Creating a new type of DEX for leverage trading. Need suggestions/feedback

[Stan314]

Hey, everyone, I'm an experienced solidity developer and crypto trader/investor. In the past, I rarely used centralized exchanges, especially after the release of Uniswap. However, for leveraged trading, CEXes were the only viable option for a long time. With recent events like the FTX failure and ongoing regulatory pressures, I've noticed an increasing number of traders who have never touched DEXes starting to trade on platforms like DYDX and GMX.

While there is clearly some demand, I do see some potential issues with the current offerings. DYDX is a 100% CEX based on a proprietary protocol, and GMX operates as a liquidity pool where you are essentially trading against the casino. While everything works fine when you lose, I worry about what will happen to the pool if every single trader starts winning during a bull run. This is why I've been developing a protocol that can leverage liquidity from the entire market, similar to platforms like 1inch and Matcha, for leveraged trading up to x10.

To ensure that the protocol meets the needs of potential users, I'd love to get your feedback on the following questions:

If you are already using DYDX, GMX, or any other DEX protocol that allows trading with leverage, what important features are you missing?

If you're currently using a CEX for leveraged trading, such as Bybit or Binance Futures, what is preventing you from using DYDX, GMX, or similar DEXes?

Let's imagine that you're able to use an ideal DEX for leveraged trading. What features would it include, and on what principles would it be based?

I'm looking forward to hearing your thoughts and suggestions, and I appreciate your time and input!

[dansus021]

I always like play on DeFi what the missing from leverage DeX is the choice of coin and the user, If you can bring up more coin/token it can be an alternative for CeX and Bring a lot of users.

I'm never personally trading on Leverage Dex but I know some of it. Maybe you can do leverage trading with less confirmation from metamask.

[nimvinhquang9a4]

some important features that traders may be missing on existing DEX protocols for leveraged trading are:

Higher leverage options: Some traders may prefer higher leverage options than what is currently offered by existing DEX protocols.
More trading pairs: Some traders may need more trading pairs to diversify their portfolio or to trade with less popular tokens.
Lower fees: Some traders may find the fees associated with using DEX protocols for leveraged trading to be too high.
User-friendly interface: Some traders may find the user interface of existing DEX protocols to be difficult to navigate or understand, which could be a barrier to entry.

some factors that may be preventing traders from using DEX protocols for leveraged trading include:

Limited liquidity: Some DEX protocols may not have enough liquidity to support the high volume of leveraged trading, which could lead to slippage and other issues.
Limited leverage options: As mentioned earlier, some traders may prefer higher leverage options than what is currently offered by existing DEX protocols.
Trading fees: Some traders may find that the trading fees associated with DEX protocols for leveraged trading are higher than what is offered by centralized exchanges.
Trading experience: Traders who are used to using centralized exchanges for leveraged trading may find it difficult to transition to a DEX protocol, especially if they are not familiar with the decentralized ecosystem.

an ideal DEX protocol for leveraged trading would likely include the following features:

High liquidity: The protocol should have a deep and liquid order book to ensure that traders can execute trades quickly and at competitive prices.
High leverage options: The protocol should offer a range of leverage options to cater to different trading strategies and risk profiles.
Low fees: The protocol should offer competitive trading fees to attract traders and incentivize trading volume.
User-friendly interface: The protocol should have an intuitive and user-friendly interface to make it easy for traders to navigate and execute trades.
Security: The protocol should have robust security features to protect user funds and prevent hacking attempts.
Transparency: The protocol should be transparent in its operation and governance, with clear rules and guidelines that are publicly available for all users.
Community-driven: The protocol should be community-driven, with a strong focus on decentralization and governance by token holders.

I hope this feedback helps you in developing your leveraged trading protocol. Good luck with your project!

[bittraffic]

Will the protocol you are developing be open-source so that all DEX can actually use it as well?  There are many that will likely be interested as well.

I have not actually tried DYDX for leverage trading. If x10 is enough for the DEX not to be bankrupt when everyone wins in the bull market then it is good for all anxious users to add more funds when they are losing.

[merekamo]

Regarding your questions, I've personally not yet both DYDX and GMX for leveraged trading, and I think they are great platforms. But, I has research and I will suggest some room for improvement.

For instance, I think it would be great if the platform could offer a wider range of assets to trade with leverage. Currently, these platforms have limited offerings in terms of assets that can be traded with leverage.

As for using a CEX for leveraged trading, I think the main issue for many traders is the high fees and the potential for regulatory scrutiny. These are valid concerns, and I can understand why some people might prefer to use a DEX instead.

If I could use an ideal DEX for leveraged trading, it would have to be a platform that is secure, user-friendly, and offers a wide range of assets to trade with leverage.

It should also have low fees and be transparent about how it operates. Additionally, it would be great if the platform could leverage liquidity from the entire market to ensure that traders have access to the best possible prices.