Most centralised exchanges that allow leveraged trading make use of an insurance fund to help manage liquidations on their exchange.
Typically, to trade a certain size requires an initial margin amount in a user’s account. As the price of the instrument varies, the exchange monitors each user’s position and requires that the user maintains a maintenance margin. If an adverse price movement takes the maintenance margin required above the amount of margin in the account, the exchange will liquidate that position.
But what happens if the price moves so quickly that the exchange is unable to liquidate the user’s position…
At Serenus Coin we have produced a DEX-powered stablecoin. Our decentralised exchange, or DEX, trades only one pair of assets: ether against serenus. Like most stablecoins, serenus is pegged to the US dollar. It is a synthetic dollar.
Consider the following scenario. The creation of synthetic dollars on BitMEX — the world’s most liquid bitcoin derivatives exchange:
Serenus Coin is a DEX that produces a crypto-collateral dollar pegged stablecoin. It does this by allowing issuers to create contracts that users can mint or burn serenus from. Users do this by sending ether or serenus, respectively, into an issuer contract. For more see this introductory article.
Since November last year, liquidity providers on Uniswap have earned fees by providing the ability for users to swap between ether and a variety of ERC-20 tokens. MKR and Dai are the biggest markets sofar. The fees are good but changes in price also affect profitability. Understanding how providers’ exposures to ether…
Serenus Coin doesn’t get off-chain access to ETH/USD prices. How then does it maintain a stable peg to the US dollar? Active on-chain swap markets now exist in multiple stable coin denominations. The market cap of coins like MakerDAO’s Dai, Centre’s USDC, Paxos, True USD and so on — all ERC20 tokens — collectively run into the hundreds of millions.
The oracle contract on Serenus is now setup to use Uniswap and Kyber Network to get prices for ETH entirely on-chain for the Dai, TUSD and USDC. These are real, live, market-driven prices. Any discrepancy between prices on those platforms…
Today marks the alpha launch for my
bootstrapped solo-founder side project on Ethereum. It’s a
crypto-collateralized, scalable, dollar-pegged stablecoin called
1. Tether, Circle USD, etc.: a dollar collateral one-for-one peg held
in a bank
2. NuBit, Basis, etc.: algorithmic token supply management (failed projects!)
3. MakerDAO and Synthetix: crypto-collateralized loans of stablecoins
When viewed through the lens of price volatility these types look like
1. Submerge crypto-volatility in the relative calm of the US dollar
2. Attempt to push price volatility in the present out to…