Hello, everyone, and welcome to the club.
I can see MarginX is with us, at least the main account.
I just approved your request to speak, MarginX.
And I can see the mute icon, so you should be able to speak.
This is Danny from MarginX.
Welcome to the club, man.
Great to finally get this thing off the ground.
You guys are definitely shooting for the stars over there.
We're trying our best to try to give something very good to the Cosmos community.
Is there anyone else we should invite?
I can see Opputent is here now.
Is there anyone we should have as speaker as well before we get...
He's also the co-contributor of MarginX.
I think he just requested.
He should be able to speak momentarily.
Yeah, I did the mistake once where I didn't invite everybody who needed to speak.
And then 15 minutes in, someone said, hey, could you please accept?
I can see it's 2 p.m. at least where I'm sitting here in Copenhagen.
So welcome, everyone, to the Cosmos Club, where we talk all things Cosmos.
We tweet daily about what's going on.
And then we invite interesting, fascinating, hardworking builders from the Cosmos SQL system.
And today, for the first time, we are honored to have MarginX with us, with Danny and Shin.
Welcome, guys, to the club.
It's an honor to be here.
So while people are settling in, as many people probably know already, we'd like to take a little bit of a personal touch
how you guys ended up building, working for MarginX.
So, yeah, tell us your story, guys.
People come from all walks of life in crypto and in Cosmos.
Some people are technical.
Some people are more financial.
So my story, I think, is a bit just like everyone else.
So I was in the space in 2017.
So my background is a bit of law and accounting and finance.
And I sort of like in 2015, then after my graduation from my university, so I went to a payment route called Pundi Pundi, started in Indonesia.
And then in 2017, I co-founded this project called Pundi X.
And it's a crypto point of sales project.
So right now, I think it's still active in the space.
And they are doing pretty good in Latin America and Turkey and some other countries as well.
So, yeah, so I was a big fan of decentralization.
So I studied, I mean, just like I say, my background is a bit of law and accounting and finance.
So I was a bit of anti the traditional banking system.
So I was like, you know, I need my freedom of money.
So that's why I was obsessed of decentralized, decentralization and especially Bitcoin.
So, yeah, so I, like I said, I co-founded a crypto payment.
And then I think in 2021, then I met the rest of the team, so then I would become the core contributors of Margex, which is want to build a fully decentralized, derivative or rather a perpetual exchange.
Yeah, so I don't want to take up too much.
It's quite interesting that most of us didn't come from, you know, the computer science background or the blockchain background.
So Danny came from law and finance.
And I myself, I did a PhD in physics at University of Cambridge.
So it's quite a long way from physics all the way to what I'm doing right now, which is blockchain.
I'm one of the core contributors of Margex as well.
But before joining Margex, I was actually previously the head of data science at Visa, the credit card company.
Yeah, the financial services that Danny said he disliked.
So enemies collaborated and held hands to form Margex.
So I previously worked at Visa for quite a number of years, but I was dabbling in, you know, cryptocurrency and blockchain since the early days.
And last year in 2022, I decided to create my job as the director and head of data science and decided to join Margex full time as a core contributor.
Yeah, and I'm here since then.
I'm a firm believer that blockchain is going to be the biggest technology that will change the world.
As a matter of fact, a fun fact is that when I left the company, actually quite a number of directors left as well, because they also believe that, you know, blockchain is one of the most interesting technology that's going to emerge in the next couple of years.
Yeah, so that's a bit about me.
Visa is doing quite a lot of things in the blockchain, it seems.
At least they're becoming more and more active on Twitter and X and such.
Talking about the use case of blockchain and the use of blockchain in TradFi, payments and all that.
So, yeah, it seems like your former colleagues is turning around also.
I mean, in fact, when I was joining Margex, they were, you know, they were rapidly expanding from during the early days of one or two blockchain experts.
So it used to be the case where, you know, like if any of our clients want to know anything about blockchain, it would go to the same guy.
So, but by the time I left Visa, it was already a team of like 20 and 30 people.
And I think today, now, it's probably even bigger.
So they are definitely into blockchain as well.
So without further ado, I can see people are also settling in and more people are joining into the space.
So what is Margex for anyone who hasn't been paying attention or just doesn't really interest perhaps so much in exchanges, indexes and perpetuals, etc.
So walk us through what is Margex, what are you building over there?
I can start first and then maybe you can add on later.
So I'll give a short version of it.
So Margex is basically just a decentralized exchange, right?
But the twist in it is that we envision a DAX that is unlike any other out there.
First thing, we believe in the freedom to list.
So in Margex, you can think of it as a Uniswap for perpetuals.
Anyone can actually list their pair of tokens there.
As a freedom to invest, anyone can take part in providing liquidity.
You know, very much like, again, like a Uniswap, but not on an AMM model on the limit order book.
So this is the part where I think we are proudest to say that we got an algorithm called ALO, A-L-O.
And that's where we actually transport, you know, the benefits and the advantages that we see in Uniswap, in AMMs, into a limit order book.
