Behind the EMX Testnet: Building Silicon Valley’s First Derivatives Exchange

Posted by EMX Team on Mar 4, 2019 8:34:53 PM


In Conversation with Co-Founder Craig Austin & VP of Product Kay Chang

Since unveiling the EMX Private Beta last November, our product-focused team has continued working diligently to refine and build our exchange. To mark the occasion of launching our public-facing EMX Testnet, we caught up with Co-Founder Craig Austin and VP of Product, Kay Chang, to discuss progress, product challenges, and future plans.

Craig Austin co-founded EMX in 2017. He had previously spent 7 years scaling and leading a team of 20 engineers at AQR, one of the world's top hedge funds. Prior to joining AQR, he was a software design engineer for Microsoft. He started EMX with the mission of bridging the worlds of cryptocurrency and traditional capital markets by creating one platform to manage a global portfolio. 

Kay Chang joined EMX in 2018 as the VP of Product, and brings with her a decade of experience working for some of Silicon Valley's top tech companies, including Clover and Apple. She immediately got to work at EMX helping to define the product vision and requirements and driving a methodical, focused approach to product planning.

KC: We’ve had a busy few months since releasing our private EMX beta. When speaking with folks from traditional exchanges, I often hear “We’ve never done a beta” while open betas are very common in Silicon Valley tech companies.  So, perhaps for our readers, we should start with what a Testnet is?

CA: It’s a huge milestone for the team and it's the first time we've put our working platform out into the world. The EMX Testnet is for everybody - not only friends and family or our private beta users.

What you can do with the EMX Testnet is “paper trade” (which means to trade without using real funds). We’re using the platform to host trading competitions, so it will be a real way for us to get feedback from real users and start getting the word out there about our exchange. We’d like feedback from the trading development community as well as not only can you use the testnet from web and mobile, but we also launched a full API


EMX API - access our GitHub here.

KC: We have extensive API documentation currently available, which is pretty exciting. I think that really raises a good point on how we are appealing to both individual and professional traders from a range of backgrounds. Professional institutions may use the API whereas individuals may discover us via desktop and mobile web. It's important for us as an exchange to reach a wide range of customers versus a single segment. 

CA: It’s important for us to have both sides as both retail and institutional clients are critical in building a successful two-sided market and that’s what we hope to kickstart through our EMX Testnet. We’re getting the word out there, listening to feedback, and putting some initial load on the platform to see how it performs.

KC: Even up to this point, I feel we have come a long way from our private beta over the last year. Let’s think back, for our readers who have been following us since the private EMX beta, on some of the exciting changes that took place since then.


The old watchlist interface


The new watchlist

CA: From a product, engineering, sales, and marketing team perspective, we've all been working with this product everyday for the past 9 months (after our team pivoted from building a decentralized exchange). One of the key UI changes over the last couple months is a better way to view and navigate between all the different contracts on the platform (our “watchlist”). Once we figured out about how many contracts we were going to list, we went back and revised how to display the selection to our users. We believe we’ve arrived at a better way to view the contracts available on the platform - but we’ll be looking for usage data and user feedback to support our hypothesis.

Another one of our key features is being able to trade from multiple parts of the platform - from the simple trade ticket that most users will be familiar with to our chart and order book widgets. We went through a couple iterations on how to actually surface this functionality and realized it was complicated because this is  kind of a professional feature, but since we think it'll be useful to everyone trading on the platform, we wanted to make it accessible to both novice and professional traders. We’ve struck a good balance between simplicity and complex functionality. Also, we’re comfortable shipping a feature that’s more of an “MVP” than a fully fleshed-out experience as we’re eager to get to launch and start iterating. The build-measure-learn loop really gets going at launch - but the EMX Testnet is a way for us to jumpstart the process.


Trade from the EMX Order Book

KC: User feedback will be critical to our prioritization process as we focus on building additional features and making revisions prior to launch. We really value feedback from customers and have collected it thus far from surveys, conversations with traders, and social media. We also have colleagues with professional experience designing and being very closely involved with operating trading platforms.

CA: That’s kind of how we got off the ground, by leveraging existing experience in building trading platforms and then we tailored the platform over time given feedback acquired internally and externally. This release is a major milestone in our process as it marks the first time anyone in the world - and not just a select few - can use EMX. Once we start to receive feedback and user data, prioritization will become paramount. There's pre-launch prioritization, which is what we are going through now and then there’s post-launch prioritization which will come with a different set of trade-offs - but right now it's about getting traction, users, and building awareness in the right communities.

KC: We have some screenshots to highlight how key features have evolved, including the chart, order book, and watchlist. As with any early stage tech startup building a new product, we’ve experienced a few product challenges. The level of engagement both internally and externally has been incredible and everyone had lots of different ideas regarding what the product should look like and different opinions on what features professional traders would value. There was a lot of focus necessary to define our initial MVP (“minimum viable product”) feature set.

