Nov 28, 2022
How are Perpetual Protocols like Metavault.Trade
DEXs Providing Reassurance when CEXes fail
We all have heard a common proverb in crypto, i.e., Not your Keys, Not your Crypto. Users have suffered a lot recently from FTX Drama. People are starting to lose their trust in centralized exchanges. We all know that the future of Web3 lies in DEXes and DeFi. A recent report from the Nansen Team showed that GMX Token of GMX.io, i.e., Decentralized Perpetual Exchange is performing well despite the bear market. In this article, we will understand how perpetual protocols like Metavault.Trade, i.e., a friendly fork of GMX.io can provide reassurance to the crypto community during this dramatic incident with CEXes and a bear market.
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Summary
- Metavault.Trade is a DEX for swap and perpetual trading with up to 30x leverage on Polygon.
- It is built by the team behind Metavault DAO.
- Its code is a friendly fork of GMX.io.
- Metavault has integrated Chainlink Price Feeds and Chainlink Keepers to help secure and automated Perpetual trades.
- Metavault has integrated Socket infrastructure for a seamless bridging.
- MVX is the Metavault.Trade ‘s governance and utility token.
- The maximum supply of MVX is 10,000,000.
- MVLP is the Metavault.Trade ‘s liquidity provider token.
- MVLP holders earn rewards in the form of MATIC and esMVX tokens.
- It has been audited by Techrate.
Also Read: Metavault Trade Review
What’s wrong with CEXes & Why DeFi is the future of Web3?
Centralized Exchanges have dominated the Web3 Space for quite some time. But recent FTX drama has proved that DeFi is the only solution. As a result, the future of crypto exchanges is slowly but gradually turning toward decentralized exchanges.
Here are a few reasons why people are shifting towards Decentralized Exchanges:
- Anonymity: All CEXes require sign-up, which requires the users to provide the exchange provider with their data like KYC verification, Address Proof, etc., and much more, which most people are not comfortable with. DEXes do not carry this out. Since no central body maintains them, KYC standards are not necessary.
- Security: Recent Bankruptcy Events of the centralized exchanges shattered and severely damaged the public’s trust. Crypto.com accidentally transferred 320K ETH of user deposits to Gate.io on 21st October. But, Crypto.com has repeatedly stated that 100% of user-owned crypto is held offline in cold storage in collaboration with hardware wallet provider Ledger. So, people are starting to lose their trust in centralized exchanges.
- Incentivization: Very Few CEXes provide an option for users to monetize their crypto holdings through staking, adding liquidity, etc., whereas we can see these options with high APR in almost all DEXes.
We are currently witnessing a bear market, where everyone is losing their money in crypto, and the price of BTC has reached around $17K. But if we talk about the GMX Token of GMX.io, i.e., decentralized spot & perpetual exchange, it has seen a sharp increase in its price, and many crypto users are benefitted from it. Here is the complete analysis by the Nansen Team. The main reason behind this is incentivization programs of perpetual exchanges like GMX.io. Now, we will discuss more on Metavault.Trade which is on a similar path like GMX.
What is Metavault.Trade & Why is it important?
Metavault.Trade is a DEX for swap and perpetual trading with up to 30x leverage on Polygon. It aims to become the go-to solution for traders who want to control their funds at all times without sharing their data. Traders can use it in two ways:
- Spot trading with swaps and limit orders.
- Perpetual Futures trading with up to 30x leverage on short and long positions.
Metavault.Trade provides a platform with no KYC or 2FA, so users can start trading quickly without hassle and registration. Furthermore, users only need a crypto wallet to start trading on Metavault. Now, users have three wallet options, i.e., MetaMask, Wallet Connect, Coinbase Wallet, and Exodus Wallet. Also, as we know that MetaVault is built on Polygon, we will have to change our default MetaMask Network from Ethereum Mainnet to Polygon Mainnet.
Its code is a friendly fork of GMX.io. After carefully studying GMX’s tokenomics, the Metavault DAO team chose to redesign it from scratch for Metavault.Trade. The main differences are:
- It allocates a larger proportion of the tokens to reward farming. As a result, the incentivization program is far more substantial.
- Metavault DAO team launched MVX token with no private or seed rounds.
Now, we will look at some premium features of Metavault.Trade.
- Built on Polygon: Transactions are fast and cheap.
Chainlink also provides a large number of price feeds on Polygon. - Multi-Asset Pool: It allows the platform to have shared liquidity across all the assets it supports. Let’s say the pool comprises five assets, i.e., BTC, ETH, MATIC, USDC, and DAI, which are equal in terms of dollar value, i.e., 20% of each. A trader can buy 50% of the BTC supply with USDC instantly at the exact price shown on the platform without any price impact. After the order, BTC is 10%, USDC is 30%, and the rest remains unchanged. As a result, the price of BTC on the platform is the same before and after the swap, even though half the available supply has been bought up. In order to rebalance the pool, liquidity providers are incentivized to deposit in-demand assets and disincentivized to deposit those in excess.
- Metavault.Trade x Chainlink: Metavault has integrated Chainlink Price Feeds and Chainlink Keepers to help secure and automated Perpetual trades.