And that's, I think, it's one of the most innovative things that we have done at Margex as well.
I think finally, as well, I think Margex is also a DAX where we believe in trading with a peace of mind, where everything is on chain and your wallet is non-custodial.
So, yeah, in TLDR, we believe, I mean DAX, Margex is a DAX.
But, you know, we emphasize on freedom to lease the tokens, freedom to invest in money and freedom to trade.
And in particular, again, if I haven't mentioned this already, I think our innovative algorithm, ALO, which brings the advantages of AMM into a limit order book exchange.
We hope that this is going to be very transformative and revolutionary in the DeFi space in the next couple of years.
Yeah, if I may, I would like to emphasize because I think Shin emphasized on, you know, the AMM model, the automated limit order book market maker, which is ALO, which is, I mean, our innovative to make every token has the ability to have their own perpetual market.
So, I would like to emphasize on the technical structures as well.
So, basically, Margex is, everyone knows, basically, Cosmos is a multi-chain structure.
So, Margex also inherent that feature as well.
So, our cases is, or rather the specialty of Margex is we emphasize on this thing called one chain, one pair.
So, which means that we will allocate a dedicated chain, a dedicated side chain for every pair.
So, for example, like Bitcoin USDT pair or Ether or Atom USDT pair.
So, each pair actually will be hosted on a chain itself.
So, which means that the performance are isolated, the traffic, the congestion of one chain won't affect the other chain.
But the beauty of that is the liquidity are shared.
So, basically, you can use your liquidity or your funds on BTC chain and then use it to collateral and then use it for another chain or another pair, for example, or Atom.
So, I think these two things are like our innovative.
So, one pair, one chain and then the LO, which is the automated limit order book.
And just for anyone out there who's confused about the term perpetual exchange, basically, we are talking about futures contracts.
Perpetuals is a type of futures contract with no expiry date.
Typically, for the futures contract, you have an expiry date.
You're agreeing to pay a certain price or sell at a certain price at a future date, an expiry date.
Perpetuals just run in perpetuity forever, in a way.
It's becoming more and more popular.
It's getting popularized by many exchanges.
But, obviously, there's a few also now in the decentralized realm with particularly big DEXs like DYDX coming to Cosmos also.
Also, GMX in Arbitrum, who's been massively successful in the past one or two years.
So, yeah, maybe that begs the question.
How is marginX different from DYDX?
It's obviously extremely interesting to compare to because they're moving to Cosmos, but also something like GMX on Arbitrum.
Yeah, I can start it off.
Again, I think the main difference that we want to talk about is the LO.
I think perhaps we can dig a little bit deeper, right?
Because I think there might be some audience out there that is not familiar with this term.
So, LO, A-L-O, stands for Automated Limit Audible.
Now, why do we think it's a game changer?
Basically, if you think about the last five years in DeFi space, what has been evergreen?
In my opinion, it has been Uniswap.
And why has Uniswap been so successful in the last five years?
Mainly because, you know, we have this very elegant, simple formula XY equals K that governs everything, right?
And it also governs everything from the way you trade, the spread that you get.
And anyone can basically just put in a pair of tokens.
And immediately, you can start exchanging these tokens.
And it's very beneficial not only to the people who want to trade the tokens,
but also beneficial to the people who want to actually, developers who actually want to lease their tokens,
you know, for expanding, for developing a project.
But the problem is this kind of facility doesn't really exist in a Limit Audible concept, right?
For Limit Audible concepts, we immediately think of the biggest play out there, the big brand out there, which is Binance.
But then not anyone can lease the tokens in Binance because you have to go through a lot of security,
a lot of KYC, a lot of all these problems.
And it doesn't go through like the Uniswap where everyone with a pair of tokens can just lease.
You don't have that luxury.
And then on the other end of the things is that, you know, in AMM with XY equals K,
you just put in a pair of tokens and the spread and the price is determined by that.
But in Limit Audible, you can't do that, right?
Because all the orders have to be pre-listed, pre-determined, you know, your ask orders, your bid orders.
It has to be pre-listed on the Audible itself, right?
It's not pre-determined by any algorithm.
And this is why ALO is very innovative, right?
We actually combine the best of both of us.
We bring the advantage of the AMM, the freedom for anyone to lease their tokens,
the freedom for anyone to really trade on it.
But we bring it to the Limit Audible exchange.
Now, the last question you might ask is that, then why do we even bother with Limit Audible, right?
So, for those uninitiated out there, you know, you might trade a lot on AMM.
But trust me, AMM, most of the time, you're not trading at the best price.
Because a lot of it, like as I mentioned to you, the price is determined by XY equals K,
which basically means that you have no full control of exactly what price you're going to buy or sell.
Now, the beauty of Limit Audible is that if I say I want to place a Limit Audible to buy Bitcoin at $27,000, for example,
it only gets executed when the price hits $27,000.
So, in a way, if you take it from this point of view, Limit Audible actually gives you the true zero impact exchange, right?
Compared to a lot of exchange out there.
Because with Limit Audible, you can actually buy and sell at exactly the price that you want.
