Seeking Feedback on a New DEX that you don't get Rekt

[junhyun82]

Hello community! 

I'm excited to share an idea for a new decentralized exchange (DEX) we're developing and would love to get your input!

Pain Point:
The cryptocurrency market is highly volatile, and traders often face liquidation due to short-term spikes or market manipulation, even when their investment direction is correct. This volatility risk can wipe out positions in an instant, discouraging traders.

Solution:
We're creating a DEX that addresses this issue with a unique exchange credit mechanism. This feature allows traders who get liquidated to recover their funds, provided they continue trading on our platform. This way, we help traders stay in the game despite short-term market volatility.

Unique Selling Proposition (USP):

Exchange Credit Mechanism: Recover funds after liquidation by continuing to trade on our DEX.
Mitigate Market Volatility Risk: Protect against violent market beta risk and manipulation.
Stay in the Game: Encourage traders to persist despite short-term volatility spikes.

We believe this DEX can set a new standard by providing a safety net for traders and encouraging continued participation in the market.

We would love to hear your thoughts, suggestions, and any concerns you might have. Looking forward to your feedback!

Thanks,

Joe

[Adbitco]

Are you there official representative?
Why not make account with the project name and post with it then you could share the site with us here to read more details about the Decentralized Exchange. But however, nice solution thu. I am not a fan of dex for long never used any of them instead do my trading on centralized exchange, you know altcoin are mostly interacted with dex and not a fan of them.

[taufik123]

It is interesting to hear that a DEX will see its users recover their liquidated funds, but will this actually be realized because traders who are exposed to liquidation will simply lose their funds with no hope of getting them again. 

And about protecting against market risk with high volume and some ruthless market manipulate,
is this like a warning feature and some management strategy etc?

You haven't mentioned what DEX you're talking about, whether it's your own project or you're just a partner to promote.
But it's a good idea if you're a developer and do your own research on other people's opinions on this forum.

[junhyun82]

Sorry I wasnt too clear.

Yes I am the co-founder of this project and I am working with my other co-founder (the dev) to shape this with feedback from the community. I've learnt from my previous startups that user feedback at all stages is paramount to building a product that people will actually use.

The assumption is that the user doesnt go all in into a position so at least they could make the next trade. We won't have any special warning systems either than whats already provided by other DEXes and CEXes such as a stop loss function or a message saying that the user is close to the margin limits.

The anti-rekt feature is more akin to what you would see in a casino. They sometimes provide "rolling chips" credit to gamblers to gamble. Here, we plan to give traders, exchange credit for their losses. They can earn back those credits through trading more and showing positive PnL from trading. E.g. Let's say, you had a USD 10,000 worth perp call position with BTC and unfortunately, you get completed liquidated due to an unforeseen market event. The USD 10,000 is credited to your account at the end of the month. The credit is only accessible through unlocking it through positive trading PnL on the DEX platform. E.g. you make a USD 12,000 trading profit in the subsequent month, you can unlock the USD 10,000 credit for you to trade on the DEX.

I do have a working site but I wanted to gather more feedback at the concept level before getting people to try it out.

Your additional questions, and feedback are most welcome given we are still at the early stage to shape a good dex that traders would want to use.

[BitMaxz]

Are you sure about this project? It seems interesting.

Do you mean that after the liquidation of 10k USD, we can take it back by just trading and make a positive PNL above the amount we lose?

How does it exactly work? The question in my mind is, how do you pay traders the same amount they lose since DEX only earns from swapping fees?

[SquirrelJulietGarden]

Solution:
We're creating a DEX that addresses this issue with a unique exchange credit mechanism. This feature allows traders who get liquidated to recover their funds, provided they continue trading on our platform. This way, we help traders stay in the game despite short-term market volatility.

Liquidations, forced liquidations are to bring benefit to the trading platforms and winners in the market. If people got forced liquidations, money gone and they only have very few part of initial capital back for trading. They can decide to continue their trading in general or trading with leverages again but after one or two or some forced liquidations, they must learn something about risk of leverage and already experienced massive loss by themselves.

