Section 1: GoldenInu.Exchange Collaborate with UniDex
GoldenInu.Exchange marks a significant breakthrough in decentralized finance (DeFi) by integrating with UniDex to provide a trio of unique benefits for perpetual trading. This collaboration introduces an intuitive user interface (UI) that consolidates leverage trades, ensuring orders are filled at the most favorable rates across multiple leverage protocols, including Perpetual Protocol, GMX, SNX, and GNS.
A standout feature of GoldenInu.Exchange is its universal support for any trading pair. This capability empowers traders with unrestricted market access, provided they have an internet connection. The platform's versatility extends to custom Exchange-Traded Funds (ETFs), various cryptocurrencies, indices, and more, offering an extensive range of options for users.
GoldenInu.Exchange is built on an intent-based architecture that allows for the creation of customizable pools and trading strategies, enhancing its adaptability and utility. The platform's pools are designed with composability in mind, enabling users to devise new pools that cater to specific strategies and risk appetites.
How it Works:
- Leverage Trading: To engage with the protocol, users can start by visiting leverage.goldeninu.exchange.
- Diverse Features: While this page focuses on the core protocol, users can explore additional features through various frontends hosted on UniDex.
- Leverage Aggregation: The protocol excels in aggregating leverage trades across multiple protocols, offering deep liquidity and optimal trading routes. Pioneered by UniDex in early 2021, this technique has been continuously refined to better align with the evolving DeFi ecosystem.
Section 2: The Innovation of PrMM Pools
GoldenInu.Exchange, in collaboration with UniDex, is excited to unveil PrMM pools – a groundbreaking concept in the world of decentralized exchanges (DEXs). PrMM, short for Proprietary Market Making, pools represent an innovative type of liquidity pool. They empower users to not only provide liquidity and earn fees but also grant unparalleled control over their market-making strategies.
These pools are ingeniously designed to be both flexible and adaptable, catering to a wide array of market-making strategies. Drawing inspiration from the UniswapV4 Hooks model, PrMM pools allow developers to craft bespoke market-making strategies and seamlessly integrate them as individual pools.
Why PrMM Pools?
The inception of PrMM pools was driven by the need to address the rigidity, lack of adaptability, and scalability issues prevalent in current Perpetual Decentralized Exchanges (Perp DEXs). Traditional models either suffer from overexposure due to a lack of tranches or, in cases where tranches are used, they often restrict control over market-making strategies and fail to accommodate tailored risk preferences, as they are governed by the protocol rather than the liquidity providers (LPs). Additionally, existing models lack inherent composability features, relying heavily on external protocols for this functionality.
PrMM pools are a paradigm shift in liquidity provision for Perp DEXs. They amalgamate the finest market-making practices and strategies into a single, modular, and comprehensive aggregation protocol.
Exploring Strategies in PrMM Pools
The versatility of PrMM pools lies in the hands of the hook operators, who have the autonomy to decide and implement their preferred strategies. These hooks can be visualized as modular protocols, deployable as individual pools.
For instance, a strategy akin to GMXv1, characterized by no price impact but higher fees, can be replicated within a PrMM pool. Here, LPs can contribute liquidity to a pool that facilitates trading on specific pairs, maintaining no price impact while imposing higher fees.
Consider a more intricate strategy, where a hook operator aims to establish a pool that enables automatic trading through keepers on newly listed Binance pairs. This pool could also assign price impacts based on the current Binance order book, illustrating the sophisticated and dynamic capabilities of PrMM pools. This innovative approach not only enhances the efficiency of market-making but also aligns with the evolving needs and strategies of traders in the DeFi space.
Section 3: Trading Fees
Dynamic "Surge Fees" System
At GoldenInu.Exchange, we've implemented a dynamic fee system, aptly named "Surge Fees," to maintain a balanced Open Interest (OI) on the platform. The concept behind Surge Fees is straightforward yet effective in promoting market equilibrium.
Here's how it works: The fees adjust dynamically based on the imbalance in open interest between long and short positions. For instance, if there's a significant imbalance, with twice as many long positions as shorts (a 2.0 imbalance), the base fee for entering long positions will double, while the fee for entering short positions will be halved.
To illustrate, consider a scenario where the base fee for ETH/USD is 0.1%. If the open interest for longs (openInterestLong) is 100 USDC and for shorts (openInterestShort) is 50 USDC, the fee for entering a long position would be adjusted to 0.2%, whereas the fee for entering a short position would drop to 0.05%. This pricing strategy encourages traders to fill positions on the lesser-populated side (shorts in this case), while those taking positions in line with the market's bias (longs) are charged a higher fee.
Borrow Fees: Interest Payments
In addition to the Surge Fees, GoldenInu.Exchange incorporates a borrow fee system. This involves fixed-rate interest payments calculated by the second. Certain trading pairs, particularly those intended for short-term trades or those with high volatility, may incur higher-than-average interest payments. Notably, these interest charges are deducted from the final profit and loss (PnL) upon closing the position, rather than being directly subtracted from the margin used for the trade.
This innovative fee structure, developed in collaboration with UniDex, is designed to foster a more balanced and fair trading environment, encouraging strategic trading while maintaining market stability.
Why are we collaborting with UniDex for our leverage platform?
We launched a $GOLDEN PRMM pool with $GOLDEN as collateral. This allows our holders to earn real yield on their tokens while also earning fees from the pool.
- Every $GOLDEN BEP-20 holders can use their token as collateral for trades
- $GOLDEN BEP-20 holders earns real yield additional revenue in a staking counterparty pool
- The protocol earns 75% of collected fees and will then burn it via our Golden Treasury
Exemple of the PrMM pools
Pooling is not risk free. By pooling you are becoming a market maker taking on both positive and negative PnL from traders. Which if the total PnL exceeds the liquidity pool, the pool will be at a total loss. Similar to any other pool based model, or market maker in traditional finance.
The liquidity pool has 100 USDC
Alice has 10 USDC
Alice opens a 1x leverage trade with 5 USDC
Alice is at a loss of -50% on her open trade and closes this trade to prevent further loss
Alice's total loss is 2.5 USDC which is sent to the pool for a total of 102.5 USDC & Alice is sent back 2.5 USDC to her account.
the TVL of the pool has now increased to 102.5 for a 2.5% gain for poolers socialized across all poolers.
Similarly, if Bob opens the same position shortly after and gains 2.5 USDC on his trade and closes his position in profit
The pool loses 2.5 USDC putting it back to 100 USDC and Bob gains 7.5 USDC (5 Margin USDC + 2.5 USDC PnL)
The pool balance is now 97.5 USDC for a 2.5% loss for poolers socialized across all poolers.