Why is the Decentralized Derivatives Market Bringing New Opportunities

Kalkin995

The craze of the bull market in 2020, primarily driven by on-chain trading and lending in DeFi, has ingrained decentralization into the collective consciousness. Until now, people have been able to perform most of their transactions and investments on-chain, and they have become accustomed to on-chain interactions. So, what's the direction of the next bull market? This has become a topic of interest for many investors.

**Why the Focus on the Derivatives Track**

Cryptocurrencies have been around for over a decade, and the shift to on-chain trading has become a trend. Hot topics like Web3, GameFi, and metaverse have highlighted the significance of blockchain. Blockchain innovation has entered a new stage where many projects are essentially taking the Web2 model and adapting it to Web3. This transition to decentralization has fundamentally changed how people invest.

In the previous bull market, DeFi activities like lending and swap trading essentially replaced centralized exchanges for financial management and spot trading. This had a profound impact on centralized exchanges.

So, where does the next wave of decentralization occur? Derivatives have become a focal point for many projects, with leveraged contract trading being at its core. As the early advantages of the crypto market diminish, participants' expectations remain high. Leveraged trading satisfies this demand by increasing overall volatility.

For instance, during recent sideways movements in BTC, many investors struggled to find opportunities. Through leveraged trading, even minor fluctuations can provide substantial investment opportunities. Participants are drawn to the crypto market primarily for its high volatility. If cryptocurrency price volatility becomes similar to the stock market, its appeal would diminish significantly.

**LeverFi: A Rising Star in the Decentralized Derivatives Track**

Decentralized derivatives have seen significant growth and garnered the attention of top institutions. Innovations in this space have quietly taken place, leading many leveraged traders to shift from centralized exchanges. Manipulation events related to centralized derivatives have increased user distrust, creating opportunities for the decentralized derivatives track. Projects like DYDX, GMX, and LeverFi have gained attention, with LeverFi emerging as a rising star.

LeverFi is a permissionless on-chain leveraged trading platform that offers up to 10x leverage. It supports collateral in BTC, ETH, Curve LP, and Uni LP tokens. Traders use borrowed funds from lenders to engage in leveraged trading.

**Advantages of LeverFi**

LeverFi stands out from other leveraged trading platforms for several reasons:

1. **Earn while Trading for Value Discovery**: Unlike other leveraged trading platforms, LeverFi redeploys participants' collateral to Convex or AAVE, allowing users to earn additional value through DeFi staking. This means that as long as the leverage position isn't liquidated, users can earn additional income. This approach increases collateral value, reducing liquidation risk, keeping participants' accounts secure, and providing additional earnings.

2. **Unified Collateral of Different Types**: LeverFi allows users to collateralize various tokens and use them as a unified collateral pool. It also supports some LP assets as collateral. This streamlines the collateral process and saves time, eliminating the need for users to exchange tokens before collateralization.

3. **Stable Market through Non-PVP Trading Strategy**: LeverFi is a non-PVP (Player vs. Player) protocol. In PVP models, liquidity providers and traders engage in a zero-sum game, creating conflicts of interest. LeverFi's non-PVP approach ensures that both traders and liquidity providers can profit, balancing out the system and providing stable returns.

**LEVER Token and Its Value Discovery**

LEVER Token is LeverFi's governance token with a total supply of 35 billion tokens. It primarily functions in governance and voting activities, as well as offers fee discounts for trading. Users who stake and lock LEVER can obtain xLEVER, which provides a 20%-60% fee discount. Longer-term xLEVER stakers also receive xLEVER staking rewards.

LEVER was listed on Binance Exchange in June 2022, and its price has experienced fluctuations. It recently reached near its previous low point and broke the downtrend line. With increased trading volume, this could be an opportune time for a potential upswing, offering favorable investment prospects.

**Conclusion**

Decentralized derivatives didn't receive much attention during the 2020-2021 bull market, but there are reasons to believe this sector will be a focal point in the next bull market. The growing popularity of centralized derivatives has further propelled the development of decentralized derivatives. As an innovative project in this sector, LeverFi offers attractive investment opportunities. Previous bull market favorites often launched on Binance during the bear market of 2018-2019. Similarly, LeverFi launched on Binance during the bear market of 2022, making it highly likely to gain more attention in the next bull market.

Isha000

There will be no shortage of attention in this market.

977Iti

It's still necessary to choose a reputable trading platform for transactions.

Kamal531

This is also a trading platform recommended by many people that you can take a look at.

Kahn332

Using USDT can reduce the risk of freezing.

Kalkin995

Many people are using USDT now, it's quite straightforward.

Jafar224

When there's profit, it's time to leave; playing the game for too long is not advisable.