Lever supports users to conduct spot leveraged transactions in DeFi to improve the efficiency of asset use. The Beta version is currently available on the Ethereum Ropsten testnet.
Written by: Watson
DeFi (decentralized finance) total lock-up (TVL) has grown from less than 1 billion US dollars a year ago to 52.7 billion US dollars today (DeFi Pulse data on April 20), showing explosive growth, and it has also become the cryptocurrency market. One of the most powerful engines in the bull market that started in the second half of 2020 and is still hot.
Among them, the TVL of the lending market led by AAVE and Compound and the decentralized exchange (DEX) led by Uniswap and Sushiswap accounted for 90%, becoming the two important pillars of DeFi, but the two seldom overlap, leading to far-reaching Lower than the capital utilization rate of the traditional financial market: Few lending platforms support spot or even margin trading. The current DEX cannot allow users to directly borrow for leveraged transactions, that is, it is impossible to go long or short a certain encrypted asset. In addition, the transferable transaction deposit certificate obtained by the user after depositing in the decentralized lending agreement, few platforms can easily circulate and realize it.
There will always be innovative projects in the market to bridge the gap between the aforementioned decentralized lending agreement and the decentralized exchange. On April 20th, Lever Network, a decentralized leveraged trading platform that announced the completion of a $600,000 seed round of financing, came into being. Lever aims to build the first leveraged trading brokerage platform based on AMM (Automatic Market Maker Model) in the DeFi world, supporting users to conduct leveraged transactions of assets such as spot assets in DeFi, so as to improve the efficiency of DeFi’s asset use.
Lever’s core team is composed of blockchain practitioners and data scientists from the world’s top financial technology companies, with an average of more than 8 years of experience in blockchain and financial technology product development. The dAPP with the largest transaction volume on the market and the NFT sandbox game with more than 10,000 active users. When they were preparing to design Lever products, they found the following problems and opportunities between DeFi lending and DEX:
Low asset utilization rate: The current lending platform has no intersection with exchanges, and there is a large gap. Users must first withdraw loans from the lending platform before they can trade on DEX. The tokenized pledge certificate obtained by the user on the lending platform itself has a relatively large asset value, but it has not been used rationally, resulting in a lower asset utilization rate, which ultimately leads to the status quo of lower asset deposit interest rates in the lending platform. According to statistics, the annualized interest rate of stablecoins on DeFi lending platforms has long been between 5% and 12%, while the annualized interest rates of mainstream assets such as WBTC and ETH are only less than 0.1% to 1%;
Users cannot directly conduct leveraged transactions in DeFi: There is a huge demand for leveraged transactions commonly used in traditional financial markets in the DeFi market. However, nowadays, after users have manually pledged loans on the lending platform, the experience of returning to DEX to execute transactions is very cumbersome, because the trading positions cannot be managed, which greatly increases transaction risks and costs. In addition, the current loan agreement cannot achieve excess loan financing, that is, it cannot increase the leverage higher than 1 times.
Existing leveraged trading platforms have low liquidity: Although dYdX’s spot leveraged trading platform has been launched, its order book trading mode naturally limits the injection of external idle assets, so it can be seen that dYdX only has BTC/USDT, ETH/ With a small number of trading pairs such as DAI, the liquidity is far from meeting normal trading needs and cannot encourage more users to participate in trading.
In response to the above-mentioned user needs and pain points, the decentralized leveraged trading platform Lever currently being built allows users to mortgage, lend, and leverage transactions in one go, and go long or short any underlying asset:
- For depositors, you can deposit any idle assets (including pledge certificates you obtain from other lending agreements) into Lever to obtain interest or mortgage loans to obtain higher interest and liquidity mining income (the original LEV Token).
- For traders, Lever’s fund pool currently provides a leverage of up to 3 times to open positions, and users can freely choose to go long or short. To this end, Lever cleverly leveraged the Automated Market Makers (AMM) of Uniswap and Sushiswap, which have the largest trading liquidity in DeFi, to provide sufficient liquidity and establish the largest trading liquidity in the entire DeFi industry for traders The leveraged trading platform meets the trading volume needs of traders at different levels.
Lever.Network asset flow
The prospect that users can easily leverage their available assets on the Lever platform to obtain more profits is based on the following three characteristics and advantages of Lever products:
Sufficient trading liquidity: Lever innovatively introduces external automatic market makers such as UniSwap, Sushiswap, Pancakeswap, etc. to ensure that the platform has sufficient trading liquidity. Traders can choose to open long or short positions at will. In addition to the common WBTC and ETH, Lever also supports other common ERC20 token assets such as AAVE, SNX, UNI, etc. and other long-tail assets.
Extremely high capital utilization rate: Lever provides direct borrowing usage scenarios and leveraged trading services, greatly increasing the frequency and amount of borrowing, and then pushing up deposit interest rates through higher asset utilization rates, increasing the motivation and willingness of depositors, and thereby Enter the forward loop. In addition, the tradable transferable pledge certificates aToken, cToken, etc. obtained by users through the pledged assets of lending agreements such as AAVE and Compound can be mortgaged to obtain interest in Lever, and these pledged assets can also be used as collateral for leveraged transactions.
Convenient and safe trading experience: Lever conducts structured design in three major aspects of asset deposit and lending, transaction execution, and position management, which minimizes the threshold for new users to participate in and uses, and allows users to open/close positions, deposit, withdraw, and return. Both provide a convenient interactive design. Lever also integrates TradingView’s professional candlestick chart analysis to make the experience of professional traders smoother. In the future, products such as PNL, market warning, and multi-chain support will also be added. In addition, Lever’s smart contract has been audited and optimized, striving to control the user’s transaction gas fee at the lowest level, while maximizing the security of the contract’s assets.
Compared with the leveraged trading products provided by centralized exchanges, Lever naturally has the decentralized advantages of fairness, transparency, and security, and user data is completely controlled by users to avoid privacy leakage. Compared with the well-known decentralized derivatives trading protocol dYdX in the market, Lever’s product design ideas are completely different: dYdX, as an earlier DeFi product, has accumulated a certain amount of trading liquidity through a self-built order book, but Lever embraces the current DEX The Matthew effect concentrated in the AMM model, its trading liquidity comes from the integration of all the large DEXs in the market, and it is bound to exceed dYdX.
Lever.Network product interface
Lever started beta product testing on Ethereum’s Ropsten testnet on April 9th ​​one month before the mainnet launch on May 9th, encouraging users to trade. The top 100 will share the rewards of 5000 platform token LEVs. The maximum reward for discovering major product bugs is 25000 LEV.
Lever Network has completed the joint lead investment of NGC Ventures, ArkStream, LD Capital, AU21, and the seed round investment of DAOMaker, YBB, DFG and other institutions. It will launch IDO in the near future and plan to extend product deployment from the Ethereum main network to Layer 2 ( Optimism) and Binance Smart Chain (BSC) hope to leverage the DeFi market with trillions of assets through leveraged trading brokerage services.
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