What is the bZx Protocol?

CryptoMode bZx Protocol

Advancing the DeFi ecosystem will require new applications, protocols, layers, and services. The bXz ecosystem is proving rather worthwhile in this regard. It is a great layer to build new applications and tap into decentralized finance on Ethereum. 

An Overview of bZx

Considering how much the DeFi ecosystem has grown as of late,it becomes increasingly difficult to keep track of everything. Dozens of new projects arrive on a monthly basis, creating more market competition. bZx Is one of the newer projects, and one that has some potential. The platform can currently best be described as a collection of Ethereum smart contracts that facilitate margin trading without intermediaries. 

Over the years, cryptocurrency enthusiasts have flocked to margin trading on a regular basis. It allows for bigger profits, albeit it can occur much steeper losses too. It is not a form of trading people should explore without preparation and proper market knowledge. Those that possess the necessary skills will often find themselves limited to using centralized platforms. 

bXz Is here to change all of that. The DeFi lending platform is targeted at margin traders first and foremost. Due to its decentralized nature, all processes occur automatically and without delay. No one can exert control over what happens or how transactions are handled. An interesting approach to margin trading, and one that can be successful down the line.

More Than Lending

As is often the case in the cryptocurrency industry, there are a lot of successful projects in a specific market segment. In the DeFi space, the lending market is by far the biggest industry. It is a very competitive space too, which is both attractive and problematic. New projects cannot simply copy established players. Instead, they need to come up with their own business model first and foremost. 

With bZx, it is not just about getting into the lending game. While it provides this functionality – like with Maker and Compound – it also goes well beyond this aspect. Combining lending with margin trending is an option that hasn’t been explored all that much. That may come to change in the future, depending on how successful ventures like bZx turn out to be.

Three Native bZx Tokens

As is courtesy with new platforms, new tokens must be created. In the case of bZx, there are three main tokens: iTokens, pTokens, and BXRX. All three are using the ERC20 token standard. 

Both the iTokens and pTokens are used for the lending aspect of the platform. A lender supplying funds to the liquidity pool receives iTokens, which generate interest automatically. They can also be redeemed for the original funds plus interest whenever necessary. 

Borrowing money, on the other hand, awards users with pTokens. Every pToken can represent a short or long position, as part  of the margin trading angle. Values of pToken can fluctuate a bit, depending on which underlying assets are leveraged. All price information is piped in through ChainLink’s decentralized oracles. 

For BZRX, the situation is a bit different. This is the platform’s native governance token. In the future, it will allow holders to claim their “stake” in the bZx insurance fund. An interesting feature to look forward to. This fund represents 10% of all interest earned by lenders, which can accrue quite quickly.  While this token has been sold through an ICO, it can also be found on Binance, Hotbit, Balancer, and Mooniswap

A Growing Ecosystem

Integrating the bZx smart contracts has given way to a growing collection of services and products. Noteworthy names include DeFi Saver, Staked, 1Inch, AlphaWallet, and DeFiZap, among others. All of these tools integrated this same technology, indicating there is a growing market for these options. 

Furthermore, it is worth noting two major products have been built on top of bZx so far, Both Fulcrum and Torque provide different options for DeFi enthusiasts. Fulcrum is a DeFi margin lending and trading platform. Torque provides indefinite-term loans with fixed interest rates. Both options are worth checking out, depending on one’s preferences. 

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