And if the price doesn't hit there, then your trade doesn't execute.
Sorry, I took a bit long to explain this because I think for the uninitiated out there,
it's important to know our train of thoughts, how we ended up thinking, you know,
developing this ALO and why we think it's revolutionary.
And, you know, and the whole process of why we think importing that advantage of AMM into a Limit Audible is so crucial,
especially to the DeFi world.
Yeah, I guess that's my view on this one.
I don't know if Danny has anything to expand on this.
So, yeah, I think Shin made a very valid point and then I think explained pretty clear.
But I have something to add on.
So, I think what really difference between DYDX or even GMX and Earth and MargeX is one of the main things,
the key issue is the permissionless listing.
So, just like Unistop, you can lease whatever you want, like whatever perpetual pass you want,
as long as, you know, you provide the liquidity.
That is so different with, you know, DYDX and GMX.
And then the other thing is the order book.
Why Limit Order Book, from my perspective, is pretty, is suitable or it fits the perpetual markets
or rather the derivative markets.
One thing is the derivative markets doesn't really, you know, when you trade the derivative that you just open a position,
then you need to close the positions to really realize your profit or loss.
So, in that case, if you do it on a MM model or borrowing lending model, just like GMX,
so the counterparty will be the borrower or rather the traders.
So, if the traders, if it doesn't release the positions, the funds will be stays there forever.
So, it actually underutilizes so-called capital efficiencies.
But in Limit Order Book, once we have an open position, then we have a position where we can allow,
the automated Limit Order Book, we will put that particular position on the order book
to allow the other market participants to try or to close the positions or to take over.
So, in this case, our perception of marginX change to what we keep emphasizing is the freedom to list and freedom to trade.
So, everyone can trade their positions and list their perpetual markets permissionless or rather freely.
So, I think this is one of the main key features.
And the third one, like I mentioned, is the fully decentralization.
So, everything, every bit, for example, the order book, the liquidations, all happens on-chain.
So, the order book will be on-chain.
That's why we need to build on Margex or rather the Cosmos ecosystems
because each chain right now needs to be processed 4 to 5 million transactions a day.
So, I think that will be the main differences between us and DYDX and GMX.
I can't help but think about how the whole DEX space is evolving.
So, as you say multiple times, the AMM model has been sort of dominant with Uniswap first and foremost,
but many other DEXs out there have the approach where they implement AMM first and foremost.
But more and more, you start seeing DEXs, decentralized exchanges that has an order book first.
Kojira in Cosmos, for example, comes to mind with FIN, the order book that they have built into the Kojira protocol.
Now, they extend it to an AMM as well.
But it's interesting to see how the two approaches, you know, when you build a DEX,
whether it's going to be an AMM model or an order book model, is starting to converge into one.
Well, that begs the question, at least in my head, will more and more exchanges and builders of DEXs,
will they start deploying perpetual exchanges like you guys are doing?
What are the benefits of doing that, perhaps?
Because you start to see these DEXs coming up, which are massively successful with huge volumes, TYGX.
I mean, you know, just look at the volumes that they have.
It's staggering numbers, right?
So, do you think that more and more DEXs will move to a perpetual perp exchange model?
Or how do you guys see the space evolve, basically?
Yeah, so let me try to start first.
Just one comment I have, right?
You mentioned Kujira as well.
But I just want to point that there are a lot of...
So when we embark on this model, a lot of people say that, you know,
DEXs have already done it, someone has already done it.
But if you do a deep research, which I have done,
As far as my research shows, none of the platforms out there actually has our Alloy algorithm, right?
Like, for example, Kujira, it's more like a hybrid AMM model
rather than a true limit order book.
So on MartinX, we are a true 100% limit order book exchange,
but on the principles of AMM, right?
We don't have any AMM, Uniswap order books to even start with, right?
Our entire order book is limited order book.
It's just that we incorporate the principles of AMM into that,
which is why I think that makes us unique.
So I just want to make that comment.
And to answer your question, what I think the future would look like,
I definitely think that the future of DeFi has to go from, number one,
from AMM to limit order book for reasons I've mentioned earlier.
The hardcore traders, you know, we always talk about DeFi, you know,
conquering over TradeFi, but the traditional finance.
But we won't be able to do that until we have a very efficient exchange, right?
And to have a very efficient exchange, that means you have to have a limit order book
because AMM, as good as it is, its inefficiency is pretty obvious, right?
So on this end, I think the future is that more and more exchange will try to make it happen
on the limit order book, and we certainly believe that LO is going to be the game changer,
which a lot of people out there is going to start adopting our algorithm as well.
To your second part of the question, which is where do we see,
whether we see a lot of the trends going towards perpetuals.
Again, I think my answer to that is affirmative.
I think the future of trading is going to, we're going to have more and more perpetuals.
And the volume is only going to get bigger and bigger.
Obviously, perpetuals cannot exist by itself.
You know, sports trading is still going to be there.
But I think that it makes a lot of sense for people to trade perpetuals.
