Margin Trade

Introduction to Margin Trade
What is Margin Trade
Margin Trade is a leveraged trading product allowing users to up to 5x leverage long short on ETH via spot token borrowing.
Problem background
Traders want to go leveraged long or short on ETH and BTC. Current Derivatives DEX solutions suffer from the following issues:
  • Liquidity providers
    • “Counterpartying” user trades. There is always a winner and loser between traders and liquidity providers.
    • Have high risk exposure, and require favourable conditions or incentives to account for the risk.
  • Traders
    • Quality of user trades are limited by the “depth” of the liquidity of the platform. If there is not enough liquidity the users will get bad pricing on their trades.
    • Traders could be auto-deleveraged or settled if they are winning too much.
    • Most Derivatives DEX are built on Layer2’s which can be a barrier for traders who want to trade immediately.
  • DEX issues:
    • High gas fees minimize traders profit (L1)
    • Slow execution speed
  • CEX issues:
    • Sharing identity on CEXes is a blocker for some traders