Your information is confusing for me, as how do people continue to trade with very small money left after a forced liquidation. They can trade, as money is still there just smaller, but if they want to trade with bigger money, they must leverage it again. That again raises the risk bar and they will probably be liquidated again.

It's not a safe solution.

[slaman29]

Better still is to give tools to players that tell them exactly what price the token they're buying will liquidate their positions, with the amounts they have.

Then the tool also shows percentage drop of that.

And then finally, it gives them total times that percentage drop has happened for that coin.

This gives traders a real picture of the ACTUAL RISK they are taking. No DEX or CEX does this.

[junhyun82]

Hello Community Members,

I wanted to share an update regarding the Primedex project. Thank you sincerely for all your kind replies and comments on this project.

After careful consideration, I’ve decided to pause the project to realign my focus and resources.

For those unfamiliar, Primedex was designed to enhance the blockchain space through its innovative exchange credit mechanism. This system aimed to protect users from significant losses by providing every user with "full credit" for their trading losses. Essentially, users could trade again the following month on the decentralized exchange without being financially penalized for past losses.

While the project is on hold for now, I am still open to exploring future collaborations and discussing new opportunities. If any of you are interested in potential co-founder roles or early team positions for future projects, please feel free to reach out via DM. I’d be delighted to explore any synergies or ideas that align with this vision.

Thank you once again for your support and feedback on Primedex. I look forward to connecting with you and exploring new ventures in the future.

Best regards

[Wapfika]

Solution:
We're creating a DEX that addresses this issue with a unique exchange credit mechanism. This feature allows traders who get liquidated to recover their funds, provided they continue trading on our platform. This way, we help traders stay in the game despite short-term market volatility.

Too good to be true. But this will be a selling point on your DEX if liquidation during market spike will be refunded. The condition for receiving a refund is bit vague, will the user received refund immediately or they will received in the future as long as they continue trading?

Who will shoulder this refund since your liquidity pool will consist of users fund too because your DEX. I said this is too good to be true because you are offering a DEX which means everything is done without your control.

[junhyun82]

Hello there. Thanks for asking for clarification on the concept. Apologies for not being too detailed.

The condition for receiving a refund is bit vague, will the user received refund immediately or they will received in the future as long as they continue trading?

-> How the Exchange Credit System Works

Our system features a centralized database that tracks each trader's monthly profit and loss (PnL). This PnL data is visible to the trader - which is a familiar feature for those who trade on CEXes

Here's how the credit mechanism operates:

Loss Recording: Any trading losses are recorded as "credit" and applied to the trader's account for the following month. For example, if a trader incurs a $10,000 loss in one month, they receive $10,000 in credit for the next month.

Credit Usage: This credit can be used for 1:1 matched trading. The trader can combine this credit with new trading funds. For instance, with $10,000 in credit and an additional $10,000 in new funds, the trader can have a total trading position of $20,000.

Leverage: The total trading position can be leveraged. For example, with a 5x leverage, a $20,000 position would effectively become $100,000.

Credit Terms: The credit cannot be withdrawn and expires at the end of the month. It essentially provides free leverage for trading activities.


Who will shoulder this refund since your liquidity pool will consist of users fund too because your DEX. I said this is too good to be true because you are offering a DEX which means everything is done without your control.

> Addressing Liquidity and Credit Concerns

Thank you for raising this important question about liquidity and the feasibility of providing trading credits on a decentralized exchange (DEX).

Handling Exchange Credits in a Decentralized Environment
Liquidity Management: The provision of exchange credits does not involve directly manipulating liquidity pools. Instead, credits are handled at the account level, with no direct impact on the liquidity provided by other users.

Credit Mechanics: Credits are recorded and tracked within our system and are applied to individual trader accounts. When a trader incurs a loss, the corresponding credit is recorded for use in the following month. This credit is for trading purposes only and does not affect the liquidity pool directly.

Operational Integrity: Since the DEX operates without centralized control, the credits are managed through smart contracts and automated processes. The system ensures that credits are applied and utilized according to predefined rules without directly impacting liquidity or requiring intervention in the liquidity pools.

Risk Management: The model is designed to provide trading credits as a form of incentive to encourage trading activity. The credits offer leverage but do not alter the fundamental operation of the DEX or its liquidity dynamics.