Recap of AMA with Marginswap
On the 1st of July 2021 @ 11AM ET, An AMA session with Marginswap Project Lead Dronoms and Technical Lead Gabriel was held in the Avalanche Official Telegram channel . Below we present to you an excerpt from AMA with questions and answers. It was wonderful and very informative, Enjoy reading :)
Nicolas | Avalanche
Welcome @Dronoms & @Olvidadorio !
Dronoms | Marginswap
Glad to be here and thanks for hosting us
Gabriel | Marginswap
Hi folks!
Nicolas | Avalanche
[In reply to Dronoms and Gabriel ]
My pleasure ! Before we dive into the questions, can you briefly introduce yourself to the Avalanche community, and share some background on your journey to found Marginswap?
Dronoms | Marginswap
Gabriel leads the tech team and he is a distributed systems engineer with over a decade of experience at a variety of Silicon Valley companies. He started out specializing in machine learning and distributed computing, and has been working with Solidity and trustless computing since early 2018.
I am the project lead for Marginswap and have a medical background. I have traded Forex and in the last 3 years intensively traded crypto. Before venturing into the crypto space mid 2017 I founded and managed several eCommerce businesses, which were relatively huge successes.
The move towards founding marginswap was more or less to cater for a need I personally had as crypto user and trader. There were tokens I wanted to trade with leverage and no cex listed them at the time
So I was like you know what, the liquidity exist on-chain and a lot of users and holders would love to lend out their stash. And here we are
Nicolas | Avalanche
Thank you for this introduction :)
Let’s start with the first question from Twitter. It comes from Eren12402427 and he is asking: What is the difference betweens Marginswap and other swaps? (Uniswap, Sushiswap etc..) Why people need to chose your swap , can you explain?
Dronoms | Marginswap
Thanks for the question Eren!
Marginswap is a decentralized trading protocol that natively supports spot trading and under-collateralized loans for leverage trading of tokens on AMMs like Uniswap and Pangolin. With Marginswap, traders can trade a wide variety of assets, like on any existing swap protocol but with leverage.
In the past, if a trader who prefers to use Uniswap, Pangolindex etc wanted to open a leverage position, they would have needed to open a binance or coinbase account, but now they can get the exact same swap experience on marginswap.
Nicolas | Avalanche
Second question is from FabAvie : Hi! marginswap Can you give 3 reasons why users and investors should choose your protocol? What are the benefits of your project might bring Avalanche in the long run? Thank you!
Dronoms | Marginswap
Great question FabAie! There are several reasons to use Marginswap, but I will try to keep it to 3
- Marginswap is decentralised, meaning you are not entrusting your asset to a single entity.
- Trader can access liquidity living on Pangolindex, Uniswap, Sushiswap, Quickswap and more from our interface.
- When you use Marginswap for leverage trading, you never have to worry about exit liquidity, because we tap into the billions of dollars worth of liquidity already existing on-chain.
Apart from marginswap being one of the first protocol of its kind on Avalanche, right now DeFi users on Avalanche can lend and borrow tokens on Marginswap, also trades on Marginswap are routed to Pangolin, meaning more trading volume on Pangolin and not to mention the increased on-chain activities on Avalanche.
Nicolas | Avalanche
Question 3 is asked by Fabian Rizalez : Exactly how does the loan process work for assets supported by MarginSwap, and what kind of security guarantees are there as a decentralized protocol?
Gabriel | Marginswap
On the Bond lending side of the app, users can deposit their idle tokens and earn interest from traders borrowing those assets for leverage trades. Interest rates are adjusted according to utilization, similar to CREAM or Compound. Currently the protocol will cover any liquidation losses, should they arise, with its funds. In the future, we hope to make it possible for lenders and traders to buy insurance from 3rd party protocols.
Nicolas | Avalanche
Question 4 comes from batuhanarslan_ : Why should we use MarginSwap? What kind of conveniences is it preparing to offer us, especially in cross-chain applications?
