KuCoin AMA With OpenLeverage (OLE) — A Truly Permissionless DeFi Margin Trading Market
Dear KuCoin Users,
Time: July 6, 2022, 10:00 AM - 11:06 AM (UTC)
OpenLeverage is a permissionless lending and margin trading protocol with aggregated DEX liquidity, enabling traders to long or short any trading pair on DEXs efficiently and securely. Anyone can create lending pools to support margin trading for specific token pairs with liquidity pools on DEXs. OpenLeverage is currently deployed on Ethereum, the BNB chain and KCC. Important milestones include crossing $680 million in trading volume and $13 million in TVL. OpenLeverage is incubated by Binance Labs and Creative Destruction Lab. We have received security audits from PeckShield, Code4Rena and CertiK.
Official Website: https://openleverage.finance/
Jackie — Co-founder of OpenLeverage
As a serial fintech entrepreneur, Jackie is a product and technical specialist with a decade of experience in derivatives trading, risk management, and blockchain-based financial system design. He previously worked in Goldman Sachs on quantitative asset management and FX derivatives electronic trading, then joined HSBC in the equity derivatives space for the Asia market. He holds a Master's Degree in Computer Science from The University of Manchester, UK.
Q&A from KuCoin
Q: Can you tell us where the idea of OpenLeverage comes from? What problems does OpenLeverage solve that existing competitors haven't and what are the key design elements?
Jackie: It's very exciting when we look at the DeFi market driven by the growth of decentralized exchanges, in which permissionless plays a crucial role.
Existing centralized exchanges and decentralized protocols are permissioned markets with substantial entry barriers and are costly, providing only minimal pairs and market depth.
Regarding decentralized exchanges, many pairs have appeared with promising liquidity and volume. It has been observed as a fast-growing and long-tail market that a permissioned structure wouldn't serve.
Compared to other leveraged trading protocols that provide 20-30 mainstream pairs supported by a traditional order book model, we aim to support thousands of pairs across many DEXs and blockchains and help projects and DEXs improve volume and liquidity by providing lending and margin trading support.
Users and projects can create lending pools with a single on-chain transaction to support margin trading from day one of launch, which is not currently possible on other platforms, enabling open integration with other DeFi projects technically and through their tokenomics
Q: Could you also give our community some recent updates on OpenLeverage?
Jackie: OpenLeverage launched on Ethereum in December 2021, onto the BNB Chain in February 2022, and KuCoin Community Chain in April. Since our mainnet launch, protocol adoption has been growing tremendously. We have surpassed milestones of more than $13.5 million TVL and over $695 million in trading volume in 299 markets created, with more than 26 thousand unique addresses.
We’ve placed second in the KCC Unicorn Contest as Epic Unicorn winners. You can check it out here.
We’ve been selected to participate in Binance’s MVB IV Incubation Program. You can check it out here.
We have just recently received a strategic investment from Crypto.com Capital. You can check it out here.
Most importantly, OpenLeverage has received a strategic investment from Binance Labs. You can check it out here.
We’ve instituted two community-based programs – our Clans Clash Invitation and Referral Program – to reward community members. You can generate a referral link to invite your friends to join and trade, and you can get 25% of the reward your friends earn. Check it out here.
Q: Can you give an overview of your Tokenomics and the utility of the OpenLeverage token?
Jackie: We have a dual-token tokenomics design.
$OLE is the native token that incentivizes protocol usage such as trading, lending, referring new members, and participating in Clans Clash. Holders of $OLE tokens are encouraged to lock $OLE into time-weighted vote escrow in exchange for the xOLE token.
xOLE represents the governance token for OpenLeverage. Users receive xOLE as a receipt for providing OLE-BUSD liquidity on a designated partner DEX and subsequently staking their LP tokens on OpenLeverage into a time-escrowed contract.
Users may elect to lock their LP tokens for a minimum period of two weeks up to four years. Users who lock for the maximum duration (4 years) will receive 436% xOLE compared to those who lock for the minimal duration (2 weeks), similar to the Curve vote-escrowed model.
You can check out our tokenomics here.
Q: There are many margin trading protocols. So why should people choose OpenLeverage? What are your advantages over other protocols for those who want to trade on DEX?
Jackie: Many protocols are running Offchain and Oracle, so they can only support minimal sets of trading pairs for the market, where there are hundreds and thousands of trading pairs on different DEXs. OpenLeverage is trading on DEXs on different chains.
Their max might be 30-40, even 100 trading pairs.
We’re competing in different segments. We’re not competing with them as we are contributing to a segment of the market that’s not satisfied and has unmet needs.
Q: What are the main features of OpenLeverage? I saw that there are two main features: Margin Trade and Lending. Can you explain more about these features?
Jackie: There are quite a few. I’ll highlight just some of the key features of OpenLeverage:
● Margin Trading with Liquidity on DEXs, connecting traders to trade with the most liquid decentralized markets like Uniswap, PancakeSwap, SushiSwap, and more.
● Risk Isolation Lending Pools, having two separated pools for each pair, and different risk and interest rate parameters, allow lenders to invest according to the risk-reward ratio.
● Risk Calculation with Real-time AMM Price, calculating collateral ratio with real-time AMM price for any pair available from a DEX.
● OnDemand Oracle uses TWAP prices provided by the DEX to detect price manipulation and force price updates to make it valid for trading and liquidation.
● LToken is an interest rate-bearing token for each lending pool, allowing the third party to incentivize their community to provide liquidity into the lending pools to support margin trading for their token pairs.
● OLE Token is the protocol native token, minted by protocol usage and staked to get rewards and protocol privileges.
● Very intuitive and user-friendly UI
I’ll go over the process and explain the Lending and Margin Trading features:
● Any account with an address on our supported chain can create a new trading pair between the tokens. The trading pair must be the same pair that already exists on DEXs.
