What is OpenLeverage (OLE)?

This article will cover the basic knowledge of the Permissionless Margin Trading Protocol OpenLeverage.

Building DeFi

As per our report for last week, DeFi tokens were the biggest losers in Q2 2022. But that doesn’t stop true buidlers from moving forward.

OpenLeverage has been one of the most awaited DeFi projects, being around since last year and exploring a new, undiscovered aspect of DeFi. That is the reason behind OpenLeverage‘s continuous growth: The number of its users has soared by 749%, transactions by 195% and volume by 26% in the last 30 days - a very rocky period for the whole market.

What OpenLeverage Offers

The two main products introduced by OpenLeverage include Margin Trading and Lend To Earn, which will be discussed in detail right below.

Margin Trading

Margin Trading is basically trading with borrowed funds. OpenLeverage‘s smart contracts interact with major DEXs such as Uniswap, PancakeSwap, SushiSwap, etc.; its users therefore can have access to thousands of trading pairs, as long as they are listed on those DEXs. Of course users will need to pay a 0.22% fee for OpenLeverage‘s services, in addition to the transaction fees collected by DEXs. 80% of this fee is used for insurance and staking rewards.

There are three things to consider when traders open a leveraged position on OpenLeverage:

(1) Collateral Rati Collateral ratio varies between pairs due to the difference in their volatility. However, traders only need to deposit collateral at a bare minimum to borrow the necessary funds. Remember that collateral ratio will be calculated using real-time price data from DEXs.

(2) Maximum Leverage: Leverage is available within the range from 1.1X to 2.4X. However, the recommended maximum leverage is given by:

Max. Leverage = 1/(Collateral Ratio * 1.66)

(3) Interest Rate: When you borrow from the lending pool, it’s justified that you pay lenders an interest rate. Similar to Collateral Ratio, Interest Rate will change in accordance with changes in the utilisation rate of the lending pool. The interest rate will be annualised for easy tracking.

Lend to Earn

OpenLeverage offers various solutions to protect lenders, i.e. liquidity providers, from external risks. One big concern for DeFi protocols is flash loan attack, which will be controlled with borrowing and repayment taking place on separate blocks.

The interest rate model is created in a way that when the pool utilisation is low, interest rates are kept at reasonable levels, but surpassing a distinctive point in utilisation and interest rates will increase much faster. That allows lenders to earn nice profits and the insurance fund will be constantly refilled to cover for unwanted losses in case they happen.

How is OpenLeverage different?

OpenLeverage is not necessarily a futures/derivatives-only DEX. Normally, margin trading has close ties with futures trading, but OpenLeverage creates leverage opportunities for even spot transactions.

Moreover, as OpenLeverage integrates with major DEXs, its users will not have to worry about liquidity or market depth and can really count on a seamless trading experience. Most importantly, there are pairs that may not yet be listed on CEXs - there are still arbitrage opportunities - OpenLeverage users can now participate in more risky but appealing spot deals and maximise their profits.

Tokenomics

The team behind OpenLeverage has decided to release two types of token: the main utility token OLE and the governance token xOLE. xOLE can be created by providing liquidity for the OLE-BUSD pair.

Specification

Token Ticker: $OLE

Contract Address: $OLE has been deployed to Ethereum, BNB Chain and KuCoin Community Chain.

Allocation

OLE has an initial supply of 1,000,000,000 (1 billion tokens). An inflation rate of 3% annually will apply for OLE after five years of vesting.

The allocation of OLE is decided as follows:

Initial Supply: 1,000,000,000 OLE

Ecosystem and Development Treasury: 9.6%

DAO Treasury: 45%

Investors: 28.4%

Team: 17%

Trading OLE on Bitget Spot Trading

The new trading pair OLEUSDT has recently been added to Bitget Spot Trading, alongside the exclusive prize pool of US$10,000 to celebrate this event!

Bitget is proud to be one of the most trusted crypto exchanges thanks to the focus on security and compliance. We have made every effort to provide top-notch customer protection by getting operational licence from three different authorities - the U.S., Canada and Australia, and at the same time adhering to local regulations to conduct uninterrupted operations across the globe.

Bitget has additionally set the bar very high for security standards. A combination of hot and cold wallets, validated by giants in security tech: Suntwin Technology, Qingsong Cloud Security, HEAP, Armors, is implemented to protect the exchange from potential attacks. Users are always advised to turn on the two-factor authentication (2FA) for their own accounts to actively enhance the security settings on Bitget.

To no surprise, Bitget receives an A+ ranking for 12 SSL indicators, together with genuine appreciation from the crypto community: more than 2 million loyal users from 50 countries generate over US$7 billion in trading volume daily!

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