Dronoms | Marginswap
There are many reasons why you should use Marginswap, for example if you want to go long or short PNG, AVAX etc., borrow to Farm that juicy AVAX-PNG pool on Pangolin, or earn some passive income with your idle crypto assets. All this you can do on Marginswap.
I am personally actually supplying liquidity for the AVAX-PNG pool on pangolin using tokens borrowed from marginswap
So pretty cool :)
Nicolas | Avalanche
Nice !
Fifth question comes from Samet70092117:
1. Are you gonna accept any other tokens on your platform as deposit, except the ones you already have
2. Are you gonna up the leverage?
3. How does your liquidation process work
Dronoms | Marginswap
Yes we are going to add more tokens in the future. Right now the leverage is set to 3x, but we are considering increasing that to 5x soon and to learn about liquidation and running a liquidation system please read this https://docs.marginswap.exchange/what-can-i-do-on-marginswap/liquidation
Nicolas | Avalanche
Question 6 by MND_UA : What other tokens are planned for spot and cross margin trading besides $AVAX, $PNG, $WBTC, $ETH, and $USDT?
Dronoms | Marginswap
You can trade any tokens on Pangolin on Marginswap Spot, but the decision to list new tokens on cross margin is mainly influenced by the amount of available on-chain liquidity. Because Marginswap uses the liquidity on pangolin for trades, we are more likely to list tokens with deep liquidity on the dex.
Nicolas | Avalanche
Question 7 by dodoavax : Will marginswap be integrated into more networks?
Dronoms | Marginswap
Yes. Marginswap is currently live on 3 chains with the 4th chains coming within the next couple of days.
Nicolas | Avalanche
Question 8 comes from scientiaax : Could you give me more details about: cross margin trading and how can $MFI holders benefit from bond Lending?
Dronoms | Marginswap
In cross margin, your total account balance is factored in calculating the liquidation threshold. Meaning margin is shared across all open positions, not isolated to a single pair.
MFI holders receive the fees generated from lending and trading activities on the platform. Also, the token holders govern the protocol.
Nicolas | Avalanche
Question 9 by ss989989 :
Q: Q1) What steps are being taken to prevent any kind of scam/risk associated with leverage or borrowing or any other ?
Q2) what were the possible reason behind integrating with avalancheavax / pangolindex
Q3) why leverage is limited to 5* , why not more than this ?
Dronoms | Marginswap
Token listed on cross margin are thoroughly vetted before listing and when a trader opens a leverage position, liquidators watch to make sure their account is above the liquidation threshold.
We launched on Avalanche as a part of our multi-chain strategy and also because Ethereum gas fees have had a habit of spiking, making it expensive for traders to use Marginswap on Ethereum mainnet.
The main reason why leverage is limited to a max of 5x on cross margin is to protect traders. We believe anything more is just a tool for exchanges and liquidators to convert your crypto from yours to theirs. Also Marginswap makes money when users are happy with the outcome of a trad, meaning they are more likely to open another trade. This is why we cap leverage at 5x.
Nicolas | Avalanche
And last question from Twitter is coming from antosalma24 : Where do you see MarginSwap in 2021, both in price and adoption?
Dronoms | Marginswap
While the second quarter of 2021 has been a tough one for cryptocurrencies as a whole, things are looking up for Marginswap going forward, having recently emerged from beta we are ready to tackle new challenges as a community. Our goal is to keep building and adding features that traders love and will use. And we are in a consultation process to determine what those features will be (isolated margin for riskier assets? Limit / stop-loss orders?). As such, our community will continue to grow and we are looking forward to what the rest of 2021 has in store for us.
Nicolas | Avalanche
Thank you for answering those questions. I will now open the channel and let people ask questions for a few minutes before closing the channel again and let @Dronoms & @olvidadorio answer the questions
Channel is open !
Okay I will close the channel soon
Channel closed ! @olvidadorio & @Dronoms the floor is yours :)
Yavuz Selim Çelebi
I see most of your roadmap is finished. Is there anything that isn’t right? When will you announce your new roadmap?
