Introducing SynMargin: A Multi-DEX Margin Trading/Arbitrage Protocol
Since the launch of the first margin trading feature by Bitfinex in 2014, up to date, we have seen margin and leverage trading features in centralized exchanges gain popularity. As of the time of writing this article, most of the well-known centralized exchanges like Binance, Kraken, BitMEX, Bybit, Kucoin, and many more have launched their leverage and derivatives trading features.
One might wonder what margin and leverage trading are and why they are gaining popularity. Simply put, margin and leverage trading is a high-risk, high-reward trading tactic that allows traders to potentially multiply or amplify their profits by using borrowed funds (leverage) typically from a margin platform to increase their buying power.
For example, a user who wants to buy $5,000 worth of a cryptocurrency but only has $500 can borrow the additional $4,500 from the leverage platform and use it to buy the cryptocurrency. If the price of the cryptocurrency increases by 10%, the trader’s position would be worth $5,500, which is a profit of 100% after the borrowed amount is returned.
Though this sounds enticing, it is important to recognize that leverage trading is associated with increased risk, as the user can equally lose all of their money.
As this is an important feature in the crypto space, it has also been launched on decentralized exchanges like dYdX, Pancakeswap, and many more. However, the adoption and growth in decentralized applications are much slower than we have seen in centralized exchanges. This can be attributed to the complexities that come with developing such a feature and the learning curve for potential users.
To tackle these roadblocks, Syntrum developed SynMargin, a Multi-DEX Margin and Arbitrage trading protocol. SynMargin allows users to trade across multiple supported decentralized exchanges (DEXs) while utilizing margin and arbitrage strategies.
While developing SynMargin, Syntrum focused on building a dApp that gives users a great experience and is easy to use. Unlike the margin and leverage trading features currently offered by DEXs, SynMargin is not an isolated application. It is developed to work with multiple DEXs by default. This allows users access to a wider market on whichever DEX they want to use. SynMargin also allows users to carry out leveraged-arbitrage.
The development of SynMargin by Syntrum is definitely an exciting one as it will revolutionize how leverage trading is done in the world of decentralized exchanges.
SynMargin is currently in testing, with an estimated release date of Q2 2023. To stay informed about all ongoing news and developments, interested parties can join Syntrum’s community on various social media platforms.
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