The Future of Decentralized Trading: An In-Depth Look at Metavault.Trade
Discover the benefits and risks of decentralized exchanges and why Metavault.Trade leads the charge with deep liquidity and an all-in-one spot and leverage trading platform.
The crypto world is constantly evolving, and after the recent events in November 2022, a new generation of decentralized exchanges (DEXs) is making its mark on the trading scene. In this deep dive, we'll take a closer look at Metavault.Trade: who claims to be ushering in a new era of Decentralized Exchanges.
Cryptocurrency exchanges allow traders to buy or sell cryptocurrencies using different currencies, including cryptocurrencies, stablecoins, or fiat currencies. The two main types of exchanges are centralized (CEXs) and decentralized (DEXs).
CEXs are owned by commercial entities, operate on their infrastructure, and have to comply with regulatory frameworks, including know-your-customer (KYC) policies. On the other hand, DEXs are decentralized applications that run on a blockchain. As a result, they are not owned by any entity and offer greater anonymity and self-custody to traders.
DEXs let traders remain in complete control of their funds and do not require user data for trading, unlike CEXs. This makes them a more secure option, as there is no risk of data breaches or loss of funds in the case of a hack or company default.
The volume of trades on DEXs has been increasing steadily since 2019 and reached 12% of the total trade volume between September 2021 and September 2022, with peaks of 25% in Q1 2022. On November 22, 2022, Uniswap recorded a trade volume of $1.2 billion, ranking third among all exchanges, behind Binance and Coinbase.
There are different types of DEXs, but the most popular model is based on liquidity pools and is used by Uniswap, PancakeSwap, and many others. This model determines prices through an Automated Market Maker and does not allow for limit orders or margin trading.
One key benefit of decentralized crypto exchanges is the increased security of funds. Since these exchanges are not centrally located, they are not as susceptible to hacks and theft. In addition, decentralized exchanges often allow users to retain control of their private keys, further increasing security.
- Increased Transparency. Another critical benefit of decentralized crypto exchanges is increased transparency. These exchanges typically use open-source code, which allows anyone to audit the code and verify that it is secure. In addition, decentralized exchanges frequently provide users with more information about trades than traditional centralized exchanges.
- Reduced KYC Regulations. One more essential benefit of decentralized crypto exchanges is reduced KYC (know your customer) regulations. In addition, many decentralized exchanges do not require users to provide personal information, making them more privacy-conscious than traditional centralized exchanges.
The decentralized nature of most cryptocurrency exchanges means no central authority regulating the platform. This could potentially lead to problems if the exchange is not run properly, as there would be no one to hold accountable in the event of fraud or theft.
Another potential risk associated with a lack of regulatory oversight is that these exchanges may be used for money laundering or other illegal activities. While it is possible to do these things on centralized exchanges, the decentralized nature of these platforms makes it easier for criminals to trade cryptocurrencies anonymously without being detected.
One downside of using a decentralized cryptocurrency exchange is that they often charge higher transaction fees than their centralized counterparts. This is because they need to compensate for the lack of central authority by charging users more for each trade.
Some decentralized exchanges also require you to pay gas fees to trade on their platform. Gas fees are charged by the network that powers the exchange (usually Ethereum) and goes towards paying miners who process transactions on the blockchain. These fees can add up, especially if you're making numerous trades, so it's important to factor them into your decision when choosing an exchange.
Many decentralized exchanges have complex interfaces that can be difficult for newcomers to cryptocurrency trading. This is because they typically rely on complicated smart contracts and require users to understand how they work before they can start trading.
This can be off-putting for some people and may deter them from using these exchanges altogether. However, some decentralized exchanges are starting to adopt simpler interfaces that are easier to use, so this may not be a long-term problem.
Decentralized exchanges have countless advantages, but there are also some potential risks to be aware of before you start using them. These include the lack of regulatory oversight, higher transaction fees, and complex interfaces. However, decentralized exchanges can be a great way to trade cryptocurrencies if you're willing to take on these risks.
Decentralized exchanges (DEXs) have grown in popularity among traders prioritizing privacy and security. In this landscape, a player has been making more and more noise to the point that we at Flagship needed to take notice. They are offering a new take on decentralized trading, Metavault.Trade is designed to provide deep liquidity and an array of trading features.
Metavault.Trade offers spot and perpetual futures trading, with up to 50x leverage on short and long positions. The platform's features include low transaction fees, protection against liquidation events, and an all-in-one platform for spot and leverage trading. These are just a few advantages traders will enjoy when using Metavault.Trade.
The multi-asset pool is the backbone of Metavault.Trade's trading mechanism. The pool allows the platform to have shared liquidity across all assets supported, allowing traders to swap large volumes without price impact.
Here's how it works: For each asset deposited in the pool, an equivalent dollar amount of index tokens (MLVP) is minted. Then, liquidity providers can withdraw their assets at any time by burning MLVP in exchange for any asset in the pool. This is why Metavault.Trade can offer seamless swaps without price impact.
Let's take an example. Suppose the pool comprises five assets (BTC, ETH, MATIC, USDC, and DAI) in equal dollar proportions. If a trader wants to buy 50% of the BTC supply with USDC, they can do so instantly at the exact price shown on the platform without any price impact. The only thing that changes after the order is executed is the pool's state, which becomes BTC: 10%, USDC: 30%, and the rest unchanged. The price of BTC offered on the platform remains the same before and after the swap, even though half of the available supply has been bought!