CA: If you take the standard start-up advice, it’s to quickly build an MVP and start the build- measure-learn cycle. For a financial exchange, it’s more difficult to arrive at a viable minimum product than for a more traditional app. It was difficult for us to define what the “MVP” was for our exchange and clearing house APIs, for example. We arrived at something mangeable to build over a number of months, not years, especially with our small (3-5 person) engineering team. The second part of all this is optimizing our team’s process and procedures to get to an MVP as fast as we can with a level of quality that we are comfortable with - knowing that our software will be operating a financial market. These have been our challenges over the past few months and we continue to get better as an organization at planning and executing. It’s a bit frustrating that we couldn’t define a simpler MVP, but I believe the fintech (and especially exchange) space just requires a more featureful system out of the gate. This is why it's been such a long build.


EMX Account Settings

KC: You touched on a good point there mentioning the strict requirements given that we’re operating a market. What’s really unique about us is that we’re building our platform from scratch. You and I sit in a house in Palo Alto with engineers architecting every feature of the API, exchange, clearinghouse, and UI. Many exchanges start by leveraging some form of existing software whether it be through a partnership with an existing exchange or by purchasing “white-label” software. We here at EMX are literally build from the ground up and creating something that doesn't exist in the market. That’s a pretty tremendous feat.

CA: Not only are we building enterprise value for the company, but we’ll have more flexibility to meet changing customer needs (or more likely our changing understanding of customer needs) down the road as we built the platform ourselves. Working with a vendor or even partner through those iterations would be inefficient. We are building from the ground up - so while it is a longer build, we’ll benefit from increased flexibility and a more tailored user experience.

KC: I feel we’ll be able to offer a more consistent user experience in terms of quality and we’ll be better able to prioritize to release new iterative features.

CA: I think we didn’t mention the quality bar we’re aiming for as much as we could have in the earlier part of our conversation. We want the craftsmanship of the EMX experience to convey and support the trust that users will have in our company and our brand. Brands are created over a long period of time, but we believe quality of user experience is a huge part of that. One of the systems we’ve architected from scratch is a completely new matching engine. The EMX matching engine is based on “frequent batch auctions”, which are an implementation of a research paper from the University of Chicago. We’re excited to bring new ideas to the exchange space - and especially ideas like batch auctions that play into our core mission of bringing fairness to markets characterized by a perception of unfairness and untrustworthiness. A feeling of “trust” supported by strong UX and system quality as well as “fairness” bolstered by our market structure and design choices are how we’ve always intended to stand out - and our technology will enable these.

KC: Coming back to today’s release, we’ve launched our Testnet but, as you’ve mentioned, we still have a few things to complete before our live launch. In the meantime, we have a number of really exciting programs for traders to discover EMX: we will be hosting trading competitions for specific communities and we recently launched our Affiliate Program, which allows users to refer their friends and earn rewards. Other plans to complement our product include education and training content for traders.


CA: We can characterize these as growth strategies, as well as ways to get feedback and speed up our iteration process. We also want to get the EMX name out there and start building awareness. We are working with a number of student groups and trading communities to host competitions on our platform, which is huge and will be something we will speak more about in the coming weeks.

I also want to mention that for an exchange - and really any two-sided marketplace - liquidity is paramount so we must not have the “build it and they will come” mentality. Traders need to jump in to EMX on day one and find a platform with sufficient liquidity. This is just as important as - and we believe deeply related to - building a quality platform. We've been working hard on this from a sales perspective to get traders signed up and ready to fund their accounts.

 KC: Speaking of feedback and community engagement, we have some immediate exciting short term plans. Perpetual contracts will be a key differentiator for EMX, so we are thrilled to announce we’ll be releasing with support for perpetuals on EMX. One feature I am personally excited about, which I have been spending some time with on the EMX Testnet, is traditional contracts. We have a crude oil contract listed on Testnet with plans for more traditional commodity and equity contracts soon. The watchlist bar at the very top is going to fill up quickly with a wide variety of additional contracts.

CA: We will be adding to our stable of contracts over time as we hear from more and more traders. One of the key selling points of EMX is that we’re offering a higher-quality and more usable experience and we see allowing crypto traders (collateralized with Bitcoin) access to the same swath of global markets that a trader on Wall Street would have access to as a huge part of that. On EMX, you won’t just find crypto contracts, but global equity, energy and commodity markets as well.

As always, many thanks to our EMX supporters. Stay tuned for more updates! In the meantime, be sure to sign-up and start trading on the EMX Testnet, build a bot, and share your feedback with us at or via the EMX Telegram Channel.


Topics: Design, Engineering, Company Updates, Product