There are actually two types of cryptocurrency exchanges that would-be and regular cryptocurrency investors would have to choose from. The decentralized and centralized exchange. The centralized exchanges are referred to as centralized because they have an authority system. For transactions to be verified, a central authority must be informed or notified. The decentralized exchanges, on one hand, happen to be a more secure exchange. They do not have any central authority. Although they have been proven to be secure, they still face certain issues. These exchanges have two big issues that plague their global adoption. These issues are;
• Low liquidity and
• large spreads.
Low liquidity basically means that there is a low volume or number is buyers and sellers. This results or gives way to worse prices or even difficulty filling large orders. While large spreads, on the other hand, are caused by asks and bids, thus increasing the cost of entering and existing positions.
The bZX platform seeks to solve these two major issues of decentralized exchanges. It does this by bridging decentralized and centralized liquidity pools with the help of tokenized margin loans. With the liquidity margin of the bZX platform, users are granted access to the entire margin lending market. This further translates tighter spreads and less slippage.
The bZX platform is basically a blockchain based platform that is capable of powering margin trading which can be built into an exchange. On this platform, users can take loans and pay back with interest.
• Minimal risks; irrespective of who you are on the bZX platform, you have total control of your keys. This means that you do not have to worry about any form of attack or theft.
• Passive income; the bZX platform could also be a passive income for you. You could make huge amounts of money without giving out control of the funds that are stored in your wallet.
• Reduced fees; unlike the other centralized exchanges that charge high transaction fees which at times eats up the profits of traders, the bZX platform's margin trading makes the transaction fees as low as possible.
On the bZX platform, there are three types of positions users can take;
1. The long position; on this platform, taking a long position means the swapping of one asset for another. To explain better, you could decide to swap DAI token for either ETH or BTC because you feel that the ETH or BTC token would appreciate in value faster than the DAI token.
2. Short position; this is a complicated position to stand on. It means that you bet that something would depreciate in value in the coming months or years.
3. Leveraged position; this position is similar to the short position and it means that users are able to borrow money than they have or own.
On the exchange, the BZRX token is the native cryptocurrency which is used to make payments on the platform. On the network, the token holders would have to decide how the bZX protocol is upgraded.
The bZX platform seeks to provide a platform where users are able to take loans. One of the most important benefits of this platform is that it creates passive income for users. They are able to gain interests on funds that are lent.
Written by tibo
