Episode 38 - Sam Buxton of Damex

Speaker A: Welcome to Kastoshi and today we're talking to Sam Buxton of Damex. Um, hi Sam, how's it going?

Speaker B: Zuber, how you doing?

Speaker A: Hey, it's going good, it's going good, thank you. So could we start, could you just tell us in two minutes what does DAMX do?

Speaker B: Yeah, no problem. So Damex is one of the 14 license and regulated uh, distributed ledger technology companies I. E. Cryptocurrency companies in Gibraltar. Uh, we incorporated in 2017 so we've been around for a while. We spent 13 months going through the regulatory hurdles of actually acquiring and obtaining the very prestigious Gibraltar DLT license. So we are a licensed and regulated digital asset custodian and liquidity provider with that regulatory stack and infrastructure. One of our products that we offer is our OTC trading desk which has propelled us to get to where we are today from a cash flow and revenue perspective. We've onboarded over 750 institutional trading clients. Uh, we trade around 120 to $150 million a month currently. But that grows quarter on quarter and has been for over two years. We've also been positive EBITDA for over two years as well now. So that's what we do currently.

Speaker A: Okay. So could I ask you, a lot of people, when you talk about otc, a lot of people might think well I'll just go to Binance. So what's the difference between your a customer for you as opposed to someone who might just go to Binance?

Speaker B: Yeah, Binance is awesome. Right? And sometimes we use Binance. We have an institutional account at Binance and we have for a long time. Uh, the problem, I mean the, the difference are as follows. Uh, we have a uh, we have a rotation a rotor of actual traders that offer a VIP service, very bespoke one to one. Uh, which uh, retail exchange like Binance doesn't offer and therefore we're like middlemen if you'd like. But we also use a variety of exchanges for deep liquidity to provide best pricing. So if Binance isn't providing best pricing on a certain asset class of the client wishes to trade, you know, we source liquidity from other areas. So like we, we offer a pricing aggregator service which is very um, which is a very bespoke VIP service so you can chat to your traders live, have a phone call to add to that. Binance isn't necessarily regulated anywhere in the world which is, which can be a good thing but also can be a bad thing for maybe your institutional funds or high profile client that really feels Comfort in dealing with a regulated entity. And that's where we step in. So we offer a uh, regulated and credible uh, single point of contact for deep liquidity. They're a bespoke, um, face to face if you'd like experience.

Speaker A: Yeah, I can attest to what you're saying. I mean full disclosure, I am a Dimex user and when, when there was an issue with USDC and I wanted to sell a whole bunch of USDC during the Silicon Valley bank collapse, I tried a whole load of places to sell it. The only place that could do it was Damex. Um, and I don't know how you guys did it, but thanks.

Speaker B: Yeah, I mean we, that's, that's one example. I guess first thing worth mentioning, uh, regarding the whole uh, deep egg of USDC and whatnot is that, you know, we've been around for a while, we have a very senior experienced team now, uh, and we haven't made it past the last five years. Bear markets by luck. It's no coincidence. We move fast, we know what we're doing. And uh, yeah, when it came to USDC, I mean we have accounts open on 20 plus institutional exchanges all around the world. So we're able to if 19. It just so happened that 19 of those accounts closed down. USDC trading, the 20th didn't. And we were able to source liquidity um, when needed as opposed to the single user that might have two relationships. Ah, two exchange accounts opens. Right, because you don't need more than that. But if them two exchanges stop trading USDC or any asset or they ban any jurisdiction, you can find yourself in a difficult situation. But we're very diverse. We have very diverse regulatory and tech stack now which um, kind of uh, is a hedge against these black uh, swan events.

Speaker A: Okay, and the next question I've got for you is what is this uh, Damex app about? And Visa Card.

Speaker B: This is it.

Speaker A: In case anyone can't see.

Speaker B: Yeah, this is my baby. And that's a lovely design there by Kensho Marketing Agency out of Gibraltar. But um, yes. So what is the app? Right. And what is the card program? So we basically spent the last five years building up our balance sheet and our uh, revenues with our institutional service, if you like Damex business or Damex B2B. Uh, and then we've used the same regulatory and tech stack to develop over the last 15 months we've developed a retail product uh, which is a spin off from everything we've learned in the institutional space with deep liquidity and custodianship. We're bringing that over to the retail space with a finance app called Damex where you can KYC automatically within a couple of minutes. In the UK and Europe today, we're going to be going live in the Americas later this year as well as Gibraltar. We're going through those processes with the local regulators now. Uh, and basically it's a finance app, uh, a smart finance app where you can deposit fiat currencies into ibans in your own name, similar to challenger banking experience like Revolut. Uh, you can deposit and withdraw cryptocurrencies into wallets that are also segregated and in your own name too. Uh, so it's a single app where you can really manage Treasuries in alternative assets. To add to that, we have an approved card program by Visa. So when you do have fiat assets, uh, you can spend those using your Damex Visa card. That's just where we are now. So we've basically created a single point integration on fiat and cryptographic assets. We will be introducing in the future our traditional financial services like credit line loan facilities. Uh, traditional stock trading is of massive interest to us now, um, and others. So it's really, we're really building a, a Neo financial services marketplace, um, but with digital assets at the core of that ecosystem, um, with our own digital asset of course being fundamental.

