WHAT IS OPENLEVERAGE
OpenLeverage is a permissionless margin trading protocol which helps traders or other applications to be long or short on any trading pair on DEXs efficiently and securely. OpenLeverage is majorly aimed at building a decentralized crypto securities service to both retail and institutional clients, providing decentralized lending, derivatives trading and asset management infrastructure, which also integrates with global DeFi ecosystem.
How OpenLeverage Works
Decentralized Margin Trading
Margin trading is a method of trading assets using funds provided by a third party. When compared to regular trading accounts, margin accounts allow traders to access greater sums of capital, allowing them to leverage their positions. Essentially, margin trading amplifies trading results so that traders are able to realize larger profits on successful trades.
In centralized crypto markets, the borrowed funds are usually provided by an intermediate, for example, centralized exchange or broker. In a decentralized cryptocurrency trading environment, however, funds are often provided by other anonymous users, who earn interest based on market demand for margin funds. Borrowers and trades will be anonymous but transparent and align with the rules defined in smart contracts. All funds are held in smart contracts until all conditions are met to close the trading and lending positions accordingly.
Two Separate Pools Created For Each Pair
Anyone can create a lending market for a specific pair, which is composed of two separated lending pools. As an example, someone might be interested in doing leverage trading on the FEI/USDC pair, so they create two lending pools for the FEI/USDC pair of Uniswap:
FEI → USDC Pool, where lender supply FEI to be borrowed to buy USDC only
USDC → USDC Pool, where lender supply USDC to be borrowed to buy FEI only
Margin Trading with Liquidity on DEX, connecting traders to trade with the most liquid decentralized markets like Uniswap, Pancakeswap, and more
Risk Calculation with Real-time AMM Price, calculating collateral ratio with real-time AMM price for any pair available from a DEX.
2 Phases Liquidation, forcing liquidation to be completed in two different transactions to avoid flash loan attacks and cascading liquidation events.
LToken, an interest rate bearing token for each lending pool, allowing tokenomics integration with projects.
Risk Isolation Lending Pools, having two separated pools for each pair, and different risk and interest rate parameters for each pool, allowing lenders to invest according to the risk-reward ratio.
OLE Token, the governance token, mint by protocol usage, allows holders to vote, stake to get rewards and protocol privileges.Very intuitive and user-friendly UI designed for decentralized margin trading
The mission of OpenLeverage Protocol is to create an entirely permissionless decentralized margin trading infrastructure. Therefore no permission are necessary to create a margin trading market for any pair, with isolated and market-adjusted risk controls.
For longer term, OpenLeverage aims to build an decentralized crypto securities service to both retail and institutional clients, providing decentralized lending, derivatives trading and asset management infrastructure, which also integrates with global DeFi ecosystem.
We believe that the transition to a native financial layer on the internet is an important step for humanity. It is free, frictionless, and not controlled by anyone.
Before the mainnet launch, you can use our dApp on Kovan testnet to explore the OpenLeverage protocol capabilities:
- Margin Trade: https://kovan.openleverage.finance/app/trade
- Lend to Earn: https://kovan.openleverage.finance/app/lend
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