Introducing MYX — Revolutionary Derivatives Protocol

The Era of CEX

During the rise of cryptocurrency, CEX was always the pioneer, contributing significantly to the development of cryptocurrency. They initially provided an entryway for users, gradually adding liquidity for multiple tokens and promoting market activity and growth. Similar to traditional financial markets, they significantly enhanced users’ familiarity with cryptocurrency. Centralized systems easily comply with regulations, increasing the security of user transactions. CEX has played a positive role in promoting the development of the blockchain industry, but its centralized nature also brought along its own drawbacks. Let’s delve into the operational logic of CEX:

The core operational logic of CEX = Capital Sink ↓ (Absorbing Capital Sink) * Profit Margin ↑ (Boosting Profit Margin)

As more players chip away at the centralized pie, constant internal strife among CEX leads to a decrease in the capital sink. When the income from capital sedimentation can’t satisfy the need for profit, exchange operations begin to deteriorate. Exchanges start to devise ways to increase profit margins, including but not limited to: betting against users, profiting from user losses, misappropriating liquidity pools, and manipulating the market with data. Some people, fearful of human progress, vent their resentment and greed before their downfall, leading to constant scandals surrounding CEX. This escalates user distrust, increases operational risk for exchanges, and causes a vicious cycle. Recent regulatory scrutiny of CEX has further eroded user trust. Users now seek mechanisms that provide them full control and transparency over their assets. A large amount of capital and play mechanisms have begun to pour into DEX. The era of DEX has arrived.

CEX in the era of DEX.

DEX, utilizing blockchain technology and smart contracts, eliminates the need for a centralized entity, fulfills financial needs with on-chain protocols, and achieves true peer-to-peer trading. Traders retain complete control over their assets and can trade in a completely decentralized environment. This increases the transparency of transactions and user privacy:

1. Greater transparency: In DEX, all transaction data is public, and every transaction record, including whale trades and potential wash trades, can be queried through a blockchain browser. This level of transparency can provide valuable market information. In contrast, in centralized exchanges, user transaction data is often confidential, thus lacking transparency.
2. Full control of assets by users: In DEX, users need to connect their cryptocurrency wallets to the platform and always maintain control over their funds. This avoids the risk of assets being abused by third parties, enhancing asset security.
3. Censorship resistance and privacy protection: DEX, being a protocol composed of code, rather than a corporate entity, naturally possesses resistance to censorship. Users do not need to undergo KYC verification when using DEX, providing greater privacy protection. In contrast, due to their corporate nature, CEX is subject to laws and regulations of different countries, requiring users to provide personal information during registration.
4. Composability of on-chain assets: The permissionless nature of DEX allows it to act as the underlying liquidity layer, used by other DeFi products. DeFi can either serve as an independent product or provide liquidity for other DeFi products. This grants DEX high composability within the DeFi ecosystem. Meanwhile, asset derivatization is realized; you can pledge assets in lending protocols, trade on DEX, or pledge LP to earn more income. This is like assembling Lego blocks, pushing the development and innovation of the DeFi ecosystem.

Advantages of DEX over CEX in the profit distribution model

With the evolution of blockchain technology and the crypto market, DEX has begun to challenge the traditional profit distribution models of CEX. This emerging trading model redefines the sources and distribution methods of exchange profits in an innovative manner, thereby attracting a plethora of users and developers.

CEX primarily generates profits through transaction fees, withdrawal fees, listing fees, and other service charges. These profits are mainly expended on operating costs, tech R&D, marketing, and shareholder returns. However, the issue with this model is that users can not directly participate in the profit distribution of the exchange. You can not pledge liquidity in CEX to earn the exchange profits.

In contrast, the model of DEX is entirely different. In this model, transactions are fully executed based on smart contracts, eliminating the need for intermediaries. This means users can directly earn from the protocol rather than through the exchange. The primary source of profit for DEX is transaction fees, which are directly distributed to users providing liquidity.

DEXs disrupt the traditional model of CEX by allowing users to participate directly in trading and profit distribution. This not only changes the sources and distribution methods of exchange profits but also offers a new, fairer, and more transparent trading model.

The advantages of MYX over other derivatives DEX.

