It is a decentralized margin lending protocol & liquidation oracle marketplace on the Ethereum blockchain. BZx is built on Ethereum and integrated with the 0x protocol. It is the first fully decentralized, peer-to-peer margin funding and trading protocol.
It is not itself an exchange, but a protocol that can be integrated into the current exchange infrastructure. Exchanges and relays are incentivized by fees denominated in the BzX protocol token (BZX) to offer decentralized margin lending and margin trading services. Assets are valued and liquidated via competing oracle providers. By decoupling the valuation and liquidation of assets from the protocol, the oracle marketplace approach allows competition to drive the oracle provider fee to its marginal cost while encouraging experimentation and flexibility.
One of the persistent contradictions of the cryptocurrency space has been the theme of decentralized assets traded on centralized exchanges.
In the wake of the 0x revolution, a new generation of decentralized exchanges (DEXs) are taking root. These decentralized exchanges address some of the existing problems with older DEXs, while still lacking the capabilities of many of the leading centralized exchanges. Individuals looking to engage in margin lending or margin trading are still forced to funnel their liquidity to centralized token and coin exchanges, exposing them to an additional form of counterparty risk.
Counterparty risk is encountered when the risk of a third party defaulting jeopardizes the assets of an investor. Margin lending exposes the lender to counterparty risk both from the exchanges and the borrower. The specific type of avoidable counterparty risk incurred by lenders and borrowers using centralized exchanges is called custodial risk; allowing individuals to maintain control of the private keys to their wallets at all times obviates this risk. Lenders face additional counterparty risk from underwater borrowers who fail to be liquidated in time.
Decentralized margin comes with significant technical challenges. The most significant challenge is the design of a reliable oracle that can match the settlement security of centralized exchanges. In the context of margin lending, the oracle problem is caused because Ethereum contracts are not natively aware of asset prices on or off the blockchain. If smart contracts can’t stay aware of asset prices on the open market, they can’t consistently force-liquidate borrowers on that market to protect lenders from adverse movements. The most serious obstacle to decentralized margin lending is being able to reliably and securely liquidate troubled positions. The b0x protocol serves as an on-chain solution to these challenges.
THREE MAIN COMPONENTS BZX
bZx.js Library: the Javascript library used to integrate b0x to existing relays and exchanges, and create the front end interface for users to access funding on decentralized Exchanges.
bZx Portal: a separate web-based dApp, a front end for the b0x network alternative to accessing the platform through an existing exchange. Through this portal, lenders and traders can make and take orders and manage their loans.
The bZx portal is a decentralized web application that serves as a frontend for the b0x protocol. It makes use of the b0x.js library, and it is the shop for people who will like to make use of the b0x protocol for lending and trading purposes.
b0x Smart Contracts: the smart contract protocols responsible for managing funds, orders, and facilitating a decentralized governance structure of the platform.
These components form the b0x protocol layer, which is complemented by the Oracle layer. This is the service that monitors and manages the status of funds in margin accounts, liquidating funds should it be necessary. bZx will begin with their own Oracle, but third party developers will be able to develop improved Oracle solutions, which can be plugged in for use on the b0x network.
The bZx token
The bZx token is a full utility token that serves two major functions:
– The promotion and enhancement of order book aggregation through relays
– The full control and governance of the bZx protocol
The token works for the b0x protocol in the same way the ZRX token works for the 0x protocol. The primary function of both tokens is to coordinate networks of rational economic agents around a protocol. All of this is done in a hope to facilitate the addition of continuous, decentralized updates to the protocol.
Most people prefer to go for Aragon and multi-signature wallet arrangements when looking for token governance in this space, and this usually leads to a DAO. However, the developers of the b0x token have made a commitment to seek out feedback from the community, especially as they have reportedly been in the search for an upgradable DAO, and information regarding the governance plans for the b0x token will be released to potential investors before the crowdsale.
As for the distribution of the tokens, there will be 1 billion tokens available. Five hundred million of those tokens will be available at the presale, at which point each token will go for 7.3 cents. The presale hard cap will be $7.3 million, and the hard cap at the crowdsale is expected to be $29.22 million (thereby bringing the total hard cap to $36.5 million).
ROADMAP 2018
Q1
MVP bZx portal
MVP bZx.js
MVP b0x smart contracts deployed to Ropsten Ethereum testnet
Margin lending
0x exchange integration
BZx oracle integration with kyper network
3rd party oracle support
Q2
Security audits
BZx smart contracts deployed to Ethereum mainnet
BZx taker – Alpha
Q3
Cross chain assets landing – alpha
BZx maker wallet – alpha
Token governance upgrade
Q4
Security audits for b0xmaker
B0xmaker wallet – beta
Cross chain assets landing – beta
TEAM
- Tom Bean – Co-Founder
- Kyle Kistner – Co-Founder
3 Adrian Li – Frontend Developer - Yuri Eliezer – Lead Counsel of the Founders Legal team
- Casey Fallon – Senior Designer
CONCLUSION
BZx Network is showing clear signs that it would disrupt the market in a great way and now is the best time to key into it.
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