The need for decentralization of digital asset exchanges is growing (1,2), as evidenced by the receptions that Øx, and many other protocols (Swap, Omega, Kyber) supporting peer to peer exchange of ERC20 tokens, have been receiving. The recent launch of the Øx protocol has garnered exciting responses from the Ethereum community, and new Øx-based relayers such as Ethfinex, Radar Relay and The Øcean are already entering the foray. We are excited for the arrangement to mature into the wholly trustless, secure, and decentralized ecosystem that it promises to be.

While observing the three main functions provided by current digital asset exchanges (Poloniex, Bitfinex), viz., Exchange (regular trading), Margin Trading, and Lending, a wholly decentralized exchange comprising all these three functions seems plausible. As Øx has enabled the Exchange function very well, at Lendroid, we are embarking on a mission to enable the Lending and Margin Trading functions. We believe these are the missing pieces in the puzzle that complete decentralized exchanges, and we would like to solve this by integrating with Øx (and other P2P exchange protocols as they launch).

Lendroid enables lending and margin trading for decentralized exchanges

Our plan to complete the puzzle

Øx has proposed Relayers to create a distributed shared liquidity pool of order books. We intend to extend this arrangement by creating a distributed pool of loan offers (global lending liquidity pool). Funds borrowed from such a pool can then be used by the trader to margin trade. Furthermore, to ensure margin trading occurs successfully, we introduce off-chain keepers who act as wranglers, preventing margin traders from defaulting.