Because if you think about it, the way you can establish smart contracts,
the way you can establish leverage, the way you can open a position and hold on to it,
this makes a lot of sense for traders, especially for perhaps young Dijan traders.
Because, you know, I think it's very alluring to the young Dijan traders to have this kind of features,
which basically, well, blockchain and cryptocurrency being the technology of the future,
these are the audiences that will start adopting, you know, the 20 years old or the early 30 years old.
These are the people that we think will be the adopters, the full adopters of blockchain, right?
And which is why I think the attributes of perpetuals will be very attractive to this group of people.
And which is also why I think I agree with your statement that going into the future,
I think perpetual contracts is going to take hold.
It definitely looks like it.
And that's also why I asked the question from experts like yourself,
because it's not the first time that I hear new exchanges or existing exchanges considering deploying,
not just spot trading, but also futures contracts and perpetual trading in particular.
So let me ask you this, because that brings me to a question of setup or technology or stack or whatever we want to call it.
Because obviously, okay, so GMX is deployed in a labyrinth room, at least initially, that's their claim to fame initially.
DYDX has been historically super focused on deploying on Ethereum, StockNet and all these different layer twos.
And you guys are set up, built on FunctionX, which some people might know, some people might not.
FunctionX is an app chain built on Cosmos.
But yeah, talk to us about that, perhaps why you decided to build on FunctionX
and what FunctionX brings in terms of advantages in the first place.
I think I can take this one.
So for those unfamiliar, so FunctionX is actually a specific derivative app chain that built on Cosmos SDK.
I think it has been around since 2019 or 2020.
So yeah, so I think it's a high performance derivative chain.
So their so-called mission is to provide a high performance trading derivative such as perpetual order books.
So, I mean, back to the special features of Cosmos, which is the multi-structure.
So that's FunctionX has inherited from the Cosmos ecosystem and SDK as well.
So, because we want to do Margex as Margex, we want to do fully on-chain or purely on-chain.
It means everything like liquidations, you submit your positions, you want to close your positions,
or you want to settle the funding rate, everything.
We want it to be settled and can be shown and can be traced on-chain.
So we run a test before we launch it.
So a normal so-called order book on-chain transactions will take at least 4 to 5 million transactions alone for just one pair.
So when we talk about, you know, 4 to 5 million transactions a day just for one pair,
so what is going to happen if we release 10 pairs?
So back then, in 2021, I mean, I think still until right now, there's none.
Like none of the main or mainstream blockchain out there can satisfy the requirement,
which means that if you have 5, if you have 10 pairs, which means that daily we need to have 40 to 50 million transactions a day,
which I think, you know, the main blockchains will be collapsed.
And FunctionX, like I mentioned before, so it's a specific derivative app chain.
Then they provide all this so-called multi-chain structure.
So that allows us to have a dedicated chain for every single trading pairs on it.
So that's the reason why we decided to, I mean, for technical structure-wise,
we select FunctionX as our main blockchain structure to be deployed.
It's great to see builders in Cosmos, both from the get-go building on Cosmos Tech,
but also, of course, chains migrating to, or dApps migrating to build their own app chain like DYDX.
Perpetuals in general is lacking in the Cosmos DeFi ecosystem.
So let's make sure to make up for that.
So talk to us a little bit about the roadmap.
I mean, people have been listening for half an hour now,
and it's always nice to have a little bit of a feature list, if you will, to look forward to.
So what's on the roadmap for you guys?
Yeah, Danny can elaborate on that.
But I guess the general roadmap that we are looking at at MarginX is that we're going to launch AL on the testnet
and then follow up on the mainnet on the Cosmos ecosystem.
I think our first objective would be to absorb as many LP tokens as we can from the Cosmos ecosystem through IPC.
As Danny mentioned earlier, one of the unique features of our MarginX is that we accept LP tokens
to be deposited into our system to be used as collateral and then start trading.
But eventually, I think the second phase would be that we will also consider accepting liquidity from Ethereum and other EVM chains.
But for the details of the roadmap, I think that's also available on our website
with all the minute details.
Danny might want to expand on this one.
Yeah, so I think one of the other features other than ALO, which is an automated limit order book,
we also do want to sort of like revitalize those idle assets.
So, our first kind of assets is we want to revitalize these LP tokens.
So, basically, when users or market participants, they provide liquidity on Osmosis.
So, in return, they will get a LP token.
So, we want to revitalize it.
So, users can actually collateral their LP tokens and then use it to solve, like provide liquidity
or even create perpetual pairs for whatever perpetual pairs they want.
So, for example, me, myself, I provide Atom USDC in Osmosis.
So, in return, I will have a so-called LP token from Osmosis.
So, then I can go cross-chain to IDCs to Margex and then I collateral my so-called Atom USDC LP tokens
and then I will use that stablecoin which collateral from the LP token
and then use it to provide liquidity for Atom Perpetual Pair.
So, that is something we want to launch it.
And then, so, the roadmap will be not only to, you know, to satisfy the V1 or V2 ALO or Mainnet.
