TGO

Capital Analysis

**THIS IS NOT FINANCIAL ADVICE, JUST AN OPINION. DO YOUR OWN RESEARCH

AND HOLD NO ONE ACCOUNTABLE FOR YOUR TRADING ACTIONS BUT YOURSELF**

Project Analysis for EverMarkets ($EVR)

Brief Overview

The $EVR token is an ERC20 utility token to be utilized on the EverMarkets platform. It is a
decentralized trading platform focused on the derivatives market and offers contracts, giving exposure to
asset classes that include but are not limited to: stocks, bitcoin, gold and oil. By decentralizing the
platform they allow for lower trading costs, secure collateral, immutable trades and equal access (no co-
located servers to quickest market data). They are implementing a periodic pro-rate call auction system,
by avoiding the continuous order books that rely on speed the platform will: reduce volatility, improve
execution of large volume order and reduce the possibility of flash crashes. The platform uses the native
token $EVR as a means for collateral, leverage, settlement of contracts and administration of the system.
Users can stake tokens to help facilitate admin roles such as: a matching machine (pairs sellers and
buyers) or helping to provide margin. The users of the platform will then pay a small percentage of their
transaction toward these stakers to incentivize their actions. All trades on the platform will be processed
through the Ethereum block chain, and non-trade related data would be recorded on a separate DPoS
chain, which will reduce cost and improve speed.

For beginners, derivatives are financial products that “derive” their price from an underlying asset; these
are typically commodities (oil and gas) or stocks. The derivative acts as an agreement between a buyer
and seller to buy/sell the underlying asset for an agreed upon price at a set time. Typically, futures are
used to hedge risk. For example, a farmer can buy a futures contract on the price of wheat; this will lock
in his price for that wheat when he is expecting his crops to be ready to sell. If he agrees to a price in the
contract even if the wheat market crashes he is guaranteed his spot price. This will reduce downside while
also minimizing upside. Another use of the derivatives market is for leveraged trading. A derivative on a
stock will typically represent 100 of that stock, so a 1$ movement in price would result in a 100$
profit/loss. The problem with the current market is that a few big players around the world control the
futures trading. These exchanges have costs such as rent or employees wages that must be extracted from
the exchange. This in-turn forces trading fees to be high.

Company Background

The team is an all-star trading team with a substantial amount of trading experience. Jim Bai has
experience at Citigroup and Graham Capital where he managed over $1B in options and futures. He also
has machine learning experience through the means of a startup. Mark Pimentel has over a decade of
experience with algorithmic trading and building quantitative futures & equities strategies. Every single
member of their team has insane credentials with experience at large banks or exchanges. Their block
chain/platform developers have experience at both Microsoft and Amazon.

There is no point listing all of their advisors, but experience at large investment groups with experience in
fintech and trading are all common denominators. They have some advisors with experience at Goldman
Sachs and there is also regulation and law professionals on their team.
 TGO Capital Analysis

Investment Analysis **but not advice**

The first aspect to making this platform successful is the order-matching engine. In order to prevent high
frequency traders or having an advantage by increasing trading speed EverMarkets is implementing a
price-size priority, where orders are filled in proportion to their volume on a price level (this is also
known as pro-rata). This allows regular traders to compete with institutional investors in terms of de-
emphasizing speed. EverMarkets is implementing a crossing algorithm that will extend auctions with
regards to both volume and price to establish stable prices. If the crossed volume is below a certain
minimum or the price is too far away from the previously established reference price then the auction will
continue until those requirements are satisfied. Additionally, the platform will use a network of arbitrators
in the case of an oracle giving an incorrect final settlement price (traders given the ability to challenge
settlements). Traders and arbitrators are required to stake tokens in order to dispute the price, if consensus
is reached the staked tokens are returned, if not there are additional rounds of arbitration.

To further ensure market stability and integrity a matching engine is required to required to stake $EVR
tokens, these backers will earn profits from backing futures contracts with their tokens. These backers are
responsible for setting margin constraints, where they will be incentivized to act conservatively, as if the
margin call fails and the margin syndicate is insolvent, the backer’s tokens are at risk. EverMarkets has
made it clear that while the system is decentralized they encourage contract backers to reveal their
identities.

Another core element to EverMarkets is the margin syndicate. This provides leverage to traders and acts
as the 1st line of defense against counterparty risk. Traders are required to post collateral for their trades;
margin syndicate levels are required to stake tokens to ensure there is capital backing the syndicate.

EverMarkets has also promised to stress test their system to simulate order profiles during volatile periods
and will measure the performance during these times. Additionally, contracts will have built-in contracts
that will have stop conditions to impose maximum price fluctuations; these are decided by token backers.
This effort to prove the legitimacy of the platform goes a long way, especially since the industry they are
trying to penetrate is heavily regulated. It is clear they are trying to build an institutional grade exchange
with the same level of liquidity.

It is important to note that they have allocated 35% of their tokens to loan to liquidity providers at
advantageous terms to support the adoption phase. This means that if there is no one to take the other side
of a trade their liquidity providers will make market and trade against it. This is vital to the initial
adoption phase of the platform while there is low volume to trade against. The team’s experience at big
firms like AQR Capital, Knight Trading and Citadel prove to me they have the experience with retail and
institutional trading to pull this off.

Lastly, I want to touch on the tokenomics. Incase you missed the entire write-up above, every backer of
the platform is required to stake tokens to perform their duties (and reap the returns). This will create a
pseudo decrease in supply of the tokens as the platform grows.

Catalysts

There is no roadmap.
 TGO Capital Analysis

Investment Risks

The top risk factors include:

• With almost all exchange plays, this is going to be a medium-long term play
• Large market cap, low % of tokens for sale
• Legal risk and potential compliance issues