Decentralized brokerage protocol aims to unite DEXs and lending into a new TradeFi ecosystem
DeFi (decentralized finance) lending has proven its case. Eliminating the middleman in this type of financial transaction can be done, and done in a way that benefits both transacting parties. In practice, this means lenders can bypass the bank and increase their earnings, and borrowers can gain access to the funds they need, even if they don’t meet the criteria of the middleman. However, the industry is still young and requires additional applications before it is entirely competitive with traditional offerings available to the consumer today.
The fact is that the world is becoming increasingly overcome with tokenization, and the industry is already preparing for a future where more assets have a digital counterpart. Therefore, it is only a matter of time before trading itself becomes largely decentralized. Consequently, use cases such as margin (or leveraged) trading, common in traditional finance, need a decentralized counterpart.
In margin trading, debt (or borrowing assets) can be used by an investor to execute larger trades. With this type of investment, some level of customer protection is necessary to protect the lender. Since blockchain technology is anonymous, the same level of knowing your customer is not maintained.
Defining the solution looks at a lender’s ability to provide liquidity and a trader’s capability to use the platform to open leveraged trading positions. To make this a reality, Primex Finance has defined a solution for dynamic risk profiling based on the on-chain historic trading data that allows lenders to provide liquidity and traders to use it in margin trading positions.
To provide users with the optimal solution, the protocol looks to several key features to differentiate itself from current
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