OpSwap, an early member of Arbitrum the exploration of derivatives ecology
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In the first half year of 2020, DeFi began to erupt. On the positive side, DeFi's continued exponential development contributed to the continued prosperity of the decentralized world. On the negative side, Ethereum's own performance failed to match the huge volume of transactions. As the current major means of Ethereum's expansion, Layer2 seems to be fully able to meet the needs before the arrival of ETH2.0. And Vitalik Buterin, the founder of Ethereum, also said that Layer2 will be coexisting with launched ETH2.0 in the future
Currently in Layer2, there are different schemes such as state channel, Sidechain, Plasma, Optimistic Rollup, ZK Rollup, Vadium and so on. Arbitrum is also one of the Rollups created by the Offchain Labs team based on Optimistic Rollup technology. At present, the well-known DEX such as Uniswap V3 and SusanSwap has passed community votes, and they said they will move to Arbitrum. While the Wallet sectors such as MetaMask, MathWallet, Formatic, portis, WalletConnect and Burner Wallet are also among the first to support Arbitrum, which fully illustrates the industry's acceptance for the expansion model of Arbitum Layer2. Similarly, the emerging DEX OpSwap focused on derivatives will also test version based on the Arbitrum. And it is worth noting that OpSwap is one of the first teams to build projects on Arbitrum's main web beta.
This passage will help readers have a further understanding and knowledge of OpSwap.
OpSwap is a DEX positioning in the derivatives sector. In fact, from the DeFi sector as a whole, the layout of the derivatives sector is not a blank. Synthetix, a well-known synthetic asset agreement based on Ethereum, can now trade derivatives such as leveraged loans. But Synthetix is more of a zero-sum game between the user and the platform when it comes to derivatives trading, which means that a derivative investment is destined to be either a user's profit or the profit for Synthetix. Synthetix, meanwhile, assigns risk to other users, such as those who get leveraged bond assets through Synthetix and make a profit, which means the Synthetix platform will lose money and that the loss will be allocated to other users. In short, the decentralizaed derivatives such as Synthetix will allow investors to form a game of gambling with the platform, and many other investors will non-actively participate in it, which lacks of equity.
The derivatives sector. From a macro perspective, CEX is the main battlefield for the current derivatives trading. Presently, CEX is still on the top on trading volume and the playing methods, but the derivatives sector is more dependent on platform from the model. On one hand, there is safety problems on user fund such as the funds of the bankrupt users of the platform will be directly at risk of being difficult to withdraw. While on the reference of the derivatives sector, the platform of CEX will also have unfair phenomena such as disconnecting cable and platform downtime that influence users.
OpSwap's derivatives model borrowed idea from AMM's spot model, which avoids a direct bet between users and the platform when making derivatives trading. In the past, the AMM model has built two roles. One is ordinary traders, who mostly use DEX's services while trading in a platform-based pool of liquidity. The other is the liquidity provider, which injects money into the platform pool to help the pool increase liquidity and generate revenue.
OpSwap builds a contract flow pool that allows users to trade sustainable contracts based on the pool, while there are many contract liquidity providers on the other side. For example, when a user is on the contract that is 10 times leveraged based on OpSwap, the liquidity provider will exchange spot leveraged fund for traders and put it on the customer's margin. When the asset prices rise, investors can carry out arbitrage liquidations, whereas when the asset prices fall, investors will liquidate losses and loss part of the margin.
As a whole, OpSwap has built a hub, and both sides of the game are point-to-point, one-way relationships between liquidity providers and ordinary investors. This point-to-point cash margin model is fairer than Synthetix. OpSwap also avoids the evil of CEX from its source, both from the trading model and the account model. At the same time, it makes up the insufficient layout dilemma for the current DEX plate derivatives (Synthetix does not belong to the DEX category).
When users trade on OpSwap, they can quickly transfer assets from Layer1 to Layer2 on the Arbitrum-based bridge in OpSwap.
So first of all, Arbitrum gives OpSwap a very low-cost transaction-cost feature. The low-cost advantage of OpSwap is prominent compared to the DeFi protocol built on layer1. Arbitrum only submits the original transaction data to Ethereum, while execution and contract storage occur under the chain, which guarantees OpSwap's trading efficiency. After all, the expansion under the chain is theoretically limitless, so unlike Layer1, where transactions require constant contract interaction and online validation, Arbitrum-based OpSwap can achieve second-level trading, and OpSwap also has considerable advantages in trading experience.
OpSwap's own interface UI design is also different from the majority of DEX plate on the market. OpSwap is closer to CEX's UI and is relatively easy to see for all the functions on OpSwap.
Another bright spot for OpSwap is that its mining model is different from traditional DEX's fluid mining. It is also based on AMM model, but OpSwap supports single-currency mining. On the one hand, it can achieve efficient, low-cost operations based on Arbitrum, while single-coin mining can avoid unpaid loss caused by double-coin mining, thus further enhancing the user's income.
Recently, OpSwap is also about to launch a beta version of the network, as well as an award-winning test airdrop campaign.
Official network: Opswap. Io
WeCehat: cczzxxcc123
From the Arbitrum model itself, Arbitrum is built on Ethereum and uses the communication capability between L1 and L2 to transfer any form of Ethereum assets between the first and second floors without trust. It's worth noting that while Arbitrum's transaction is still done on Ethereum. But because Arbitrum only submits the original transaction data to Ethereum, execution and contract storage take place under the chain, Arbitrum's cost of GAS is very small compared to Ethereum's main network.
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