Sep-29 AMA Recap
Rachel: Ok, ladies and gents, today we have Jackie, the Founder of OpenLeverage!
Jackie: Hi guys, nice to meet at here.
Segment 1 Introduce OpenLeverage & Testnet V2
Rachel: Great, before we kick in, could you please introduce yourself to our community Jackie.
Jackie: I am Jackie, co-founder and CTO of OpenLeverage. I am a serial fintech entrepreneur and have 12 ys+ of experience in derivatives trading, risk management, and blockchain-based financial system design. I previously worked in Goldman Sachs on quantitative asset management and FX derivatives electronic trading, then joined HSBC in the equity derivatives space. Before OpenLeverage, I founded a fintech company building a blockchain-based fintech solution for banks and enterprises. I graduated with a Master’s Degree in Computer Science from The University of Manchester, UK.
Rachel: It’s really a great honor to have you here with us to explain our project. So let’s get things started then.
Rachel: Could you please introduce our project to the community?
Jackie: In short, OpenLeverage is a permissionless margin trading protocol with aggregated DEX Liquidity, enabling traders to be long or short any trading pair on DEXs efficiently and securely.
In the coming few days, we are releasing a new version of testnet on Kovan.
The new version of testnet on Kovan allows you to create margin trading pairs connecting to the pool either on Uniswap V2 or V3. It automatically chooses the pool with the best liquidity to mitigate the liquidity risk during margin trading.
We introduced the OnDemand Oracle, a TWAP based protection mechanism to protect users’ positions from price manipulation and flash loan attacks. Put, when the price of a pair becomes highly volatile, the Time-Weighted-Average-Price (TWAP) will force the attacker to hold the price for some time to make the TWAP valid for trading. (https://docs.openleverage.finance/main/protocol-overview/ondemand-oracle)
For lenders to understand the market they are getting into, we add a “Market Risk” section which illustrates DEX’s market volatility, trading activities, and liquidity’s stability over the past 45 days.
We also introduced a 3% liquidation penalty for the trader, a reward to the liquidator, to further incentivize the community to facilitate the liquidation process.
Rachel: So for everyone here, make sure to go test our TESTNET V2!
Segment 2 Community Questions.
- Can you in one sentence define what is #Openleverage?
Again but from another angle, OpenLeverage is a permissionless money market designed for margin trading, with an open technical and economic structure integrating with the global DeFi ecosystem.
2. I found that there have been a lot of leveraged trading project platforms. As a loyal fan of OpenLeverage, I want to know what the core competitiveness of our project is?
Imagine creating any margin trading market like creating a pair on Uniswap. That’s what we are building. I think that’s unique in the current market, and something the communities have been waiting for. To achieve that, we put together a protocol design with:
- Risk isolated lending pools to segregate risk between volatile markets;
- Risk calculation with a TWAP based OnDemand price oracle to protect our users from price manipulation;
- LToken to allow the third-party projects to incentive their community to provide lending liquidity;
- Tokenomics to incentive protocol usages and governance.
- Very intuitive and user-friendly UI for the community to understand the market and their position.
3. After creating a margin trading pair, how can I start inviting liquidity to the lending pools, to commence margin trading?
LToken is an economic hook to other projects, like Compound C-Token and Uniswap LP token. LTokens are interest-bearing tokens and the primary means of interacting with the OpenLeverage lending pools. If you are a project owner, you can build an incentive program, e.g., yield farms, on the LToken issued by the specific lending pool.
4. If the margin falls below the minimum level and the position will be liquidated, can I borrow or repay a liquidation margin?
When a position is underwater, you can maintain it by adding collateral to bring its collateral ratio back to a healthy state to avoid liquidation.
5. What are the incentive plans structured to compensate and encourage lenders in the lending market on this protocol?
There will be three layers of reward to encourage lenders:
1/ Higher yield of interest, compared to lending in the mainstream money markets.
2/ After the OLE token launch, lenders in incentivized markets will receive OLE tokens as a reward. Which market to incentivize as a liquidity mining program is a governance decision to make.
3/ Reward by re-stacking LToken to third-party incentives programs.
6. Adding transaction currency pairs requires official review on other platforms, Is it the same with adding trading currency pairs to OpenLeverage? If not, does that mean that OpenLeverage is the real decentralized leveraged trading platform?
OpenLeverage supports market creations without any permission or review. Once the OLE token and DAO-based governance are launched later, all the interests, risks, and incentives parameters are entirely governed by the community.
