Webp.net-resizeimage (7).png

Cryptocurrency traders can still trade even if they have a limited amount of crypto coins to trade with. This is possible using the margin trade option on trading exchanges. The margin trade option allows the trader to borrow funds to trade by adding leverage to the trader’s investment. The trader’s trade fund increases without actually holding the cryptocurrencies. Margin trading allows the trader to open his margin position with the leverage lend to him from the lending market. The lending market could be the exchange where the trade is executed or from other traders on the exchange.

Lenders from the lending market make interest on funds they loan out to borrowers that collect from them. There is the risk of default by the borrower which might cause a loss of funds to the investor. Margin trading involves moving liquidity to a centralize exchange which exposes the lender to counterparty risk from the exchange and the borrower. The BZX application is built to resolve this kind of risk relating to margin trade.

What is BZx Network?

BZx network is not an exchange platform but a protocol that is built on the Ethereum technology. The BZx protocol is connected to existing trading exchanges in other to offer a decentralized margin lending and funding services. It can also be accessed through the BZx portal. It is the first decentralized protocol created to offer a peer-2-peer margin funding and trading on the blockchain technology.

How it Works.

The trader set up the coins he wants to borrow or lend on the BZx protocol application or through relay integrated on trading exchanges. The marker creates an order via the DApp of the protocol and the order is signed with the makers' private key to ensure that it cannot be changed. The order is then displayed through an arbitrary medium like emails, text or morse code. The taker receives the order and accepts after verifying the collateral token, the type of token and amount to be borrowed. This process goes through two layers on the application which is the protocol and oracle layer.
The protocol layer presents to the application smart contract the order from the taker and the maker. It is passed to the escrow that holds the lender’s funds which assess and pass it to the logic smart contract that will disburse the fund and interest.
The Oracle layer uses its on-chain decentralized exchange (DEX) to provide price feeds and liquidity and uses the off chain trader to monitor the solvency of margin accounts. The gatekeeper smart contract uses the DEX to make sure that only honest traders initiate the transaction. The oracle layer monitors the health of margin account and liquidates trade when they fall outside the margin required. A guarantee fund is made available to pay out in case of lender losses his money which is not a frequent occurrence.

Webp.net-resizeimage (1).png

The Token

The token BZRX is the token that is used as a means of payment on the BZx protocol. The token is also used for governance on the protocol.
Sugar token with symbol SUGR is a redeemable token obtained on the BZx protocol for bzxoracle reserve. Traders receive the token as a compensation for their taker and gas fees and bounty hunters receive the token as the reward for their bounty effort.