So, we also want to attract as much, as many as LP tokens and other asset classes like NFTs in the future, you know,
to go through and then try to enlarge our TVLs and revitalize those idle assets.
Because I think right now it's bear market though.
So, we want to do it, there's no fresh money from out there.
So, I think that's something we can do to sort of like to expand and then to create more utility on our LP tokens.
Yeah, no, I just want to echo that.
That was a very good point I forgot to mention, right?
Like, then we spoke about this, right?
We call it about supercharging our idle assets.
So, a lot of these assets are sitting there idle.
And we actually provide an avenue for you to supercharge it by leveraging it and using it for something else
that could be more interesting, even more profitable.
So, yeah, I just want to say that I agree with you.
Thanks for pointing that out because I forgot about that.
It's a lot of things to look forward to and a lot of things getting filled out.
And I think that's a good segue into some of the questions from the community.
There's a lot of interest from the community.
That's always a great sign.
And I think a good one to fit into the conversation at this point is from Crypto Isaac,
who is asking about the challenges that you guys have faced in translating the AMM principles
into the limit order book, LOP exchange model that you sort of morphed together with ALO.
So, how did you overcome that?
How did you overcome the, I guess, translating in terms of the technicalities of it, but also in communicating this?
Because it's a tough concept to wrap your head around.
There's a lot of benefits to it, as you explained on this space already.
But, yeah, how did you overcome this translating the ALO model?
I can think of this question.
I was involved in a lot of, you know, a lot of the development of this ALO algorithm.
But in actual fact, there was a lot of discussion and research that has gone through between me and Danny, as well as the wider team.
And I have actually written a Medium article.
You can see that on our blog, Marginx blog, which tries to explain all the challenges.
Actually, not all of the challenges because there's just too many challenges.
The key challenges that we face when translating the AMM principles into the limit order book.
But, so, for those who really want to know more, you can refer to that article or, you know, reach out to me.
But what I would do here is, you know, I will mention one of the challenges which I myself find most interesting, right?
And that is the temporal challenge.
What I mean by the temporal challenge is you imagine that in limit order book exchange,
the ask and bid price needs to be constantly refreshed to reflect the current prices, right?
So, for those of you who have traded on limit order book, such as Binance before, you look at Audible,
you can see that it keeps on flickering, you know, and it keeps on changing to center itself across the Mark price or the Oracle price.
So, these are the things that you see on limit order book, but you don't see this on AMM, right?
So, AMM is static, right?
It's at any point of time anyone wants to trade, it just takes the equation X, Y equals to K,
and it works out how much you should be getting for this amount of Bitcoin that you want to trade,
how much you're getting for it.
It's at any point of time, right?
Because in AMM, you cannot trade a future value, right?
So, let's say if the current Bitcoin value is $27,000, on AMM, you can't say that,
yeah, I want to trade AMM when it reaches $29,000 and what would the spread be?
It just doesn't work that way.
So, for me, the biggest challenge is the temporal issue of how do you address this situation where AMM is kind of static when it comes to price,
or static is a bit negative, I guess it's instantaneous when it comes to determination of the price
and determination of what the spread should be when you're trying to buy or sell a pair of tokens.
But LOB, as I mentioned, the advantage of Limit Audible is its precision, right?
Its ability to reflect also instantaneously, but not so much on the price, but actually on the demand and supply, right?
Whether there's someone willing to buy your Bitcoin at $28,000 when the current price is really at $27,000, right?
And how do we reflect this disparity between AMMs and LOB on it, right?
So, for me, that was the biggest challenge, and we work out a lot of models.
To be fair, there are a lot of ways you can try to interpolate this problem or try to extend this problem,
but you have to find a way which you think is the fairest to everyone.
And the other problem that we face in translating, which I also find interesting,
is I think Danny mentioned it earlier, that for perpetual contracts, we have...
And again, you realize that a lot of people out there, they say they have done this, right?
What we have done, they haven't, because we are doing this for perpetuals.
And the difficulty for perpetuals is that, as Danny mentioned, whenever you start a trade,
whenever you open a position, you only realize the profit when you close that position, right?
So, if you think about this in terms of AMM, XY equals to K,
X and Y refers to the reserves of token A and token B.
But then the problem is, you have opened a position, you haven't closed it.
So, does that mean your X reserve has reduced already or not?
Or do you wait for it to be closed before you take away the reserves?
And if you wait for the position to be closed before you modify the value of X,
which reflects the reserves, then you have the problem which Danny mentioned,
that your funds are literally stuck in this exchange until someone's willing to take up your position, right?
So, we felt that was unfair.
And that's why in margin X, you can trade it as though it's limit order book, right?
We have a way where we can circumvent this problem, where you can open position and close position,
just like any other perpetuals limit order book exchange out there that you can find.
But yet, it is a price and a spread that is determined by the AMM principles.
So, yeah, you guys could go through the article or reach out to me separately.
To be honest, it's a very interesting issue that both Danny and I find very intriguing.
And it's a tough challenge to explain, but I think you guys are doing a wonderful job.