Dronoms | Marginswap
We recently released a blog post please check it out here https://medium.com/marginswap/polygon-support-staking-and-more-c92dba94aa15
Gökhan
MarginSwap is audited by a firm such as Certik. So is that enough for investors?
Dronoms | Marginswap
Marginswap was audited by certik and we hosted a 50k$ competitive audit with https://code423n4.com/
Apart from the above, we had an extensive beta testing period that lasted over 2 months
Star Lord
Who will get maximum benefit from this partnership ?
What future expansion you guys are hiding behind your hood, any surprises we can expect ?
Dronoms | Marginswap
In this case, I think marginswap and avalanche relationship benefits both parties. And it is no longer a surprise if we spit it out now :)
Adv. Sandip Sharin
Any strengths of Avalanche which u think can compliment with ur needs in achieving your future objectives? #Avalanche #Avax $AVAX
What r d advantages provided by Marginswap over Avalanche on the Spot/Cross Margin Trading feature? #Avalanche #Avax $AVAX
Gabriel| Marginswap
Avalanche was the first network we launched on after ethereum, in our experience it has been a great platform for leveraged cross chain arbitrage
⚡️Reinђαr∂ ⚡️
What is the structure of this project , is it decentralised or a open sourced protocol where everybody can contribute? If so, how does the governance plan on being handled?
Dronoms | Marginswap
Yes our core contracts are open source and soon our UI and SDK will be soon. Please look through and chip in if you can!
Yavuz Selim Çelebi
You are using the liquidities provided by Uniswap and Sushiswap. Will we be able to see other liquidity providers in the near future?
Dronoms | Marginswap
Yes. We also tap the liquidity on Pangolindex for Avalanche traders
Kuen Shahi
What is your vision in transforming Marginswap into a multi-chain protocol?
Dronoms | Marginswap
The goal is make it possible for users accross multiple chains to be able to trade, borrow and lend 10s and hundreds of assets. We are very close to making that a reality.
Salma Grande
For any Crypto and blockchain projects and platforms. Security, scalability and interoperability are the most important factors. So, can you explain what technologies # uses in its project to make #Marginswap, extensible and interoperable?
Gabriel| Marginswap
Our contracts use the basic set of OZ contracts as a base and then we have come up with an architecture that we’re very happy with to enable extensibility without needing to resort to proxy contracts: in our system all funds are stored at arms length from logic contracts, which makes it so that users only have to approve one contract for withdrawal and logic contracts can be added/exchanged by governance. Relationships between constituent contracts as well as ownership are managed but one very simple, audited contract so nothing can slip through the cracks
Yavuz Selim Çelebi
I see most of your roadmap is finished. Is there anything that isn’t right? When will you announce your new roadmap?
Gabriel| Marginswap
In the upcoming month we will focus on polishing our user experience more, after that we have some plans to propose to the community, all in good time
Nicolas | Avalanche
Thank you so much for taking your time to answer these questions @Dronoms & @Olvidadorio ! Before we end where can the community go to learn more about Marginswap ?
Dronoms | Marginswap
Please feel free to check out the app at https://app.marginswap.exchange/
Website: https://marginswap.finance/
and docs: https://docs.marginswap.exchange/
Thanks for having us and we are looking forward welcoming you all to our community.
Nicolas | Avalanche
Perfect thanks again. It was great to have you both here!
About Marginswap
Marginswap is a decentralized trading protocol that natively supports overcollateralized loans, spot and leverage trading of tokens on AMMs like Uniswap and SushiSwap. With Marginswap, traders can trade a wide variety of assets, like on any existing swap protocol but with up to 5x leverage.
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About Avalanche
Avalanche is an open-source platform for launching decentralized applications and enterprise blockchain deployments in one interoperable, highly scalable ecosystem. Avalanche is the first decentralized smart contracts platform built for the scale of global finance, with near-instant transaction finality. Ethereum developers can quickly build on Avalanche as Solidity works out-of-the-box.
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