MYX is a P2Pool2P model decentralized derivative exchange, which uses intelligent rates and exposure hedging mechanisms to ensure protocol stability and provide sustainable high returns. MYX is currently the most efficient DEX in terms of fund usage.

1. Zero slippage with dual Oracle price feed Compared to the order book model, the P2Pool model uses Chainlink’s price feed to achieve zero slippage in trades. As Chainlink has a potential vulnerability to fund attacks, MYX developed a new oracle to verify Chainlink’s price feed, simultaneously using dual oracles for pricing. Trading will be suspended in case of significant discrepancies, making your trades safer and potentially avoiding issues like front-running and oracle attacks.
2. Market adjustment mechanism in extreme conditions Some DEX may lack liquidity in extreme or one-sided market conditions, leading to insufficient open positions for users, and causing significant losses for liquidity providers (LPs) because all LPs act as counterparties to the traders. MYX uses the P2Pool2P model, single-pair LP, and intelligent funding rate to constantly release liquidity, achieving high funds utilization, reducing the risk market conditions pose to LPs, and helping traders seize market opportunities.
3. Intelligent funding rate The side with fewer positions earns the funding rate, while the side with more positions needs to pay the funding rate, encouraging users to open positions on the minority side and restraining opening positions on the majority side to balance long and short positions. The intelligent funding rate adjustment mechanism dynamically adjusts rates according to market supply and demand, ensuring there are enough incentives to attract liquidity providers to continue injecting funds and maintaining market liquidity under extreme market conditions.
4. How does MYX achieve high funds utilization, stable collateral, and high returns? MYX’s MLP (LP stakes) is no longer the counterparty for both long and short positions but acts as the exposure counterparty for both. In the P2Pool2P model, trades are matched, and LP pools will quickly release once there’s a counterparty, temporarily occupying liquidity. If there’s an imbalance in the long and short positions, the funding rate will intelligently adjust in real-time, attracting market makers or professional users to effectively hedge through the external market, aiming to maintain a balanced long and short situation, release liquidity, and realize the reuse of funds. This ensures users can have reasonable positions to trade in extreme market conditions (there are available positions to open) and helps liquidity providers achieve stable returns in any market condition (more stable returns). Simultaneously, it can obtain income from transaction fees, pledge interest rates, and position holding rates to achieve multiple incomes, maximizing the return of MLP stakes (high yield).
5. Lower Transaction Fees: MYX introduced the VIP mechanism, allowing for the lowest transaction fees on-chain.
6. User-friendliness and lower derivatives barriers The user experience and entry threshold for DEX are relatively high. CEX usually offers a better user experience, similar to traditional investors trading stocks, so users can quickly get started. However, MYX greatly lowers the participation threshold through compilable strategies and follow-trading functions. The transparent on-chain mechanism ensures the authenticity of the strategies, allowing everyone to conveniently follow professional operations and benefit from them. At the same time, MYX has a silky smooth user experience similar to CEX, enhancing user-friendliness.

MYX will revolutionize decentralized derivatives.

Decentralized derivative trading began to shine in 2021, and the market size has expanded rapidly within just two years, with top-tier protocols such as dYdX and GMX already surpassing most CEX. However, the share of decentralized exchanges in the derivatives market is currently only 2.72%, indicating that derivative DEX is still in its early stages, with enormous potential for growth. It is expected that the market size of DEX could increase more than tenfold within the next year. This is because DEX offers advantages in terms of asset transparency, user asset control, resistance to censorship/privacy, and on-chain composability compared to centralized derivative exchanges.

Derivatives DEX could potentially lead the next bull market, but they still face issues such as lack of liquidity, high transaction costs, low product usability, and lack of rich features. As you can see, these problems have been resolved in MYX. MYX is set to revolutionize the entire derivatives market by attracting and aggregating liquidity. Its unique mechanism enables a win-win situation for the exchange, users, and market makers. By providing a derivatives trading platform that is highly transparent, strong in user control, resistant to censorship and privacy-protective, rich in on-chain composability, and has strong liquidity and high usability, MYX will change user trading habits and challenge users’ current perception of DEX derivatives. It aims to become the leader of derivatives DEX, the shining star in the DEX universe. Dive in, explore — the world is vast. Welcome to join MYX!