Project Variable is now open for alpha testing
A glimpse to the future of the cross-chain decentralized trading platform built on Function X Network
Summary
∫f(x)dx, code name Variable, the Function X decentralized exchange, is a high performance, cross-chain decentralized exchange built on the Function X network. It is the bridge that connects crypto users with traditional financial markets. In addition to the usual crypto derivative products, it also offers the industry’s first stock-based perpetual contract product that allows users to trade stocks (like TSLA/AAPL) using perpetual contracts, taking a leveraged position, on-chain.
Background
According to data from the Bank for International Settlements (BIS), for the first half of 2021, the total notional amount outstanding for contracts in the derivatives market was an estimated $610 trillion, and that represents contracts alone. We estimate the entire traditional derivatives market of 2021 could exceed $1000 trillion. As of today, the whole crypto market is sitting at or around $2 trillion. So, the potential for growth in onchain derivatives trading is significant.
Why a decentralized derivatives exchange?
There are major demands for trading, hedging and investing in the crypto space and these demands are increasing rapidly as more users are super excited to dive into the space. The onchain statistics shows the average daily trading on the dYdX perpetual contracts exchange is around $700 million and it is growing. The market demand is huge. Moreover, the business model of decentralized exchanges has been proven to be workable, sustainable and profitable.
A decentralized exchange is a non-custodial and transparent market place. Funds always remain at users’ individual wallet addresses and all transactions are transparent and can be verified on chain. Users have control of their funds and avoid spam trading. But these advantages come at a cost: slower transaction speeds. This is inherent in decentralized exchanges because the process of making an order is longer than on centralized exchanges: Users make an order request that, in turn, is broadcast to the blockchain where the blockchain node is verified and the order is created. The process is shorter and faster on a centralized exchange, but there the funds are controlled by the exchange, not the user.
What differentiates the Function X Decentralized Exchange from other decentralized exchanges?
The alpha version of Variable can handle 2,000 transactions per block (3 seconds per block) and the transaction speed and i/o can be further increased to 20,000 transactions depending on the market conditions and demand (that come with costs).
Some might wonder if 2000 transactions input / output is sufficient during the alpha stage. Based on observations and statistics, the wash trading and spam trading transaction volume represents a significant part of the total transaction volume. Since every ‘action’ (creating an order, cancelling an order, etc.) on Variable requires a gas fee, this adds barriers for spammers and mitigates potential wash trading.
Variable offers a stock-based perpetual contract that allows crypto users to trade stocks without leaving the blockchain network and allows traditional stock brokers and market makers to provide service to crypto users without touching an asset class (cryptocurrencies) they may not be familiar with. Apart from that, users can trade or hedge their favorite stocks 24/7 with leverage on Variable: a unique feature.
How will Variable benefit the Function X network
The consumption of $FX will be increased since each transaction will consume $FX as a gas fee. Thus, the growth of transactions on Variable will increase the demand for $FX. We believe that the growth of Variable will ultimately attract more users and traffic to the Function X ecosystem and benefit the whole network.
Step-by-step approach
The route to decentralization has a very steep learning curve, especially when it involves trading derivatives (perpetual contracts) on a decentralized exchange. The setup, mechanism, interface, transaction fees, funding rate, etc. are different from traditional platforms. Because of this, multiple testing stages will be implemented to help users, market makers and traders to become familiar with the environment during this transition period.
During the alpha phase, NO real tokens will be involved.
Users may follow the instructions in the step-by-step guide to get test tokens from the dedicated faucet and try out the settings and features.
You can also earn more USDT test coins by referring people to join the Alpha testing program.
The trading pairs will follow the real world market, although no real tokens are involved. The purpose of the alpha version is to discover bugs, work out possible bottlenecks in functions and test out stability. We look forward to your feedback.
For more guides about Variable, please read them here.
Be part of the public Alpha program to win 5,000 FX
To help us improve f(x)Variable, a total of 5,000 FX tokens will be given away. All the testers will be eligible to win participation awards, referral awards, gainer awards, review rewards and more. Here are the details.
This is an alpha testing version. There are bugs and unexpected situations. Here are tips for you to trouble shoot:
- If you have already installed holiday beta 2.0, it is recommended to remove beta 2.0 before installing beta 3.0 with f(x)Variable alpha version.
- It is possible that you need to manually add some wallet addresses, including Variable testing address.
- This version is for testing only. The functionality of making cross-chain transfers to Variable network is closed in this version.
- If there is a significant bug that requires to reset the test network, the developers will back up all the data which we will try not to affect the ranking of referral or USDT test coin distribution records.
Lastly, please always do your own research (DYOR) and participate at your own risk. It should also be noted that the regulatory framework in many countries is in a state of flux with regard to decentralized exchanges. Such exchanges are definitely on the radar of regulators, but exactly what actions could be taken is unknown at this point.
