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GAINS Associates

MCDEX — Telegram QUIZ & AMA — September 18

On Friday, September 18, we had the pleasure to welcome to our Telegram chat:

Gareth Mensah, Head of Business Development

We asked him questions about the development of MCDEX.

Some sentences have been slightly edited for readability but the meaning has been conserved.

Summary

MCDEX is a decentralized exchange for trading perpetual contracts. Users can trade with up to 10x leverage on MCDEX.

MCDEX introduced the first decentralized ETH-PERP and added LINK-PERP, SNX-PERP, COMP-PERP and LEND-PERP.

MCDEX has a hybrid model, both an order book, for traders that are used to this trading experience on a centralized exchange, and Automated Market Makers (AMM’s), for on-chain liquidity.

Introduction

Q — Alex Raffin from GAINS: What did you do before crypto, how did you get into crypto and did you have any other venture in crypto previous to being involved with MCDEX?

A — Gareth from MCDEX: I’m an engineer by trade, built a lot of mobile apps for startups and large organizations. I got into crypto during the 2017 bull market, came for speculation, stayed for the tech and the communities. I’ve also worked with DAOstack and Zilliqa as a developer evangelist.

Product

Q — Alex Raffin from GAINS: What’s MCDEX about in a few simple sentences?

A — Gareth from MCDEX: MCDEX is a decentralized exchange for trading perpetual contracts. Perpetual contracts are a type of derivative. They are leveraged positions, introduced and made popular by Bitmex, they allow traders to take leveraged positions with no expirations. We are often referred to as the “decentralized Bitmex”. We introduced the first decentralized ETH-PERP, and recently added LINK-PERP, SNX-PERP, COMP-PERP, and LEND-PERP. On our platform, you can trade with up to 10x leverage.

Q — Alex Raffin from GAINS: On BitMEX, you pay more and more interest to maintain your position open, as time passes. Is that the case with the perpetual?

A — Gareth from MCDEX: There is a funding rate, which is calculated by comparing the numbers of short positions versus the numbers of long positions. If the rate is positive, they are more longs than shorts, then the longs pay the shorts and vice versa. The funding rate is pretty small, so unless you hold a position for months or years it’s not a significant portion of your position.

That is how perpetual contracts are able to not have expiration dates

Q — Alex Raffin from GAINS: What stage is the project/product at?

A — Gareth from MCDEX: The MCDEX exchange has been live since June. It’s available here.

Q — Alex Raffin from GAINS: How many users so far? What’s the volume?

A — Gareth from MCDEX: You can currently trade perpetual contracts. We also added the $MCB governance token which currently works as a reward for liquidity providers to our AMM and a way to create/vote on proposals. Daily volume ranges between 1–2 million.

Not sure about the number of users. We will try to find that out and provide that info.

Q — Alex Raffin from GAINS: What is the token use case? How did you make sure it captures the value of the ecosystem you’re building?

A — Gareth from MCDEX: MCDEX has a hybrid model. We have both an order book, for traders that are used to this trading experience on a centralized exchange, and Automated Market Makers (AMM’s), for on-chain liquidity.

This is a very innovative approach and the goal is to go beyond being an exchange, for MCDEX to provide the infrastructure for bringing derivatives to DeFi.

In our ecosystem, we have traders, holders, liquidity providers, developers, entrepreneurs, etc.

To align the interests of all those actors, we introduced the $MCB token. We have a roadmap with the plan to add more utility to the $MCB token. Find out more here. As we further decentralize MCDEX, it will become a DAO ran by the $MCB token holders.

Q — Alex Raffin from GAINS: Can people choose if they want the centralized exchange experience or the decentralized one?

A — Gareth from MCDEX: Yes. Beyond that, AMM is a smart contract with on-chain liquidity, which can interact with other smart contracts, so you can think of AMM as money LEGOs that others can use to build new services and financial products

Q — Alex Raffin from GAINS: Why choose the name Monte Carlo Decentralized Exchange?

A — Gareth from MCDEX: Yes, we get that a lot. Monte Carlo, on top of being a beautiful place in the south of France, is also an algorithm figuring out probabilities and finding the correct answer.

Trading derivatives is about risk management and figuring out probabilities. We are working on providing the correct answer to the crypto community for making it easy to trade derivatives.

Q — Twitter user @_rhythms29: What makes the MonteCarloDEX Ambassadors Program different from other ambassador programs?

A — Gareth from MCDEX: Our ambassador program is called the high rollers. It’s a group of traders, VCs, and influencers that are very active in our community. They take on tasks to grow our ecosystem and are rewarded in $MCB. We have regular conversations, meetings, and work together as an extended team. What makes us special is first, we have a cool name, and we’re also excited about bringing derivatives to DeFi. This is something that is not well understood just yet, but derivatives are super important for the growth and maturation of the crypto and DeFi space.

Click here to know more or join.

Q — Twitter user @Ale_Urich: The leverage in MCDEX is up to 10x. Do you plan to increase this amount when there is greater liquidity in the exchange?

A — Gareth from MCDEX: Yes, think of it as a simple, safer, and easy to use introduction to derivatives. That limit is currently set by the MCDEX core team. You can see in our roadmap we plan to progressively decentralize the platform, so at some point, that decision will be in the hands of the $MCB token holders. 10x makes sense right now. As we increase the liquidity in the exchange we will be able to increase that limit safely.