Because Shin wrote the articles, and then she also, like I said,
he did the heavy lifting on develop the air load algorithm.
So, I mean, from a layman's perspective, so it's just like, okay, when we trade on sports, right?
So, it's just, you know, I buy my tokens.
So, I use my stables to buy tokens.
Then, you know, after I got my tokens, right, the transaction is done.
But perpetual is just different, or rather the futures is just different.
So, when you want to buy something, you first need to open the positions.
So, when you open the positions, you need to find a time or find an opportunity to close it.
Then, after that, you need to close the positions to realize the profit or loss.
So, I think the best part, or rather the most challenging part is, how would you handle the positions?
So, that's the main, or rather the key questions, why that's none of the other DeFi or the other developers or other protocols
didn't, you know, have the chance to develop all this M&M, or rather the automated limit order book for perpetuals.
I think this is one of them.
And then, the second challenge, from my perspective, is the Oracle price.
So, remember just now, we mentioned we want to take in idle assets, such as Laopi tokens.
So, one thing, why the other exchange, or rather central exchange, couldn't just lease whatever perpetual tokens they have won.
I think one of the main issues, or the key issue, is that they couldn't get the so-called price Oracle.
So, in Margex, we use, because like I said, like we keep mentioning, Margex is a permissionless perpetual market.
You can lease whatever we want.
And in order to do that, we need to find a reliable price Oracle to handle that issue.
So, and in our cases, we will use LP tokens.
So, we will have an algorithm, you know, and then we will calculate, or rather the LP token portions and read the liquidity pool of that particular LP to read the price.
So, I think these two are the main challenges, how we handle the positions, when the audit field.
And then, the second thing is how we handle the price Oracle.
So, these two, I think, are the main challenges.
Of course, there are a lot that, you know, please read Chin's Medium article if you have time.
And I think that is a great segue into another community question revolving around security and scalability.
We talk a lot about price discovery.
You mentioned price Oracles, for example.
Price efficiency, which is obviously a key problem to solve when it comes to being a DEX and exchange in general.
But talk to us about scalability.
You mentioned that a little bit also with FunctionX, but in particular, security, because obviously, people are getting more and more scared of all these different hacks happening all over crypto, really.
So, how can people feel safe about using MarginX?
I can start first and, yeah, and see if anyone can expand on it.
So, my take, so I had a few Twitter space myself, you know, within MarginX that talks about security on blockchain technologies.
My views are always that most of the hacks on blockchains, they are not inherent or not intrinsic to the technology itself.
It's about people misplacing their seed trays, people leaving their passwords in, you know, in open air, in public spaces, or having some error in your codes.
Majority of the hacks occurs at you.
But I'm not saying, I'm not giving excuses, right?
Like, the technology should do better to where even such exploits are difficult or at least rare.
But I think this kind of hacks will dramatically reduce over the coming years as the technology starts to mature and possibly with, you know, zero knowledge coming in, that would further improve the situation.
So, in terms of hacks, I think we need to be clear that most of it is due to human error.
But again, like I said, there's no excuse.
We as the technologists, as the developers, we should still develop fail-safe protocols to even minimize the possibility of human making mistakes, right?
Such as the conundrum that a developer face.
But the remainder 5% or 10% of hacks, but if you think about it, the entire reason why blockchain exists is exactly to eliminate, right, this kind of hacks where a single bad actor can wreak havoc onto financial systems.
And that's no different from what's on margin X because we are built on a blockchain technology.
So, we have all that security in place, you know, to prevent this kind of hacks.
Now, to break this down further, a lot of the hacks occur because a lot of DEXs out there claim to be DEX decentralized.
But when you scrutinize them, they're not fully decentralized because an exchange has a lot of different components, right?
You can say I have a non-custodial wallet, therefore I'm a DEX.
But that's not entirely true, right?
Because if your audiobook is not on chain, your audiobook can be hacked.
And then even if your audiobook is on chain, then the next question is your settlement engine might not be on chain, and that can be hacked.
So, at margin X, we try to make everything as decentralized as possible.
Danny mentioned this at the very beginning of our conversation that whether it's the settlement engine, whether it comes to the non-custodial wallet, whether it comes to the audiobook, everything's on chain.
We try to do everything on chain.
It's a remarkable fit that our developer is able to develop this, and yet it remains as efficient as any other DEX out there.
So, to answer your question in short, is that putting everything on chain, I think certainly makes margin X much more secure.
As for the scalability, again, the fact that we are built on the Cosmos platform, it makes it the fact that we are using a multi-chain architecture, which means that we can use one chain for one pair of tokens.
That makes us, in theory, at least, that our scalability to be infinite, because we can just add on more and more chain as we go along.
But having said all that, the caveat is there must be some point of weakness in any system.
And as I mentioned, the weakness is the point where blockchain connects to a system that's outside its blockchain.
And I guess for me, like margin X, the biggest vulnerability would be its oracle price, because if you will, that is the window from margin X peering to the outside world.