● If the pair has not yet been found, the creator needs to first create the pair on DEX before creating the market;
● Anyone can create lending pools for any trading pair available on a DEX, with default interest rate and risk parameters, which the community can change via the governance process when we launch the OpenLeverage DAO.
● Lenders can earn yields by depositing assets into the lending pools, earning interest from borrowed assets, and receiving OLE rewards.
● Traders can borrow and trade, all with one click in a single transaction;
● Projects can integrate with the OpenLeverage protocol to facilitate leverage trading on specific trading pairs by integrating LToken;
● Liquidators can trigger liquidations to earn rewards based on gas prices if the trade’s collateral ratio falls below the market limit.
Q: Security is obviously an important issue in DeFi, and some users might also feel that some projects don't really care about their users' funds. How safe is OpenLeverage?
Jackie: Security has been paramount throughout our product and technical design.
It's always a challenge to be completely open and safe at the same time. So we finely define the boundary of risk, liquidity, and trading flow to simultaneously have an open, safe, and optimal user experience.
We follow secure development best practices throughout OpenLeverage's development. Our security review process includes a full-length audit from Certik and Peckshield. Check it out.
We partnered with Code4rena for a 1-week audit contest to fine-tune security settings and gas optimization. Read more.
Free-Ask from KuCoin Community
Q: Do the token holders have the right to participate in the governance of the project? What kind of decisions can they vote on about the project?
Jackie: We have a dual-token tokenomics design: $OLE is the native token that incentivizes protocol usage such as lending, trading, facilitating liquidations, and staking. Holders of $OLE tokens are encouraged to lock $OLE into time-weighted vote escrow in exchange for xOLE tokens.
xOLE holders have the power to vote or submit proposals in the OpenLeverage DAO governance process, boost earnings on incentivized lending pools, and have discounted fees on margin trades.
Read more here.
OLE tokens are also making their debut at KuCoin's World Premiere. Check it out.
Q: So many projects just like to speak about the "long-term vision and mission," but OpenLeverage, what are your short-term objectives? What are you focusing on right now?
Jackie OpenLeverage will continue executing our multi-chain strategy to deploy on Avalanche, Polygon, Fantom, and many other EVM-compatible chains, connecting to decentralized exchanges like Uniswap, SushiSwap, PancakeSwap, MojitoSwap, and more, supporting thousands of pairs out there.
We will also extend our product offering, such as limit orders for spot and margin trading, to support any pair on DEX and EVM compatible chains.
Q: Can you tell us about your team members? Are they qualified and professional in their fields? What are the recruiting qualifications for team members for your extraordinary project?
Jackie The founding team came from traditional finance and crypto backgrounds. They are experienced entrepreneurs and specialists with many years of experience in derivatives trading, risk management, and blockchain-based financial systems. They have worked with major institutions, including HSBC, Goldman Sachs, and Louis Dreyfus.
Q: A partnership is always an important factor for every project. So who is your partner? What are the benefits you get from those relationships?
Jackie: We’ve been involved with many partnerships that mutually benefit our project while helping our partners.
There’s been a lot of integration with DEXs, and partnerships with Uniswap, SushiSwap, PancakeSwap, BabySwap, Biswap, and MojitoSwap have been established.
We’ve been integrating with different projects so OpenLeverage can be used directly in our partner’s interface - Huobi Wallet, Coinbase Wallet, Coin98 Wallet, BitKeep, and ONTO wallet.
Other key projects we’re working with: InfinityPAD, Solv Protocol, Berry Data, FLOKI, and Fuse Network.
Overall, we’ve had a number of successes with our strong partnerships and hope to add more to grow and strengthen our ecosystem.
Q: Can you list 1-3 killer features of this project that makes it ahead of its competitors? What competitive advantage does your project have that you feel most confident in?
Jackie: These are some features that make OpenLeverage the most scalable margin trading protocol:
1. Anyone can create lending pools for any trading pair available on a DEX, with default interest rate and risk parameters, which the community can change via the governance process;
2. Lenders can earn higher yields by depositing assets into the lending pools, earning interest from borrowed assets, receiving OLE rewards, or receiving rewards by re-staking their LTokens to join other projects’ reward programs;
3. Traders can borrow and trade all with one click in a single transaction;
4. Projects can integrate with the OpenLeverage protocol to facilitate leverage trading on specific trading pairs by integrating LToken;
5. Liquidators can trigger liquidations to earn rewards based on gas prices if the trade’s collateral ratio falls below the market limit.
Q: Marketing is a central element of every project, so everyone knows the potential a project can bring is vital to achieving the goals set. So what is your strategy to attract new users and investors to your platform and keep them long-term?
Jackie: OpenLeverage is always on the lookout for experienced Growth Hackers and specialists in content marketing within different communities. Although our Ambassador program is temporarily closed, please make sure you follow our Twitter account to stay informed.
Q: Smart contracts are prone to failure, and many projects fall victim to it, costing user funds and discrediting projects. How reliable and secure are your smart contracts? Did you test it with either party?
Jackie: We followed secure development best practices throughout its development. In addition, our security review process includes a full-length audit from Certik and Peckshield.
We partnered with Code4rena for a 1-week audit contest to fine-tune security settings and gas optimization.
Regarding unforeseeable circumstances, 33.33% of fees are deposited into the isolated insurance fund to cover unexpected losses to the lender.
KuCoin and OpenLeverage have prepared a total of 2,000 USDT to give away to AMA participants.
1. Free-ask section: 75 USDT
2. AMA activity: 1,925 USDT
Quiz: 1,500 USDT
Price Guess: 300 USDT
Participation Rewards: 125 USDT
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