Speaker A: Okay, and so this is a mass market product, is that correct?

Speaker B: Correct. Yeah, it's a mass market product.

Speaker A: Okay. Okay. Um, now could I move on to ask you about the Damex token because I've had a lot of people quite excited, uh, about the, uh, launch next month. Um, could you tell us a little bit about what this token is, what it does and why it matters, um, and when it's coming out?

Speaker B: Yeah, no problem. So, because we uh, did a slight pivot into launching a mass market product or retail product, as you've just mentioned, we thought it would be really cool to launch our own digital asset, the Damex token, um, whereby we built a bunch of utility into the retail app as it is now, and plan to continue building utility. I mean, we have some amazing plans and in our back pocket here that we're going to be slowly but surely releasing within our marketing campaigns. But the token currently is a pure utility token, membership token if you like, where when you stake your tokens and hold them on the DAMX app, you unlock benefits and perks within the Damex ecosystem. Uh, so things like trading fees, you hold damx tokens, your trading fees are reduced. Um, the DAMX app, uh, I'm not sure if for anybody that's watching for the first time, we've actually built a Move to Earn gamification layer inside our retail products. So if you download Dimex app right now in UK or eu, you'll see the middle tab is Move. So as you walk and as you're moving, you're gaining perks within the app. Ah. And those perks are currently things like more cash back. So every step you take, you get more cash back on your spends. With the Damex Visa card, we're going to be rolling out yield and, uh, yield, uh, for your coins as a service soon. So as you're walking, the more you walk, every step you take, you make a little bit more yield on your stable coins, on your cryptocurrency. Um, and holding DAMX tokens basically amplifies those benefits. So you might make 1% cashback, but if you're holding DAMX tokens, you'll make 2. You might make this much yield on your coins, but if you're holding DAMX tokens, you'll make that much. And we're going to do that with everything we roll out in our, um, financial product marketplace, if you like. Everything that you do will be amplified if you hold DYMX tokens. And that's the primary utility of the Damex token.

Speaker A: So basically it's a bit like Stepn, but you don't have to buy those expensive trainers.

Speaker B: Yeah, I mean, it's uh, I mean, disclaimer. Like we were working on this way before Stepn came out. We never called it Move to Earn, uh, but when there was a Move to Earn sort of, uh, rally, uh, and it became popular, we were like, holy crap, this is kind of Move to Earn, um, but it's similar to Stepn in the sense that it gamifies walking. Uh, certainly, but it's, you're not going to walk using the Damex app and make 500 to $5,000 at the end of the month. Uh, there's not, I mean, no, I'm not trying to bash Step in here, but there's no Ponzinomics around that we're, uh, super sustainable and we're not paying out cash for people to walk. We're basically increasing your perks. So it's more of an opportunity cost as opposed to a direct cost for us. Um, and then it's also so that Stepn's an NFT game, whereas we're really like a centralized finance app, uh, with a Move to Earn gamification layer. We're not an NFT game. And then you have your company like Stepn, uh, sorry, uh, you have your company like sweatcoin, um, which is also an amazing app. And I love the sweatcoin guys, uh, but that's more of like a pure fitness play, like a fitness application. We have a really cool marketplace, whereas again, we're different. We're somewhere in the middle where we're actually trying to build a banking ecosystem. And I say that with full, um, intentions on going for banking licenses ourselves in the future. Uh, we don't have a banking license now, but we certainly intend to go down that route. And that's something that Step Earn, um, or even Sweatcoin, that's our differentiators. But nonetheless, if you're into walking and you like move to Earn, you can download Stepn, you can down sweatcoin, and you can download Damex and Earn and gamify all three of those experiences because they're complementary, they're not competitive in that sense.

Speaker A: I think that makes sense. Even the Damex Visa card means you can just spend it in normal shops, which has been very useful. Um, okay, so could you tell us when does this token come out and where can people buy it?

