Perpetual futures contracts became a force to be recognized within the crypto industry and surely is one of the best growing niches in decentralized finance. Several platforms such as Bitmex, Uniswap, and dYdX are impacting the scene with big trading volumes that just seem to increase every day. How does MCDEX fit into the bigger picture here?
MCDEX, an abbreviation of Monte Carlo Decentralized Exchange, is a DEX built on Ethereum blockchain for perpetual contracts with an interactive and user-friendly interface. It is the pioneer in introducing on-chain liquidity backed by AMMs for perpetual contracts.
MCDEX: A Quick Background
For those unaware, it is essential to understand what is AMMs, futures contracts, and perpetuals.
AMM means Automated Market Maker. Usually, one user’s counterparty is another trader. An AMM is an algorithmically set artificial intelligence that allows the liquidity pool to act as users’ counterparty when trading.
A Futures Contract represents a legal agreement to buy or sell a particular crypto asset, or security at a predetermined price at a specified time in the future.
Perpetuals are an expression for perpetual bonds, which are simply bonds with no fixed maturity date.
How Does MCDEX Work?
The video above explains how to do liquidity mining on MCDEX!
MCDEX is a decentralized non-custodial exchange focused on perpetual contracts, using a hybrid model that combines AMM technology and Off-chain order books to enhance trading performance within the system.
The platform is powered by Mai Protocol, a well-known smart contract for building DEX solely focused on derivatives on Ethereum blockchain. Mai protocols are fully audited by top-notch security companies Open Zeppelin, Chain Security, and Consensys.
Highly focused on the transparency aspect, the platform has put a lot of effort to ensure asset security. Users can track every on-chain transaction, knowing that funds are safe and can only be accessed by the owner.
Looking for a new approach to exchange crypto derivatives? Check out our FTX review!
Collateral reserves are also steady, all fully locked in the blockchain via smart contract technology.
User experience is another highlight of the platform, as it offers 24/7 support, with no downtimes and a remarkable intuitive interface. A crypto trader/investor just needs to connect his wallet and enjoy it, as it provides a smooth on-chain experience.
The project is yet to launch the first ETH-PERP trading, in late June 2020.
Looking for other user-friendly DEXs? Read our DeversiFi review!
Dig Into It
The platform wasn’t built on the Mai protocol for anything, as well. This specific protocol is known for reducing the complexity associated with trading decentralized perpetual contracts. Usually, it would require many steps for users, but MCDEX managed to eliminate the necessity for extra effort, turning the process seamlessly to make it more attractive for potential users.
The platform has plans to launch an exclusive native token, called MCB. The initial distribution of the tokens would be divided like 25% for founding team/early investors, 25% for the MCDEX foundation for each token sale (mostly to cover expenses such as audits, marketing, etc.) and 50% for incentivizing users with a limit of up to 5% yearly.
One of the very few decentralized finance projects located in China, the idea was co-founded by software engineers Liu Jie and Zhu Tianchi.
Everybody Hates Fees
Fees vary between the two types of contracts available so far, MP Futures and Perpetual contracts.
MP Futures have no expiration date, where the leverage is set by a fully collateralized margin system with no margin calls. Perpetual contracts, on the other hand, are contracts but without an expiry date.
Fees for MP Futures are low, so makers have to pay 0.02%, while takers pay 0.07%.
Perpetual contracts associated fees vary as the user can choose between trading with the order book, trading directly with AMM, or even trade using the two summed.
Register on Phemex to gain access to one of the most trustworthy crypto derivatives trading platforms!
There are no fees associated with withdrawals or deposits in the platform, but users are responsible for the gas costs concerning both transactions.
The only subject to higher fees is liquidations, as its’ surplus will automatically be deposited into the insurance fund.
What Is The General Impact Of The MCDEX Platform?
MCDEX represents a lot of effort from the team behind the idea, as the version coming soon is a direct result of overtime experience and battle-tested concepts amid many DeFi projects.
The platform has already planned to launch other trading services, such as structured trading funds for several risk preferences. The goal is to create opportunities for traders to expose themselves to a vast range of trading strategies, always looking to maximize profits across potential deals.
Conclusion
The MCDEX (Monte Carlo Decentralized Exchange) is a decentralized derivatives exchange platform, that aims to enable efficient and transparent trading with leverages.
The first of its kind to unite AMM technology and off-chain order books, it is focused on trading performance and high-level user experience. Despite their young age of the founding duo, it has shown the potential to be a milestone for the decentralized derivatives niche.
MCDEX is set to launch ETH-PERP trading on June 29 this year (2020), with an intuitive interface to benefit everybody ranging from novice users to advanced traders.