8 & 9 Next Will the economic model and DAO model be announced in this AMA? How to govern is a complex issue & The function of OpenLeverage #OLE token?
This is the most asked question.
Firstly I need to highlight that there’s no $OLE token sale, and the $OLE also will NOT be launched with the mainnet and will be separately launched later.
OLE is the native token that facilitates governance and incentivizes usage of the OpenLeverage protocol. Users can mine OLE through borrowing/trading, lending, liquidating positions, farming. Holders of OLE tokens are encouraged to lock OLE in exchange into time-weighted vote escrowed token xOLE, which represents voting rights, eligible to share generated fees, and have other protocol privileges.We will provide full details of the tokenomics before the OLE token launch. Please stay tuned for further announcements.
10. Security & User Interface are the Most Important Aspect that Users see on a platform. How has OPENLEVERAGE worked on this? Is Platform suitable for Newbies in the crypto world?
We believe security is the most important thing for our community and followed secure development best practices throughout its development. Our security review process included: A full-length audit from Certik Another comprehensive audit by Peckshield is underway. A completed automate test suite, including automated tests with Truffle.
Segment 3 Live Q&A
1. How can OpenLeverage differ from other decentralized margin trade platforms like DYDX?
OpenLeverege aims to support margin trading for tokens natively trading on DEX, which are fast growing and long-tailed market. Imagine a token with huge community support and OpenLeverage allows the community to speculate or hedge risk with permissinoless margin trade from day 1. DYDX V2 is a perpetual swap protocol running with separated order book and oracle from the spot market. It’s more likely to support mainstream pairs.
2. In the testnet, there is only UniSwaps’ liquidity. What will Openleverage add more other liquidity sources in the future?
Yep, we will be supporting more liquidity sources in the future to trade with more pairs, and find the best price and fees in later releases.
3. One of USPs (Unique Selling Points) is: 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. if I am an user, I am so confuse when there are so many trading pairs. I will be out of control. What do you think about this problem?
That’s why we put together a Market Risk section on each lending pool to allow users to understand or filter the markets they want to participate in. In future release, we are also building a Smart Vault that automatically invests funds to lending pools according to the risk tiering to improve capital efficiency.
4. One of the most important things that make lending/borrowing protocol successful is the interest rate. What would OpenLeverage do to keep the interest rate higher than other projects?
Each pool has a kinked interest model that defines interest rates based on supply and demand. Following Compound’s design, interest rates should increase as a function of demand; when demand is low, interest rates should be low, and vise versa when demand is high. Interest parameters are isolated from each pool and can be adjusted by governance processes to keep the interest rate competitive from the market.
5. Why choose OLE instead of trading on cex?
If you compare the top 200 pairs of Uniswap and CEX, you should see the difference between pairs supported.
6. Technically speaking, what are the restrictions you considered effective and have implemented or will implement into the design template of the protocol, as it helps to avoid flash loan attacks?
We made decision not to rely on ChainLink Oracle to allow us to build a truly permissionless market. TWAP on Uniswap V2 and V3 is a good source of price that is very costly to manipulate over time. So we built OnDemand Oracle based on TWAP of Uniswap to facilitate risk calculation on OpenLeverage to avoid price attacks.
7. What I care about is the talent structure after openleverage launched, in which direction to attract talents?
We are a dedicated global team with experience in financial derivatives trading, blockchain development, and marketing. We are hiring experienced blockchain developers to join our team and extend our protocol. Comp includes competitive fiat and token package. PM me if you are interested.
8. Are you considering partnering with Arbitrum and Optimism in the maximization of the usecases of $OLE? as that takes care of high transaction costs on Ethereum blockchain?
Arbitrum deployment is an important milestone in our role map. Transaction cost is important element in user experience, we will work with other L2 or sidechains projects to provide OpenLeverage to wider user as soon as we can.
9. What to do if a token is lack of liquidity since openleverage aims on long-tail market?
Market participants should always know the market they are entering to. On a permissionless market like Uniswap, you should understand what is fundamental behind the token you are buying into, so you are exposed to counterparty risk, liquidity risk and market risk. These risks do not go away when comes to margin trading. We will do our best to provide stats on the market to allow participants to understand the risk and reward.
10.When using Margin Trading, users pay a daily fee or a one-time fee at the time of transaction?
Traders pay trading fees on both open and close trade, and variable interest rate based on the borrowed amount and time the position holds for.
