Solving for Crypto mass adoption — Part II
Complex UX. Lack of LPs. Poor Performance. Fragmented liquidity. Centralized Opacity.
In the first part we dealt with problems impeding crypto mass adoption in spot trading markets. In this post, we’ll delve into the issues blocking adoption in the derivatives trading arena, and the eventual standardization of the world’s futures and options trading infrastructure around it.
The themes are similar to spot trading problems but with an added layer of complexity due to the nature of the instruments being traded.
Complex UX.
Below is the Binance futures trading UI.
The form on the right side is what someone trying to place an order needs to focus on while soaking in all the information on the left side: funding rate, the instrument being traded, the orderbook, leverage level and types and finally order type and price levels. The scope for error with these interfaces is high.
Lack of LP options.
It may come as a surprise to most people that there is a whole area of futures trading that involves little to no risk and that is being a fully hedged market maker or LP (liquidity provider). These options have not been completely democratized and made accessible to the general public in the same way spot trading on De-Fi has e.g. allowing anyone to be an LP on services like Uniswap.
Poor performance.
Mostly a consequence of the platform they were built on, many early DEXes suffered from the dual problem of high fees and low performance. While this is being addressed, the remnants of the issue can still be seen in a few major decentralized exchangs.
Fragmented liquidity.
With a new crop of blockchains springing up, high quality collateral lies scattered across different chains e.g. wBTC on ETH has it’s equivalents on Polygon or Avalanche. One can use various bridges to get tokens across chains. However this liquidity is silo-ed on the chain it resides on and is unable to be used to activate any form of De-Fi / trading activity on other chains.
Centralized opacity.
Besides being a single point of failure for theft or being compromised in some way since they are in custody of all funds, centralized derivatives exchanges also suffer from the problem of being too opaque, especially when it comes to position and leverage management, funding rates calculations and their ADL (auto deleveraging) algorithms.
Enter IndraDEX
IndraDEX, a cross-chain decentralized spot, futures and options trading platform aims to alleviate these problems.
Simple UX.
We want to bring the ease of use that we’ve seen with token swap UIs to futures trading. Below is our attempted v1 UI to do just that.
The form captures all of the important information in a couple of simple steps and does not require the user to master a larger more complex UI.
LP options.
We plan to offer our users the option to be liquidity providers on our futures trading platform. This will include providing liquidity for specific trading pairs such as WBTCUSD (coin-margined), ETHUSDT (stablecoin-margined) and so on, as well as investing in vaults that will execute more sophisticated trading strategies under specific mandates e.g. accumulate more WBTC while preserving principal in USD terms.
Low fees / High performance.
We’ve chosen to build our platform on Polygon / MATIC for various reasons. The primary drivers of our decision are that Polygon offers high performance (1000s of txns per second), much lower fees (1–2 orders of magnitude below ETH) and is EVM compatible. This means that smart contracts built for ETH in Solidity or Vyper can easily be ported and deployed on Polygon.
Fragmented liquidity.
Our plan is to offer the option for users on any blockchain to deposit their collateral and execute trades against that collateral. They should be able to do so without having to move their collateral across cross-chain bridges. We will initially support ETH, Polygon and Avalanche and anticipate rolling out support for a few others such as Optimism and Arbitrum in subsequent releases.
Conclusion.
The push to mass adoption is a marathon and not a sprint. There isn’t one magic bullet that is going to usher in a new age of users using crypto as easy as they do today with Facebook or Instagram. There are 100s of moving pieces or what I like to call Micro-infrastructure that needs to be built to facilitate this e.g. cross-chain deposits / withdrawals.
While a lot of this infrastructure will need to be built to facilitate the construction of our De-Fi platform, we also intend on making them public utilities, accessible to everyone, and offer options for developers to utilize their composability to build more complex apps. Stay tuned!
Connect with us
We hope you enjoyed this post. Do let us know in the comments. If you’re interested in more details and participating in our token sale, please get in touch with me at gautam@indracryptocapital.io.
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