Steph Chan of the Marketing team at Tacen is excited to share with you all the first of many conversations with Tacen team members to get a closer look at the company and product development. Up first, a chat with our Product Manager, David Jimenez to learn more about him, his role at Tacen and more about the product he is managing – hDEX.
Please enjoy and stay tuned for more episodes to come! For more information, check out the links below to follow us on social and join our Telegram group.
Welcome everybody and thank you for joining us today. My name is Steph and I'm from the Marketing team and today with me is David a PM at Tacen, and we're going to talk about what the team is building. So, jumping right in.
Hey David, thanks for being here today.
I'm glad you're excited. Before we jump in, you want to take a second and introduce yourself to everybody?
Yeah. So like you said, I'm David Jimenez. I am on the product team here at Tacen and I'm principally charged with helping on the hDEX side of things. And I'm sure we'll kind of get into a little bit what I mean, when I say hDEX.
I've been at Tacen since March of 2020. So go almost two years. It's been a wild ride ever since the very, very beginning and I have pretty much loved every single minute of it. Ironically, actually not ironically because we're a crypto company, I found Tacen through Twitter, which is, I feel like crypto Twitter is, is where stuff happens.
Jae randomly had posted a tweet that somebody had liked. And I had kind of been wanting to get involved in the crypto space for a while, as far as like, you know, a professional level. I just didn't really know where to start because I'm not an engineer.
And I feel like that's where most of the cutting-edge stuff, I felt that that's where most of the cutting-edge stuff happened, but a tweet from Jae popped up on my timeline looking for people that could help him with some specific things, and I thought, oh, I can help him with these things. And so reached out and it's, you know, been one of the most rewarding experiences of my life.
How did you first even get into crypto to begin with?
Yeah, kind of weird. I have, I had, uh, I had family members, you know, back in like 2011, um, that had like little mining rigs in their garage. So I like ever since I was a really like, like kind of a younger teenager, it had always been kind of around. And so I'd always kind of been around it, but like I said before, I'm not an engineer I haven't taken, I didn't, I never took the time to, um, you know, learn the deep tech behind it, but it's always been around and, and, you know, in the last couple of years, I've just become really, really interested in, you know, autonomy on like communal levels and, you know, on an individual level as well.
And I think that crypto really fits that, you know, life philosophy really, really well. And so naturally I was, I was drawn towards that. And so a couple of years ago I really kind of started feeling like, wow, there's a lot of really cool stuff happening. You need to figure out how you can find a way to contribute, you know what I'm saying?
That's great. One more quick question. What's been your favorite thing about working here at Tacen. You've been here for over a year now, so
Yeah, yeah, no. Um, my favorite thing is that, well, there are a couple of things. One is that I really do believe in what we're building. I think that right, right from the beginning, right from when I first started, I got the vision, I felt the vision and I wanted to, um, contribute to that vision in a positive way.
And I feel like every single day, everybody that's here where we were relatively small team. We all get to do that every single day. We all get to contribute to that vision because we've all really bought into what you know, Tacen and is trying to build. So working on that kind of a team has been, has been awesome.
And, and, you know, maybe even more than that, or more importantly than that, really feeling like you're, you know, starting from ground zero and building something up and trying to solve all of these kinds of intricate puzzles and trying to figure out, okay, I have nothing. How do I get from zero to one? You know, that, that, that stuff has been so much freaking fun that sometimes I don't even feel like I'm, you know, going to a job.
I just feel like I'm going to solve these puzzles and I'm trying to work with other people to solve these puzzles. And it's an absolute riot. I love it. So, yeah, I couldn't imagine doing anything else now that I'm doing it. You know
Yeah, you can't go back, right? Like once you're here
Nope, no going back
No going back. Awesome. So tell me a little bit about your team.
You know, the, the product team at Tacen is relatively small. We have, um, you know, our CPO who kind of manages most of the strategy stuff. And then, uh, you know, us, you know, one level below and we're, we're kind of working with specific products. Like I said before.
Um, my primary responsibility is, is with the, the hDEX. So, um, I mean, just a brief overview of what we've done. We've done a lot of wire-framing, we've done a lot of market research. We've done a lot of working with engineers and that last part is principally, what I try to spend a lot of my time doing, just working with the engineers, seeing what kind of blockers I can take out of their way.
