DX.Exchange Launches Smart Leverage Tokens to Allow Margin Trading on the Blockchain
Wednesday, July 10, 2019 5:50 AM
BARCELONA, SPAIN / ACCESSWIRE / July 10, 2019 / Coins Marketplace Technologies OÜ is delighted to announce that DX.Exchange is launching a brand-new financial instrument called Smart Leverage Tokens or SLT’s. Branded as Turbo Token it’s the world’s first smart leveraged token enabling margin trading on the blockchain. The launch of SLTs paves the way for the future of leveraged trading in the cryptocurrency markets.
“Exchanges are in a race to add leverage products, but they are still tied to the old school of margin trading with high risk and fees” says Daniel Skowronski CEO and Co-Founder of DX.Exchange. “DX always looks to use blockchain technology that can bridge the gap between the old world and the new such as being the first to digitalize real world stocks such as Tesla and Google. Now we created a new category called Smart Leverage Tokens or SLT’s. It’s a game changer when it comes to margin trading”.
What Are Smart Leveraged Tokens?
SLTs are a decentralized index enabling trading on margin without any lending, high fees, or complex products. Like traditional leverage, they offer the potential for gains at multiples above the price changes of the underlying asset. However, with current leveraged products, the trader borrows margin from the exchange. Borrowed margin increases risk exposure for the exchange and incurs overnight interest charges for the trader.
With SLTs, the trader owns their leverage, and therefore also bears any risk. These leveraged tradable assets will track the price changes second by second, enabling traders to go long or short against the underlying cryptocurrency.
Turbo Tokens will offer investors a wide variety of SLTs paired against USDT or DXCASH (the native utility token of DX.Exchange,) including BTC, ETH, XRP, ADA, and BNB. Leverage will be 5x against USDT pairs and 10x against DXCASH token pairs.
Leverage creates the potential for substantial gains regardless of whether the markets are going up or down. Turbo Tokens offer traders the ability to multiply returns from applying their knowledge of cryptocurrency market trends. However, unlike traditional margin instruments like futures or CFD products, there is far less complexity. There is also no risk of traders facing socialized losses or auto-deleveraging that have been applied by other exchanges to offset their own risks.
Furthermore, Turbo Tokens have a unique compounding mechanism, which means that the value of the asset can never go to zero, so traders never face more risk than the loss of their original investment. Turbo Tokens can be stored in an individual’s own cryptocurrency wallet.
How Do Turbo Tokens Work?
Turbo Tokens track price movements second by second. For example, with a BTC/USDT 10x long Turbo Token, if the price increases by 0.1% in any given second, the leveraged Turbo Token would increase by 1%. Conversely, a leveraged 10x short Turbo Token for the same pairing would decrease by 1%.
If any given Turbo Token loses more than 90% of its value, the Turbo Token will be burned, and a new Turbo Token issued at a new price. Remaining funds will be credited to the customer’s account.
Prices of the underlying cryptocurrencies are determined based on an aggregated feed of exchanges around the world, which ensures a smoother price calculation for movements in the value of Turbo Tokens. The price feed is available for each tick-by-tick update, so traders have full price transparency at any given moment, enabling them to make informed decisions about their positions.
Turbo Tokens are ERC-20 tokens, with a total supply of one million units. They were created by a team of experts from Coin Marketplace Technologies’ Blockchain Lab and have successfully passed an external security audit from a leading firm in blockchain security.
Managing Supply and Liquidity
Turbo Tokens are managed by an in-house team with expertise in trading and algorithms. The team will have multiple responsibilities including market making, order book maintenance, and monitoring for price manipulation. They will also periodically sell new Turbo Tokens at allotted times, burn tokens if close-out is triggered, and continually assess risk on the underlying assets.
The launch of Turbo Tokens puts DX.Exchange in a position to rival existing margin trading platforms including BitMEX, Bitfinex, and OKEx. Speaking of the launch, DX.Exchange CEO Daniel Skowronski said:
Turbo Tokens will also be available for trading on other exchanges, which will be announced in due course. DX.Exchange is also developing a white label trading platform for Turbo Tokens, which is expected to be released towards the end of the year.
DX.Exchange is the first digital asset exchange offering the opportunity to trade in cryptocurrencies, digital stocks, security tokens, and now smart leveraged tokens, with cryptocurrency or fiat currency. DX is built on Nasdaq’s market-leading matching engine and market surveillance technology.
DX.Exchange holds operating licenses with the Estonian Financial Intelligence Unit. License FVR000051 is for providing exchange services to exchange virtual currencies against fiat currencies. License number FRK000039 is for providing a virtual currency wallet service. With over 70 research and development engineers, the global team at DX.Exchange brings extensive experience in UI and financial technology.