Among the many advantages you get by getting into the blockchain universe, one of them is always being surrounded by constant and creative innovation. In this market, more than in any other, innovation is a matter of surviving in a rough sea.
Bzx follows this path in terms of innovation, offering a protocol that empowers traders, lenders, and borrowers with a remarkably flexible DeFi protocol based on Ethereum.
HOW DOES IT WORK?
Bzx is a brand-new Ethereum-based protocol for tokenized margin trading and lending.
It comes to serve as a connection between incorporated and decentralized liquidity pools, all sponsored by edge credits. Following widespread liquidity that enables users to access a whole edge loaning market, it focuses out to less slippage and a tight spread.
The protocol offers a quite protected and less expensive exchanging opportunity with high liquidity. Counting on a decentralized edge exchanging, the Bzx system can work at any edge.
Surprisingly, it works perfectly with conventional web3 wallets. In the beginning, it all may sound a bit complex but works straight and effective at the end of the day.
WHY IS IT INTERESTING FOR DEFI USERS?
Bzx can positively affect the lives of many users, helping in many ways.
For lenders or borrowers, per example, the platform allows them to stay in control of the keys, meaning they do not have to worry about centralized exchanges getting hacked or something close to it.
Investors who like to earn using passive income regimes on cryptocurrencies may benefit from the platform also, as they can make money with the assets they already hold in their wallets, without giving up control of it.
It happens because interest rates on margin loans are often much bigger than most traditional loans (and still being more secure for users, after all).
Another important aspect to be highlighted is the lower fees. Here, traders have decentralized margin lending at their disposal, which makes trading more affordable and profitable. Usually, traders on centralized exchanges must pay higher interest rates to compensate lenders of risks involved in the process, such as hacks per example.
HOW THE MARGIN TRADING WORKS?
Here comes all the trading jargon again. But we will make it as simple as it is possible to be. It is all about longs, shorts, and leverage.
Long positions involve a simple swapping of one asset for another, like when a user swap DAI for ETH, per example, because he thinks one will have an increase in value faster than the other.
Short positions can be somewhat more problematic for some, but not impossible. Taking a short, as the traders say, means that the user is betting that something will go down over time. It means to trust or expect that something will lose incentive as time goes by. It does surely require some essential aspects, such as leverage, margin calls, and escrow.
To take a leveraged position is somewhat like taking a short position, but on this option, the position you use gives you more through getting.
CAN I TRUST THE PLATFORM?
Whats makes BZX secure as a protocol is that they run on a so-called “censorship-resistant and immutable” decentralized blockchain.
Composed only by audited smart contracts, there is no centralized control, being it from developers or who else it may be.
BzX is audited by ZK labs.
WHO IS BEHIND THE IDEA?
It all started after Tom Bean (current CEO) and Kyle Kistner (current CVO) had the idea after some time brainstorming together.
In April 2018, BZX protocol debuted its fully functional smart contracts. One month later, the first audits were made and in September 2019 it had over 8000ETH locked within the protocol.
In January 2020, BZX protocol reached a remarkable landmark of $7.5million in total value locked (TVL).
Between their well-known collaborators, we can highlight some as Kyber Network, Augur, DefiPulse, Chainlink, and Wyre.
BZX is a 100% decentralized protocol based on Ethereum, where users are free to make tokenized margin trading and lending.
Backed by an empowered philosophy about opting for decentralization to have a better ecosystem, it proves the fact that decentralized margin trade can be better, allowing users to earn even more on their ventures with minimized risks and lower fees.