Making sure that they have everything that they need to be able to. Get in the code and, and build everything that needs to be built. So, um, that's, that's a lot of what I do. I, some of the stuff, some of this stuff overlaps with sales, some of this stuff overlaps with business development. So something that's really fun about product is that you really do get to have your hand in a bunch of things and you get to see what's going on from a bunch of different perspectives.
And that really influences the way that the product gets built, because you can see. Um, you know, some of the outcomes of the research, you get to see some of the outcomes of the sales calls and then you also get to interact with the engineers and see what's being built and what works and what doesn't work.
And yeah, it's a really fun intersection, of everything I think.
That's awesome, that makes you the perfect person to tell us more about what is an hDEX. You touched on it a little bit. Why don't you go into more details about that?
Yeah, so the hDEX was kind of like the founding, I don't know, I don't know how to describe it because you know, our product line is growing.
But the hDEX was kind of the, the reason that Tacen was founded and, and we didn't have that name for it. That name hDEX is relatively young.
And what does hDEX stand for?
Yeah. Yeah. hDEX stands for hybrid decentralized exchange. And it it's just that, uh, you know, put it, it's most simple. If I can put this in one sentence, uh, an hDEX is centralized order management with decentralized settlement.
Basically what that means is, users traders are going to submit their own funds that they have custody of. They're going to submit orders for trades to a centralized order book. Those trades get matched, and then, they settle in a decentralized fashion. So it's a really interesting approach, but we were, Jae our Founder was principally really worried about the current state of crypto exchanges. There's a, there's a big gulf that exists in the crypto exchange space. And that gulf stands between, you know, centralized exchanges and decentralized exchanges. And then, you know, the reason for that is on the one hand we have centralized exchanges.
They're really fast. You're able to do a lot of different things. You're able to do cross chain trading very easily. You're able to do so very quickly. You're able to, you know, do a wide array of things, but one of the downfalls of a centralized exchanges that you have to give up custody of your funds. You don't necessarily know who you're trading with most of the time, you're just trading with the exchange and there's a lot of gray area that we don't know about. And then there's a lot of security risk. And we've seen this in years previous where, you know, custodians, they have their coffers emptied, by bad actors.
Or there are data leaks of you know, trader information. And so it makes centralized exchanges the fastest and the most cutting edge solution. But it leaves a lot to be desired on the other, on the security side. Now we go back to the other side, we go over to decentralized exchanges. They seem to you know, something of a solution to security problems.
I mean, take any, you know, decentralized swap protocol, like Uniswap. All you have to do is connect your Metamask wallet, and then you make a simple swap, right? There's no KYC involved. There's no, there's no reason for a data leak or anything like that. However, what happens is, is gas can be crazy fricking expensive. I don't know. I mean, I don't know if you've tried to make any kind of swap out Ethereum lately, but it's like $400 for a simple transaction. Right? It's it's unreal.
It's wild, yeah
Cross chain trading is, is very, very difficult on a decentralized exchange platform. I mean, um, there aren't too many worthwhile solutions that offer cross chain trading and the decentralized space and the speed just isn't there.
I mean, I'm sure that some of I'm sure that any of us. You know, tried to trade on a decentralized exchange and you make the trade and then you go look on etherscan, and you just wait for the transaction to go through, you know what I'm saying? Um, so you sacrifice some speed. You do sacrifice it's, it's kind of like they re they represent two sides of the same coin.
One is, is relatively good with speed and performance. And then the other is relatively good with, with security, but there's no way with the current architecture that both of these, both of those, you know, foundations have to be able to bridge that gap between them. It's just not going to happen.
It can't happen. So, you know, our founder, Jae thought a lot about that and he wanted to come up with some new novel solution that was able to bridge that Gulf that was able to, you know, provide a solution to both of those unique problems on the centralized and decentralized side and hDEX is what has come out of it.
So I'll go through you know, step-by-step process of how it works, but the most important thing to realize is that, you know, with our centralized order book, we’re able to provide users with a trading experience that is on par, as far as speed goes with centralized exchanges all the while not having to require custody of funds.
So it really is kind of like a best of both worlds type of experience. Users are able to, you know, control, they're able to maintain custody. They're able to control settlement. Settlement is done an in an entirely, um, you know, person to person, party to party fashion. All the while they don't have to sacrifice, you know, the speed aspect of it.