To ensure the pool remains balanced, liquidity providers will be incentivized to deposit in-demand assets and disincentivized to deposit those with excess.
Metavault.Trade launched on Polygon, with plans to expand to other chains. The platform supports six large caps and three stablecoins at launch, including BTC, ETH, MATIC, LINK, UNI, AAVE, USDC, DAI, and USDT.
Choosing Polygon over other chains was a strategic move for Metavault.Trade. Polygon transactions are fast and cheap, and it's easy to onboard users thanks to on-ramp/off-ramp options from exchanges. Additionally, Chainlink provides many price feeds on Polygon, which is crucial for the platform's pricing mechanism and the listing of new assets.
To set the price of each asset, Metavault.Trade aggregates Chainlink and Time-Weighted Average Price (TWAP) pricing from major DEXes and centralized exchanges (CEXes). This pricing mechanism reduces the risk of liquidation events caused by temporary wicks on some exchanges and benefits leverage traders.
The crypto market trades trillions of dollars each month, with decentralized exchanges offering perpetual trading accounting for a significant portion of that total. It is estimated that DEXes make anywhere from $5 million to $60 million in fees each month from perpetual trading. Metavault.Trade aims to capture a portion of this growing market, leveraging its innovative design and advanced features to set itself apart from its competitors.
With its low transaction fees, all-in-one platform for spot and leverage trading, and its unique multi-asset pool, Metavault.Trade is poised to become the go-to solution for traders who want to control their funds at all times. Its protective measures against liquidation events and its incentives for liquidity providers to participate make it an attractive option for both experienced traders and newcomers to the crypto market.
Overall, the integration of Chainlink Price Feeds and Keepers into Metavault.Trade helps create a more secure and reliable trading experience for users. Using high-quality, decentralized price data from Chainlink Price Feeds helps settle users’ trades accurately and securely. At the same time, the integration of Chainlink Keepers allows users to execute limit orders quickly. The advanced limit order functionality, combined with the tamper-proof price data from Chainlink, helps protect traders against volatile market conditions and provides them with opportunities to seize market opportunities.
The platform has access to the most trusted and secure sources of financial data and automation in the ecosystem, allowing users to trade confidently. As the DeFi industry continues to grow and evolve, Metavault.Trade is well-positioned to provide its users with the best possible trading experience.
Metavault.Trade is integrated with Socket's infrastructure for a seamless bridging experience for its users. The Metavault.Trade Bridge offers users the ability to onboard from 7+ chains into Metavault.Trade on Polygon with ease. The bridge is powered by Socket's Liquidity Layer, an interoperability protocol for secure and efficient data and asset transfers across chains.
To use the bridge, users simply need to click on the 'Buy' tab on the navigation bar and select the 'Buy MVX on Polygon' option. From there, users can select the from and to chains, the sending and receiving tokens, and choose the best bridging route based on their preferences. After reviewing the quote, users can click on 'Bridge' to initiate the transaction.
The Metavault.Trade Bridge offers major bridges, including Hop, Multi-chain, Across, Celer, Hyphen, and native bridges, including Polygon POS. The bridge supports multichain swaps and swap-bridge-swaps through 1inch, allowing users to go from any token on the source chain to their desired token on the destination chain. Users can check their wallets and complete the swap if the destination swap fails due to insufficient liquidity. Additionally, users can use Refuel to get gas and complete the bridging if there is a gas issue.
As we stated previously, the shift towards DEX and self-custody is driven by the growing demand for decentralized solutions that provide greater security and privacy for users. The centralization of assets has resulted in numerous mismanagement and unethical incidents, leading to millions of dollars in user losses. Decentralized solutions, on the other hand, give users greater control over their assets, enabling them to manage their investments more effectively.
Perpetual DEXs, also known as perps, are gaining popularity among users as they provide a new way to speculate on the crypto market with greater privacy and security. Perps are a new type of derivative protocol that allows users to trade on the price of underlying assets without owning them. This has resulted in a significant increase in transaction volumes and adoption.
The start of 2023 has been a busy and productive period for Metavault, with the company achieving several significant developments, achievements, and news. Metavault has shipped various new features and improvements, including allowing traders to set leverage up to 50x, increased brand awareness through its onboarding of MVX_Intern, and new partnerships with Token Terminal and Open Ocean. The company has also launched its ambassador program, which is expected to bring more people into the Metavault community and provide valuable feedback and insight. To respond to the high demand for Liquid Staking, Metavault has also implemented the stMATIC token to the MVLP pool, expanding trading routes and increasing revenue for MVX and MVLP holders.
The next few months are promising for Metavault as the company continues to improve its services and provide the best user experience. The first major step will be introducing the Trailing Stop feature, providing traders greater flexibility and control over their trades. The team at Metavault is also working on adding Synthetics to its platform, attracting large investors and traders. The company is committed to its journey of continued growth and improvement.
2023 promises to be an excellent year for the crypto industry, with users continuing to move towards decentralized solutions and innovative protocols. The shift towards DEX and self-custody, coupled with the rise of perps and other innovative protocols, will drive the growth of the crypto market and provide users with new and exciting opportunities for investment and speculation. With Metavault leading the way in crypto development, it will surely be an exciting year for the crypto industry.
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