The crypto market is very volatile, so adding leverage can create very volatile situations, so liquidity concerns are a must.

Q — Telegram user Jesus Freites: How does MCDEX facilitate investing in perpetual markets?

A — Gareth from MCDEX: We have an order book for those familiar with the centralized exchange. We also provide AMMs for trading via smart contracts. We will introduce MCFUND, for users to deposit their funds and copy trade more experienced traders.

Q — Telegram user Tanya: Perpetual contracts are a new direction in the DeFi crypto space. What MCDEX products and benefits will help you become leaders in this field?

A — Gareth from MCDEX: Derivatives help make markets more efficient. You can imagine by giving traders a bigger voice, they can find and point to the inefficiencies in a given market. If you look at the top 50 crypto projects in CoinGecko, most would agree many don’t belong there. That’s market inefficiencies.

Q — Telegram user Jhonathan: What are the bases of the MCDEX “Trump 2020” contract? How does MCDEX correlate with DeFi? Do you have your own token? If so, how profitable is it and what are its uses?

A — Gareth from MCDEX: Yes, we have the $MCB governance token, right now it’s also a reward for users to provide liquidity to our AMMs.

We built MCDEX on top of a set of smart contracts called the Mai Protocol. We’re on version 2, we have version 3 coming up, with very exciting new features.

We are about to transform MCDEX into the Uniswap for derivatives. Users will be able to create and list perpetual based on any ERC-20 compatible tokens.

We can also use the Mai Protocol to create other derivatives, like binary options, hence the TRUMP 2020.

Q — Telegram user Lun Mei (CryptoBuddhist): Let’s suppose that a crash like in March 2020 happened again. What mechanisms does MCDEX have to avoid a lack of control of the network and cause extraordinary losses?

A — Gareth from MCDEX: We have a fail-safe mechanism. In case of exploits, we have backup oracles and we see if there are too many discrepancies between them and stop the trading activities. In case of a market crash that goes beyond our liquidity limit, we have a socializing loss mechanism, and we could use the printing of $MCB to resolve this.

Team

Q — Alex Raffin from GAINS: How many people are in the team? For how long have you been working on MCDEX?

A — Gareth from MCDEX: There are around 20 people on the team, mostly engineers, and most of the team is based out of Beijing. Vikas, our head of Marketing is based out of India, I am based out of Colombia. I have been with MCDEX since the beginning of the summer

Finance

Q — Alex Raffin from GAINS: Did you raise funds so far? If so, how did you handle them? Are you planning to do any future raises?

A — Gareth from MCDEX: Before working on MCDEX, the team was also mining Bitcoin. We decided to raise $3.5m from the founders and YooZoo about two years ago. We recently added a small round of token investment with some of our influencers. We also provided a financial report where people can look into the finance of the project in detail. We could have a public token offering in the future, but that hasn’t been decided just yet. Find out more here. We will regularly provide such financial reports for full transparency.

Security

Q — Telegram user 🐍 jidan🐍: What makes users trust MCDEX’s safety and security?

A — Gareth from MCDEX: We have had two audits, from Open Zeppelin and from Consensys. We also have a strong security model, around every part of the platform that is described in our whitepaper.

Partners

Q — Telegram user CrypTo Damiya 🕵️: How does MCDEX Project choose companies for cooperation?

A — Gareth from MCDEX: We have ongoing conversations with many projects in the space, if they share our ethos and our vision for bringing derivatives to defi then we are happy to collaborate and build together.

Q — Telegram user Emi 💌: How does your partnership with ChainLink contribute to the growth of MCDEX?

A — Gareth from MCDEX: Our perpetual contracts are smart contracts deployed on the Ethereum blockchain. They need a price feed to know the price of the underlying token. We use the ChainLink network to get an accurate and reliable price feed, and we work closely together to list even more PERP contracts.

Business Development

Q — Twitter user @alej_pacedo: The MCDEX MCFund product will allow you to trade perpetual contracts even if you have no experience in perpetual trading. How will this be possible? Will there be any kind of advice within the platform?

A — Gareth from MCDEX: MCFUND is a new feature that is about to be introduced in the coming weeks. It will be similar to token sets. We will provide pools for users to deposit their collateral, and those pools will copy trade more experienced, derivative traders. We’ve identified those traders and with the copy trade, it will make trading derivatives as easy as depositing funds into a pool. This should encourage both experienced traders to share their trades in exchanges of interests on the pool, and less experienced traders to try derivative trading. This is a very exciting new feature which should bring a lot of people into the world of derivatives

If you want to stay updated with this new exciting feature, you can join our Telegram and Discord channels.

Q — Telegram user Gotsuka: What improvements will be seen from the implementation of a new AMM formula?

A — Gareth from MCDEX: The new AMM formula will further reduce impermanent loss and make it more profitable for liquidity providers.

Q — Telegram user In Altcoins We Trust: Does MCDEX have any kind of educational or academic campaign planned for a successful experience using MCDEX?

A — Gareth from MCDEX: We are working on content to educate the space, but we also work with ambassadors to do so. If you’re interested we would be happy to work with others to educate the space on this very important topic.

Thanks for coming in today Gareth! It was fun. Where can we follow you? — Alex Raffin from GAINS

Thanks for having me! This is a great community, I was happy to spend time with you guys! A lot of great questions, so this was fun! I hope you all had fun too and learned more about MCDEX! Follow us on Telegram and Discord — Gareth Mensah from MCDEX

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