And then, you know, just a kicker on top, because users are, are collateralizing their own funds and then maintaining custody of their own funds, they're able to do cross chain trading without paying gas fees for every single transaction that just happens, you know, right at the end. So it's a really interesting solution.
It's a really cool and novel way of, of trying to solve some of these, these, you know, decade old problems that we've been facing in the, in the space of, of centralized exchanges and the decentralized exchanges. Um, but yeah, that's kind of just the, the very simple, very general overview of what an hDEX is…
Yeah, no, that's, that's amazing.
And honestly, thinking about the current landscape, a lot of people, especially in crypto have so much concerns about privacy, about ownership of their crypto. You know, very famously, “not your keys, not your crypto” is something that's always touted in the space. So I do feel like this solution, allowing people to maintain their own custody, their own keys of their crypto actually solves a huge pain point for exchange users today.
No, absolutely. I mean, Exactly what we're doing. I mean, that, that whole, it doesn't get said anymore. Not your keys, not your crypto right. I don't hear that as much as I used to, but the principle still stands and I feel like that's why so many of us have been attracted to the space in the first place.
So why would we, you know, sacrifice those foundational principles that we were all super into at the beginning in the name of like just having a fast and efficient, um, swapping protocol. When, you know, as we're doing with hDEX, you can have the best of both worlds.
I know people are wondering how exactly does it work? Can you go about in a little bit into, the tech behind it?
Yes. Um, I'll kind of just go through what we're going to call, you know, like a user experience, a user life cycle. So users to be able to access the exchange, they will need to create their own what we call a non upgradable smart wallet. And this is a really interesting concept in that users are going to be able to maintain the private key, their own private keys to the smart wallet. They're going to collateralize funds, you know, from their own wallets. Like for example, let's say a Metamask, they're going to collateralize funds from Metamask into their own smart wallet. And that smart wallet is going to be able to interact with the centralized order book.
Um, so once users have collateralized their own funds from their wallets into their own smart wallet, they are then free to make a bunch of trades make a bunch of trades and then have their orders matched by the system and then be able to trade on those orders once they've been matched in and swapped and so on and so forth.
And they're going to be able to engage, you know, with each other on, uh you know, person to person submitting to the centralized order book, fashion. For as long as they want, when they're ready to settle and when they're ready to withdraw their money, settlement is also done in a, you know, person to person fashion.
The most interesting thing about the hDEX is like I said, we have a centralized order book, which users submit to and then there's decentralized settlement. Tacen's centralized order book is being built, leveraging, Project TXA's Decentralized Settlement Layer and the decentralized settlement layer is built specifically, you know, for what we're trying to do.
The Decentralized Settlement Layer is basically a quorum of data oracles. TXA calls them Settlement Data Oracles. These Settlement Data Oracles are constantly watching and listening to all of the orders that are being matched. All of the trades that are happening. And they're calculating all of these obligations and they're calculating, who's going to be able to withdraw how much, and who's going to be able to withdraw what.
So when you're ready to settle, you call out to the settlement data Oracles. You know, backtracking a little bit. The Settlement Data Oracles are run by the community. Project TXA is, you know, an open source project. Anybody in the community can participate. And so these Settlement Data Oracles are run by members of the community. Users are going to call out, they're going to call out for settlement to these Oracles. The Oracles are going to in a random quorum, like fashion, they're going to determine what the obligations are of um, you know, the user that's trying to settle the user, that's trying to withdraw.
And then once those obligations are written, they will be able to withdraw whatever corresponds to them. So let's say that I am, I collateralize some money. I make a bunch of trades and then I call out for settlement. I call it for settlement. I wait for this quorum to determine what it is that I owe to somebody else and then what is owed to me.
Once I have everything that's owed to me, I am then free to either withdraw that money back into like my Metamask account or I can re-collateralize that money and continue to trade on the exchange. Um, something that is really, really cool about the decentralized settlement is, like I said, the settlement data Oracles are run by the community, and so they're able to charge a fee for doing what they do for providing this settlement data for providing the written obligations of each trader.
So in a really interesting way, not only does this Tacen's hDEX model and TXA is Decentralized Settlement Layer DSL. Um, not only do they, you know, provide this really interesting solution to the problem, that's been plaguing, both centralized and decentralized exchanges, but it puts more money right into the community because these Settlement Data Oracles are able to, you know, receive a small fee for their service as data Oracles. And so with anybody in the community, being able to provide that service, it means that more of this money that would traditionally go to an exchange, it goes back into the, it goes back into the community anyway, which is a really interesting and a really novel solution that should get a lot of people excited. Because, if people are responsible for maintaining the structures in which they trade their own money. I believe that, they're going to be much more motivated to making sure that the standard or the quality of, you know that settlement layer or the standard or quality of the, the output, the result is going to be much, much higher.
