Margin Trading Made Possible

The only gateway for continued access to cryptographic currencies was to trade them on exchanges. If recent reports arte anything to go by, then the crypto sphere is being controlled by over 500 exchanges. These platforms were meant to be channel where traders can buy and sell their digital assets. Centralized exchange was the first to be developed and a decentralized platform soon came on board. The irony was the former became the premise for the latter’s success. This simply means that assets to be traded on decentralized exchanges had to be ported to the centralized before they can be transacted.

This procedure does not augur well for traders because their data is laid bare and other culminating risks are bound to develop stronghold. While this scenario is not supported by many traders, centralized exchanges are actually not at fault. The main reason why assets had to be re-ported to CEX before trading was because available decentralized exchanges do not have clearing houses and margin trading. Continuing with DEX attracts low liquidity because the platform might not scale when transactions are much. Likewise, costs will be tripled and the only alternative would be using the next platform – centralized exchanges.

These downsides and many others such as large spreads where the quantity in demand cannot be provided were part of reasons for bZx’s formulation. What is bZx? The platform was meant to be solution to overt concentration on CEX when its counterpart – decentralized exchanges could have done better if empowered. It was designed to meet existing pain points and see to matching and settlements in centralized exchanges. It is pertinent to note here that the platform is not an exchange even though it might seem like one. Instead, bZx is a protocol that has the ability to get integrated into platforms that want to harness the benefits of margin trading. It can be added to current crop of exchanges and relays and in each of these cases, there would be token-incentives to be issued.

Exchanges and relays that integrate bZx will be empowered to offer margin trading and lending services to end-users. Components bZx has amazing features hoped to project the platform’s goals. There is the bZx. Js Library – a Java script developed library that has tools needed to develop smart contracts that would be vital towards recreation of margin trading features on decentralized exchanges. The bZx smart contract feature is in tandem with the platform’s line of smart contract conceptualizations. The smart contract will liquidate ERC-20 traded tokens and bring about margin lending on the chain.

Finally, there is a web version of the protocol known as the bZx Portal. Users who are not in tune with a relay or are not trading on any exchange can leverage the portal in accessing margin trading. The portal uses the library in bringing down margin services to those who need it.

Oracles on exchanges are meant to direct transactions but downsides such as low throughput had brought on the bZx Oracle – an oracle to be used on the bZx protocol. It would be transformed to a marketplace where developers can create oracle to meet existing pain points and traders can place their orders on the marketplace. Developers are empowered to develop and monetize their oracles and users will incur low fees and other margin services by using the oracle.