So, we have an enormous amount of experience, and so we hope that with all the protocols and the securities that we put in place, we hope that that would not be manipulated.
But we learn as we go along, and we will continue to improve on it.
But yeah, nothing is foolproof in this world, not even in a trade fight.
So, yeah, that's my two cents on this.
This is the way of building.
You iterate, you build on top, you improve, and repeat.
Yeah, that's exactly how it works.
And speaking of that, speaking of continuous integrations and iterations, building a better version each day, how does margin X look like long term?
We tend to think very short term.
We'll be in crypto in particular.
You know, what are we going to ship the next month, the next quarter, the next half year?
We never ask ourselves, what are we going to look like, you know, five years from now, 10 years from now, 15 years from now, even.
So, if you are to answer this question, and I know it's a next to impossible question to answer, really, because who knows how crypto as an industry looks like five years from now, 10 years from now.
But if you were still to answer your sort of dream of margin X, how it looks like long term, how would margin X then look like?
Yeah, I think I will take this.
I think I'll leave the bulk of this vision thing to Danny, because he's quite visionary, at least in my short time working with him.
But in my opinion, I just want to point out one thing, right?
When we launch margin X, a lot of people ask us, why did we not launch a token, right?
And it's not an oversight on our behalf, it's actually intentional, right?
We believe that a lot of the exchanges out there, they launch something, then they issue a token.
And then the whole idea is that if the exchange do well in the short term, the tokens inflate in price, they sell the token, they make a profit.
And then the founder, who knows what happens after that, they don't quite care about it.
If they do care, it's a plus, if they don't, they just run away with your money, right?
Which is to your point, that is the short term, a lot of the blockchain players are aiming for the short term gain.
The fact that we don't even think about this, right, it was by intention that we did not launch any token, I think shows our commitment that we are here for the long term, right?
We are not here to build something and run away.
We want to keep on, as you mentioned earlier, we want to keep on develop, iterate, build throughout the whole period and grow together with the blockchain sphere in the next couple of years.
We don't believe in having a token because that will divert our attention towards finding ways to inflate the token or whatsoever, right?
Or we'll be too worried if the token is too low whatsoever, right?
So we don't have that distraction.
We are very focused on building a product that's better, iterating a product that is getting better and better over time.
So I think I just want to point it out that that shows our commitment to a long term value.
So, yeah, so if you, if you want to, I mean, like, like you say, no one knows what's really, you know, happening on the blockchain industry in the next five to 10 years.
So, so I guess from my point of view, I guess if, if I may, you know, let's say in three years time.
So I think if, if everything is going, is going smoothly and then like what we intended, Margex will become a, a, a, a Uniswap, an audible Uniswap, but for perpetual markets.
So, so everyone can, you know, lease the tokens or rather the, the, the perpetuals and the relative markets they want, like any, any perpetuals, just like Uniswap.
So, so, so we, we really want to, so, so like implement this, uh, decentralizations, um, to, to Margex.
So, and, uh, and in, let's say in five years time probably will be a compliant, uh, Uniswap, I guess.
So, so everyone, like I said, um, you know, we, we, we, we, we can reduce the, the hacking issues and then probably some custody, try to, uh, get the funds, uh, you know,
and, and, and try to get the, the, the, the recognitions and acknowledgement from the regulators, but well, uh, maintain the so-called, the, the, the, the censorship resistance.
So I think, uh, that's Margex, what, what, what, that's how we envision, uh, what Margex will be look like in five to, you know, three to five years time.
And, uh, having a long-term view is, uh, paramount to, uh, to succeed, obviously, in this space.
But also to build up a community.
And I know you guys have some interesting things to, uh, that you're doing, uh, building up a community with a referral program.
So what can you talk to us about that?
Uh, both the referral program, but also the community building that you guys are doing.
So I, I think I can take this.
So, so, um, so, uh, if you look at our websites, uh, we, we, we have some, uh, referral programs.
So, so users, I mean, if you, if you are like a marketing affiliate, so if you invite users, then you can have the commission kickback.
So, so for whoever you invited, then you can have it.
Then we even have a so-called NFT, uh, Margex Alliance NFT.
So that would be your memberships.
So these are the things, uh, you know, if you want to, if you are the marketing affiliates or traders, then that would be something that, uh, might benefit you.
If you, if you can, uh, trade on, uh, Margex and even invite your friends, uh, or your, your, your members, team members or group members to, to come over to trade on Margex.
So, uh, for the community building wise, um, I think, uh, we are trying to expense, um, we are trying to expense our, our so-called influence, um, I mean, outside our own community.
So, I mean, I think one of the, the, the, one of the, the things we will be doing is, uh, we want to, you know, penetrate that, uh, to the cosmos.
And so, so we have a, uh, Twitter space with cosmos clubs, um, and then we'll be attending, uh, the Cosmoverse, uh, next month, uh, in Istanbul as well.
So, so we, and then, uh, other than that, uh, we're also doing, uh, some collaborations, uh, like the LP token staking.