And I think that that's a really, really interesting part of this. So, you know, just to go over everything that I said, traders collateralized their own, their own funds and their own non-upgradable, smart wallets. They are able to trade within the exchange, submit orders to a centralized order book. When they're ready, they're able to call for settlement.
Um, settlement has done P2P and they and settlement obligations are written by settlement data Oracles on Project TXA is Decentralized Settlement Layer, and then they're able to either withdraw that money, re collateralize it and continue trading.
That's awesome. That's really exciting, David. This is going to be the next big thing in exchanges, right?
Like this is really going to change how exchanges function moving forward, basically, because why would you ever go back to having someone else control your funds when you can control it yourself?
Yeah, no, I mean, we've, we've kind of been, been going stealth mode for a little bit. We've been very quiet.
We've we, we have a full team of engineers just, you know, shoulder to the wheel and they're grinding and going for it and building. However, there has been a lot of interest, uh, as far as what we're doing, we have people reaching out all the time. Um, telegram group is growing. And there are a bunch of even institutional like partners that are very, very interested in this new, um, novel architecture for a crypto exchange.
And I think that the writing's already on the wall, like you said, I mean, this is the next generation. I mean, um, this is the next thing that's going to further the quality of, of, you know, the crypto exchange space and crypto in general, because it opens it up for, I mean, it provides a lot of very unique solutions to problems that have been around since the genesis of, you know, the crypto space in general.
Yeah, absolutely. So I wanted to ask. You kind of mentioned that everyday trader you kind of mentioned institutional, who, who is the target customer or I guess another way to put it is who would benefit from, hDEX and from DSL.
Yeah, that's a really interesting question. I we've had a lot of interest on both sides actually.
Um, there are a lot of, there are a couple of, there are plenty of traditional, TradFi, traditional financial institutions that have, um, been very interested in utilizing the hDEX model to bridge into crypto. And then, I mean, going back to this, to the original vision of what we're doing, I mean, all of this started with, you know, Jae, the CEO being very, very concerned that he had to sacrifice either speeds to trade on a decentralized exchange, or you had to sacrifice security to trade on a centralized exchange. And I know that the crypto space is full of people that are concerned about those exact same issues. And they're concerned about, you know, rising gas fees and they're concerned about, um, scalability and they're concerned about what, um, whether, you know, layer two and layer three solutions are even going to be usable and, and they're, they're concerned about so many of these things that, the hDEX just kind of slips right in as, as a perfect fit and solves. So I, you know, on the retail side, I think that the hDEX model is for everybody it's for anybody that's interested in both speed, which I think we all are and privacy. And I think we all are, we wouldn't be in crypto if we weren't interested in privacy and security.
Right. So it really is for everybody that's in the space, institutional or retail.
That's great, David. What has been the most interesting find or insight this year for you in relation to hDEX? Cause I know you've done a lot of research on this topic.
Yeah. Yeah, no, just that there's a market for it. I mean, philosophically speaking, it's really easy to say. I believe in X, Y, and Z, as far as the value goes, but, um, to be able to sit down and talk with people and, and, and really hear it from the mouths of the people that you're wanting to reach that, hey, this is a solution that is worthwhile.
I mean, um, you know, we went to Miami a couple of months ago and the interest was there. Uh, we talked with plenty of people and everybody was very, very interested in what we were doing. It felt really, really good. We know we went through all of 2020 heads down building, and we're still heads down building obviously, but it's been really awesome this year too, to realize that, oh my gosh, more than just any kind of philosophical principle or any kind of abstract theory. This kind of idea that we're building is going to have real concrete presence in the crypto space when we release it, you know what I'm saying? It's going to have a fit. It already has a fit, you know?
Right. Basically there's a huge problem that people may or may not be aware of and we're providing the solution for it.
Yup. Yup. Exactly.
Awesome. Well, David, thank you so much for taking the time to chat with us today, David, will be back next time with our other PM Lucas, and we will be having more regular chats about what we're building here at Tacen. And in the meantime, thank you all for listening and see you next time.
Can't wait. See ya!