 240,000, that’s a lot of volumes. Since that’s a more of a technical side, let me just cover that real quick so that the audience, the listeners understand how important that is. Here’s one of the fundamental factors that and I look at, is that we look at the daily trading volume of the Cryptocurrencies.

In our investment method, one of the key indicators that we look at is how much volume is being traded for that Cryptocurrency and usually we try to stay within the top 10 or the top 12 most actively traded by volume because we don’t want to jump into a Cryptocurrency that does not have a lot of volumes. Because then you get a lot of slippage and your fills are not clean and you yourself can move the price of that Cryptocurrency in a bad way if there’s not enough volume being traded.

So the top number one most volume traded Cryptocurrency obviously is the granddaddy of them all which is Bitcoin and they trade at this moment to give you an idea, it’s trading at $51 million in the last 24 hours. And the second biggest one is Ethereum which trades at $15 million and at the peak just a few weeks ago, it was up to like over $30 million traded.

I don’t know what this Ripple is, I really don’t even see that as being a real Cryptocurrency because that’s a centralized Cryptocurrency. I wish they would not put that there because I don’t put it in the same category as all the other Cryptocurrencies, it’s just a token from a company. So just ignore Ripple, the third one is actually Litecoin which is $500,000 and then Monero is at $259,000, and in Factom, which is the fifth most popularly traded is that $225,000.

And then to give you an idea, all of a sudden if you jump over to and they are trading $242,000, basically almost a quarter-million dollars. That just puts Lisk at number 6 on the most on the list, if you sort it by volume in the last 24 hours, the most actively traded Cryptocurrency for today. If you just took the Lisk proxy coins from Yobit and you added to the regular list of traded volume, that’s quite a bit.

Something that I forgot to mention in the other video that I need to go back and add a piece to it, is that when I was explaining what the proxy tokens and the proxy coins were, I forgot to mention that the reason why the exchanges want to, they’re rushing to go out there and put their proxy coins first is to bring business to their exchange because once they get the majority of the trades at their exchange, then it’s just pretty much free money for them.

I think what you were saying was like if we look at the amount of the Ethereum that’s being traded at Poloniex, just today alone, Poloniex is traded $6.6 million worth of Ethers at Poloniex. You multiply that by the transaction cost at Poloniex, it’s like 0.001 or something like that. I’m looking at right now it’s 0.01 Ether, it’s a buy and sells transaction, then it’s going to be 0.02.

Leon Fu: I’m thinking they’re getting around $25,000-$30,000 a day in fees.

Tai Zen: This is the reason why the exchanges, because they’re making $27,000 a day or more, this is the reason why the exchanges are fighting to be the first exchange to put out a proxy token or a proxy coin for that particular ICO, and that way they draw business to their exchange. I don’t feel very comfortable about simply because I’ve never heard of them before.

Until you brought it to my attention, I never even knew it existed. The thing is this, we know Poloniex, we know Kraken, we even know the extinct exchange like Mountain Ox, the exchanges like BitInstant, all the big ones. We actually know what they are, BTC China, those are popular, I never heard of Yobit.

Leon Fu: There’s a drop-down called phrase volume cricket and there are 2 options. One is by currency and one by the exchange. Now this one shows you a list of exchanges with the most volume in terms of dollars, everything’s converted to US dollars.

Of course, number one is Poloniex. You can see Ethereum is almost 80% of their volume, 78%. And everything else doesn’t really matter, it’s all Ethereum.

But if you can put down this list and you can see Gatecoin which I had mentioned about Augur, where Auger is treated, or not Augur but the proxy Augur. That’s on Gatecoin which is a Hong Kong-based exchange, it does over 8 million a day but they don’t serve people in America because of regulatory issues. If you live in America, they don’t want an account from you, you can’t open an account there.

Then going a little further down the list is Kraken, that’s making a market in Bitcoin and Ethereum to a bunch of different Fiats. BitFlyer which I guess is a Japanese exchange, they’re doing Bitcoins in Japanese Yen with 3.8 million. Then BitFenix which I think is another Hong Kong exchange, they mainly do Bitcoin and a little bit of Ethereum.

Then there’s it fit BTC Fox, BTCE and Coinbaseexchange, the one we use, that’s at number 10, they do about $2 million a day. Basically everything after the top 10, I don’t think most of us have not heard of most of these because they do a million dollars or less per day.

Tai Zen: If you think about it, it’s still not bad even if you’re doing a million dollars a day and you’re collecting 1%.

Leon Fu: They’re talking about 0.4%, that seems to be the fee. It costs a lot of money to run an exchange, it’s not easy. You got customer support issues, you got security issues, every exchange has been hacked, you’re holding your customer’s money, you have the government might be coming after you too, hackers are coming after you because you have all this money sitting on your exchange.

So it’s not possible unless you are really big like Poloniex or Coinbase or one of these the BTC-e, they’re doing $10 million, at least $5 million or more per day. The takeaway is that we’re going to see a lot of more of these ICO coming up. For things that are popular like Lisk, Augur and probably it’s going to be huge.

But they’re not going to launch for months or even a year, somebody’s going to set up a proxy coin or an IOU coin so the exchanges can start trading it. And some of them ought to be scammed. I bet we’re going to have a few of these that just turn out to be scammed. That’s always a risk.

Tai Zen: So I want to wrap up this call just so that our listeners know that if they got into Lisk, they can go and monitor the current price of the potential. I should say the potential price because it’s the price of a proxy.

Leon Fu: But it gives us a good indication of what somebody is willing to pay for Lisk points because they are buying a proxy, they’re expecting to get the real thing eventually. But it’s not entirely accurate because the supply is not accurate.

Tai Zen: Because right now, there’s like 2 mil a bit spread on the buy and the sell side, which is huge. In case you’re listening, you don’t understand how big of an issue that is, if you think of the 2 mils a bit spread and you take the 2 mils a bit and divide it by the 5 mils a bit price, that’s going on.

We’re talking about a 40% spread. That means that would be the equivalent of somebody buying or selling $100 stock and the people that want to sell it want to sell for $100 and the people that want to buy it for $60. So there’s a $40 difference between the buyers and the sellers, that is extremely widespread.

I just want to give the listeners an idea so they have a frame of reference. Let’s wrap up this a conference call to update the listeners on this.

Jeff: Thanks for allowing me to be the first to listen to on that, really fascinating.

Tai Zen: Any last words,

Leon Fu: No. That’s enough. So keep an eye on this.

Tai Zen: This is something that Jeff and I were discussing and we want to get your input on it. Maybe the listeners can let us know too and give us their input also. Jeff and I were thinking maybe how they do the money show for the traditional trading and investing for the stock market, teaches market, the options market and stuff.

We ought to have a Cryptocurrency investing summit or something where we just tell all the listeners just to meet up and maybe we just share some ideas or something in Dallas or something, so it’s centralized and then everybody can meet us up there. We can rent a hotel conference room.

It’s not just a weekly meet up, we’ll make it so it’s more worthwhile than just a regular meet up. Maybe we’ll have some speakers and we’ll have some people come here and set it up. Thanks, everyone for listening on this call, if you like these conference calls here with and me, give us a thumbs up.

Let us know and leave your questions, suggestions in the comment section. It’s late at night, it’s midnight here in New York City where I’m calling from.

Jeff is in Boston and then we got, the Oracle of Austin, Texas. Alright, we’ll catch you later.

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