Metavault.Trade x MM Finance: Metavault has recently announced its cooperation with MM Finance. As a result, Metavault rebalancing bots can now use the Madmex and MMF pools. MM Finance will rebate a small portion of the fees generated by the MVX rebalancing bots back to Metavault. MM Finance team will use generated fees to add back into the MLP pool, increasing the value of MLP overtime. Also, a huge 65% of these protocol fees will be used to buy back MMF to support the price of their native token. On the other side, Metavault will invest the obtained rebates to increase its PoL, i.e., Protocol-owned Liquidity, which also subsequently boosts the flywheel-effect idea and also increases stand-alone capacities.
Metavault.Trade x Socket: Metavault has integrated Socket infrastructure for a seamless bridging. Socket is an interoperability protocol for secure & efficient data and asset transfers across chains. It is not a bridge or a cross-chain app but an infrastructure that allows developers to build apps with interoperability as a core part of app infrastructure.
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How Liquidity Providers are incentivized in Metavault.Trade?
MVX is the Metavault.Trade ‘s governance and utility token. The maximum supply of MVX is 10,000,000. Minting beyond this maximum supply is controlled by a 28-day timelock, which will only be considered if there is a need to increase the supply. Here is a quick overview of token distribution:
MVX holders are strongly incentivized to stake their tokens. As a result, they are rewarded with three different types of rewards.
- Share of the Platform Fees: MVX stakers get 30% of the fees collected across the platform in the form of MATIC.
- esMVX: MVX stakers are rewarded with a new token, i.e., escrowed MVX. It is non-transferable, and there are only two ways to use it:
(i) esMVX can be vested to be converted and distributed as MVX.
(ii) esMVX can be staked and earn the same rewards as staked MVX. - Multiplier Points (MPs): MVX stakers are rewarded in points. MPs are awarded at 100% APR. Each MP can be staked to earn the same amount of MATIC as an MVX token.
Here is a quick summary of the reward structure:
- Staked MVX earns MATIC, esMVX, and MPs.
- Staked esMVX earns MATIC, esMVX, and MPs.
- MPs earn MATIC when staked
- MVLP earns MATIC and esMVX held in the wallet.
MVLP is the Metavault.Trade ‘s liquidity provider token. It consists of an index of the assets used on the platform for swaps and leverage trading. Users can mint MVLP by adding any index asset to the liquidity pool, while MVLP is burned each time a user removes any index asset from the liquidity pool. In addition, MVLP holders earn rewards in the form of MATIC and esMVX tokens.
The best part about DEXes is that they are open source, and users can verify their data. Now, we will get some insights from Metavault.Trade’s data. This data is updated daily on their website.
- Trading Volume: If we analyze the data from 1st June 2022 to 24th November 2022, then the trading volume on Metavault.Trade has increased exponentially and is about to reach $320M. We should remember all this was happening while we are still in a bear market, and all FTX Drama.
2. Total Fees: If we analyze the data from 1st June 2022 to 24th November 2022, then the total fees on Metavault.Trade has also increased like trading volume and is about to reach $1M.
3. Pool: As we have already discussed Metavault.Trade has a Multi-Asset Pool, allowing the platform to have shared liquidity across all the assets it supports. If we analyze the data from 1st June 2022 to 24th November 2022, then the total volume of this Pool is around $7.5M, which includes;
(i) AAVE: 63022.42028
(ii) USDT: 479326.0226
(iii) UNI: 63380.60595
(iv) DAI: 478881.6049
(v) WETH: 1407248.805
(vi) USDC: 1560839.303
(vii) WBTC: 2493230.96
(viii) WMATIC: 461418.306
(ix) LINK: 51595.40558
(x) BUSD: 119906.3973
4. Unique Users: If we analyze the data from 1st June 2022 to 24th November 2022, then the total no. of unique users on Metavault.Trade platform is now increasing with 250–350 unique users daily.
5. New Users: If we analyze the data from 1st June 2022 to 24th November 2022, the total number of new users on Metavault.Trade platform is now increasing with 100–200 new users daily, and the number is about to reach 4,500.
6. User Actions: In the data given below, readers can see the share of actions, i.e., Swaps, Margin Trading, Mint, and Burn MVLP performed by users on Metavault.Trade platform. If we analyze the data of the last week, i.e., 16th November 2022 to 22nd November 2022, then;
(i) No. of Swaps = 1,986 {with an approximate average of 300 daily}
(ii) Margin Trading = 1,358 {with an approximate average of 200 daily}
(iii) Mint & Burn MVLP = 1,002 {with an approximate average of 150 daily}
Our readers can check and analyze more data on stats.metavault.trade.
Conclusion
If we talk about the last week’s reward distribution of the Traders on Metavault.Trade, then $MVX rewards are at 84.58% APR, and $MVLP rewards are at 173.65% APR. Traders on Metavault.Trade are earning profits, despite the whole FTX Drama, the Collapse of CEXes, and the Bear market. Metavault.Trade team is fully committed to the project with new exchange listings, platform upgrades, AMAs, the launch of the new referral competition, etc. and much more. All credits of images and information used here belong to Metavault.Trade.
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