Empowering Traders: Unveiling Marginly's Protocol Advantages
In the ever-evolving landscape of decentralized finance (DeFi), Marginly emerges as a strong contender offering a plethora of features and advantages that set it apart from traditional margin trading protocols. By integrating innovative mechanisms and leveraging cutting-edge technologies, Marginly delivers a comprehensive solution for traders seeking efficient, secure, and flexible margin trading experiences.
Security and risk management features
Deleveraging Mechanism
At the core of Marginly's robust framework lies a sophisticated deleveraging mechanism that adjusts interest rates in accordance with market volatility. The deleveraging process reduces the total leverage of the pool, encompassing collateral and debt, in scenarios where liquidity becomes scarce. By implementing this innovative approach, Marginly refrains from selling assets the pool doesn't possess and instead closes users' positions against the opposing side, ensuring a more stable and adaptive risk management strategy. This approach ensures that traders pay an appropriate premium for the inherent risks associated with heightened market fluctuations, thereby fostering a more balanced and equitable trading environment.
Insurance Pool
Marginly incorporates an insurance pool as a vital safety net, serving as a liquidity reserve to mitigate potential protocol losses stemming from insolvency scenarios. Factors such as market panics, network congestion, and liquidity depletion are taken into account, providing traders with added reassurance and protection against adverse market conditions.
Shutdown Mode
In the event of system insolvency, Marginly introduces a unique shutdown mode, halting new position openings and placing the onus on the opposing side to restore solvency at their own expense. This proactive measure enhances the protocol's resilience and safeguards the interests of all participants during challenging circumstances.
Trading Features
Trade Router
Facilitating seamless trade execution, Marginly incorporates a smart trade router that establishes a direct link between system pools and external AMM DEXs. Leveraging an off-chain route planner to compute optimal trade routes, the protocol enables efficient on-chain posting of proposed trading parameters, thereby streamlining the trading process for enhanced efficiency and transparency of leverage trading on Arbitrum.
Asset Swaps
Marginly not only allows to trade leverage Arbitrum but to swap any asset for any other asset quickly and cheaply. Marginly empowers users with the ability to seamlessly swap between a diverse array of assets using the trading pairs available on connected DEXs. This versatile functionality opens up new opportunities for traders to capitalize on market dynamics and diversify their portfolios with ease.
Currently, Marginly supports routing to most major Arbitrum DEXs:
- Uniswap
- TraderJoe
- Camelot
- Ramses
- Balancer
- Sushi Swap
- DODO
- QuickSwap
Isolated Liquidity Pools
Through the implementation of isolated liquidity pools, Marginly introduces a dynamic ecosystem where leverage liquidity, user margins, and trade proceeds are securely locked. Each pool encompasses a base asset and a quote asset, forming a symbiotic linkage with corresponding trading pairs on affiliated AMMs. This innovative structure enables the borrowing of user margins and trade proceeds, fostering a balanced ecosystem where interests are reciprocated between longs and shorts.
Oracle-Less Design
Marginly's forward-thinking approach eschews centralized oracle systems in favor of leveraging Uniswap v3 TWAP oracle, ensuring a more robust and decentralized foundation for acquiring crucial market data. By embracing this oracle-less design, the protocol enhances its resilience and independence from single points of failure, bolstering its overall security and reliability. Uniswap itself may be susceptible to periodic liquidity drains, especially during market turmoil, so Marginly aims to introduce order routing to several liquid venues for the next versions of the protocol. This will allow for the use of aggregates or averages from several sources.
Fair Funding Costs and Interest Rates
In its pursuit of fairness and transparency, Marginly implements a risk-based loan pricing model that accounts for leverage, underlying margin volatility, and liquidity risk based on the depth of respective AMM pools. By incorporating these factors into its pricing strategy, the protocol fosters a more equitable and responsive environment for traders, aligning funding costs with actual risk exposure.
Marginly incorporates volatility into interest rate calculations, ensuring that traders pay a commensurate amount for risk during periods of heightened market volatility. The governance dashboard enables real-time monitoring of volatility, empowering participants to make informed decisions by adjusting the interest rate parameter on-chain to reflect prevailing market conditions.
Marginly represents a paradigm shift in the realm of DeFi margin trading, redefining industry standards with its innovative features and advantages. By prioritizing security, fairness, and efficiency, Marginly sets a new benchmark for decentralized margin trading platforms, empowering traders with the tools and safeguards needed to thrive in an ever-changing market landscape.