Speaker B: Yeah, good question, Zuber. Thanks. So the IEO is scheduled for April 19th. Uh, we're going to be going live on two centralized exchange launchpads and then we have a third DEX listing the same week. So we're going live on three exchanges, um, where we'll also be going live with a third party market maker as well as. So we're contracting a third party market maker for all three venues. Then we are doing our own market making because we're traders. So we've been doing this for five years. So of course we're going to do our own liquidity management and market making on those three venues too. And then the two centralized venues will also have their own market making teams on those order books too. So we plan for liquidity to be, uh, well managed.

Speaker A: Okay. Okay. And the final question is, um, I know you've, um, talked a bit about this already, but what's the future plans for Damex, um, that you can talk about?

Speaker B: So. Good question, Zuber. I mean, our mission is to create digital asset experience. We want to increase digital asset adoption globally. That's our mission as a company. And we want to do that for people in their businesses and individuals in their personal lives. We've been doing that for businesses now since 2017. Uh, and our success so far is testament to that. We've been adding value to businesses, operations and treasury management using digital assets for over five years now in a regulated environment from day one. Not many companies can say that we're now moving into a space where we want to have an impact in people's personal lives within a digital asset experience. Uh, and that's where the damx retail app comes in. DAMX is DAM Experience, Digital asset management experience. That's our mission. So everything that we do and every decision we make will be with the goal of increasing and improving people's experience with digital assets and distributed ledger technology, full stop. With that being said and using that as our foundation, we have two verticals. We have our B2C and our B2B. And each of those will have their journeys that sometimes will overlap and sometimes we'll just go off in complete different directions. But for the B2B space, what I can say, and which is what I mentioned on this call, we are really trying to integrate banking and digital asset custody. So we will be in the future we will be going for uh, more advanced financial services licenses. And then in the retail space we will probably end up, uh, there's a whole variety of things we can do in the retail space. But I can say that we do have an interest in uh, things like micro lending. Uh, and we really feel like there's a big opportunity right now in Latin America and we have our eyes set on Latin America to the point where we have some big announcements coming soon. We've made some strategic acquisitions in that area of the world and those announcements will be coming out soon prior to the ieo. But um, yeah, we're going to have, we're going to, in the retail environment, we're creating a user experience where if you're in Spain, you'll be able to send funds to your family members in Peru, Chile, Mexico, Colombia, big Latin American countries with just a few clicks of a button within the Damex ecosystem. Uh, so cross border remittance is important for us. Uh, so that's our financial inclusion piece. And then everything that we offer within our retail ecosystem is going to be cheaper if you're walking, which is the health inclusion and sustainability play. So yeah, there's many ways in which that can go. It's probably worth a, ah, two hour conversation to go through all the intricacies and different directions we can take. But in general I think it's useful to maybe stick to that. We're all about uh, creating a digital asset management experience, a Damex experience that promotes health inclusion and financial inclusion around the world.

Speaker A: Okay, sounds good. Okay. And, uh, where can people find you? Could you just spell it out for the audio only listeners?

Speaker B: Where can they find us? Yeah. So Our website is www.damex.IO. if you're a business and you require some advice and guidance on how to use digital assets in your day to day business, maybe to send and repatriate funds globally, uh, reach out, like that's what we do on a day to day business, a, uh, day to day basis, and we have been for five years. And if you're a retail everyday user, right now the app is live in the UK and eu. Uh, the app will be going live this year in the Americas, so the usa, uh, with four or five strong Latin American countries, which I obviously, which I've also mentioned on this, uh, chat already, um, as well as Gibraltar, which is our hometown. We're really excited to launch our app in our hometown this year. At some point we, uh, want to do it right. We're taking it step by step. We're not rushing. Our beautiful position right now is that we have a strong balance sheet and positive revenue. So we're not in like, uh, we're not under a pressure to deliver an average product. We're interested in going to market with top products at this point. So. Okay, you can download the app on App Store, uh, on the App Store and Google Store.

Speaker A: Okay. All right, thanks a lot. Okay, so it was great talking to you today, Sam. So, um, all the best with, um, with the launch.

Speaker B: Yeah, no, uh, appreciate your time, Zuber. If anybody has any questions, uh, they can join our telegram group. We're on telegram too. It's becoming more active as we approach, uh, the April 19th IEO launch date. Uh, my team's on there. There's always like five or sixes on there. So jump on the telegram group, ask questions, uh, and let's, let's uh, embrace this. We're super excited.

Speaker A: All right, thanks a lot.

Speaker B: Thank you.