Uh, so we'll, we are right now in, uh, in talk with some other projects, uh, such as, uh, Atoms, such as Kava, such as Kronos, uh, and some other so-called, uh, Cosmos family as well.
So, and, um, and then I, I think, uh, providing them a, another exit or revitalizing their idle assets, uh, from the other community, uh, from the other cosmos-based community, um, we will help them, uh,
uh, benefit, uh, and, and, uh, stay together, uh, more firm.
That's, uh, that's my, my, my, my talk.
And, uh, this was a question, by the way, from Titanic, who I can see also is participating in this space.
Um, and the reason why we blended in all these community questions already is because of the giveaway that you guys have.
You mentioned Cosmoverse also.
So perhaps you guys can spill the beans here on the, on the, on the giveaway that you guys are doing with the, with this space also.
We should have probably said that in the beginning, but for those patient souls, I think they deserve to know by now.
So, uh, do you want to talk about the, uh, the giveaway on the, uh, on the Cosmoverse, uh, entry passes that you guys, uh, were mentioning prior to the space?
Or how do you want to, how do you want to announce it?
Um, yeah, I think we will announce it, uh, later.
We have the information on our Twitter.
So you can check that on our Twitter.
It's, uh, two, three, and three pass to Cosmoverse.
And I think that's a great segue to, uh, to sort of throw the baton back to the community.
So you talked about how you are building up a strong community around your perpetual exchange with MarginX.
Um, so that begs the question, what can we do as a community to make sure that you guys succeed?
Uh, you guys are doing giveaways.
You guys are participating in the community with Cosmoverse, for example.
We need to follow you on Twitter, of course.
Uh, you already mentioned that you had some announcement there on the giveaway, but yeah.
What can we do as a community in Cosmoverse to, uh, to help you guys?
Uh, I think the most important bit is to spread the word.
Um, because, um, Danny and I, we both believe, uh, what we have here.
It's, um, it's, it's a really good product.
It's quite, um, innovative and revolutionary.
Uh, but sometimes in, in the blockchain world, uh, you know, um, uh, news doesn't get spread far enough.
Uh, it gets drawn out by a lot of, uh, hype about, um, um, odd coins maybe.
And, and those who are really building good products that could potentially change, um, the, um, the blockchain technology and this is, uh, and the blockchain community in the whole sometimes gets drawn out.
Uh, so, uh, I think if that's one thing, then I hope the community can help us to do is really just to spread the word, right?
Um, try to go to our website, understand what Allo is about, how we could do, how to supercharge your, your ideal asset.
If you have any questions at all, any question at all, just feel free to reach out to Danny or I.
Yeah, uh, the other thing is, um, I, I think, I, I don't like this, but apparently these days, uh, people are judging or evaluating, uh, DeFi projects by their TVL, right?
So, so, I mean, Allo, I, I, like Shin said, is, uh, I, I mean, from my point of view, it's a revolutionary, um, tools and then protocol.
So, so, so we can really help to revitalize and reutilize, um, your ideal assets such as LLP tokens and, um, and then you can create, um, so-called a perpetual futures market, uh, for, for Cosmos-based, uh, tokens.
So, like I said, um, I mean, if you guys notice, um, normally if the, the markets is, is fluctuating, um, the, the, the, the, the, the trading volume of perpetual markets is normally a few times.
And, and sometimes 10 times of spots, then, um, you, that, that, that will create a, a pretty liquid markets for, uh, whatever the asset that is.
So, so I think if you have, uh, so-called a, a, a, a LLP tokens or idle assets, you know, feel free to, to, to, to try it.
I mean, it's, it's all on the Cosmos, uh, ecosystem, just a normal IBC crossing will do.
Listen, this has been great.
Uh, so glad we, uh, we made this happen.
It's, uh, really exciting to see, uh, perpetual exchanges coming to Cosmos finally, uh, being built on, uh, I would say native, quote unquote, app chains built on Cosmos.
So, uh, so well done, guys.
Uh, before we close this thing off, is there anything we left out?
Is there anything that, uh, you want to leave the community with today before we, before we close this thing off?
Yeah, um, so we will announce our, uh, our testnet, uh, on tomorrow.
So, yeah, please, um, take a look and, and tell us, uh, if you have any, you know, comments and questions.
And, uh, and then during the, uh, our testnet, um, period, and, uh, we will, we will actually also recruiting, uh, so-called DeFi champion.
So, we would like to, to hear, like, your feedback after using, uh, our products.
And, uh, please follow, uh, Marjack's Twitter.
Then, uh, we will have all this, uh, DeFi champion, testnet, and even the giveaway.
I was just, uh, waiting if, uh, Danny was, uh, was, uh, going to say something.
But, yeah, guys, uh, we will definitely make sure to tweet it out also when, uh, when you launch.
And, uh, in general, just keep a close eye on, uh, what you guys are announcing.
And, uh, share it, uh, spread it far and wide to, uh, to make sure you guys get the adoption that you deserve.
So, yeah, again, thank you so much.
MarginX, Danny, Shin, for coming on tonight.
And I'm sure this is not the last time that we hear from you guys.