Leveraged zero fee trading is a unique use case for BBD tokens introduced by Blockchain Board of Derivatives. To better understand this use case, let us start right from the origins of trading!
Trading or exchanging value amongst each other has always been around since the advent of time and human beings have evolved with trade being a central part of their lives.
Exchanging value with each other was enabled by the dawn of the barter system. This exchange of goods and services provided significant value to the community. However, this was a complicated process. The supply and demand requirements of any particular exchange of goods and services were disproportionate.
Eventually, this led to the rise of the currency. Currency, a seemingly made up object had a certain value inside a community. It could be used to buy goods or services without the need for a barter. However, outside of a particular community, it had no value.
Communities grew larger over time which gave birth to kingdoms. These kingdoms took up the job of regulating the trade of goods and services. They had exclusive control over the currency and demanded fees from its citizens in the form of taxes. These taxes were demanded by the kingdoms to keep everything in order and maintain fair trade. The citizens of kingdoms willingly agreed as this opened doors to trades across kingdoms.
In these scenarios we see, as a small knit community, nobody had to pay taxes to maintain the currency. It was a trusted network where everyone in the network was fair and just. As time went on, bad actors came into play and taxes were a necessary evil.
Jump to present time, the invention of Bitcoin changed the way trustless transactions took place over the internet. One could now depend on a trustless network of computers to fairly execute a transaction and get rewarded for their efforts. This reward is merely a negligible fraction of the transaction. The miners that facilitate the transaction also get a fraction of the mining pool. This was a breakthrough in itself.
Most exchanges that operate in the Cryptocurrency space have been making a killing in fees. Exchanges that provide leverage upto 100x and some even 125x do this as more leverage means more fees. Most exchanges go against the very idea of blockchain and cryptocurrency. They wouldn’t openly tell you this but most exchanges control all your funds. You can read about these exchanges and the timeline of hacks here.
This is where BBOD comes to the rescue. Our team at BBOD firmly believes to uphold the sanctity of the blockchain. We believe in the idea of a decentralized economy and we can talk about hours at end on Blockchain and its applications. We have also implemented a non custodial solution that settles P&L on the Blockchain. Transparent & honest – the way we like it.
We see high fees being an minor inconvenience to some traders and to the idea of a free trade marketplace. We decided to address this by introducing Leveraged Zero Fee trading at BBOD.
The way this would work is, all traders that hold BBD tokens can trade the Leveraged Zero / TUSD contracts on BBOD for free!
All zero fee contracts have a suffix of Zero in the contract and they are named as BTC Zero / TUSD, ETH Zero / TUSD and so on.
To understand how zero fee trading works, let us consider a simple example here.
In the BTC / TUSD contract, collateral is the underlying TUSD and your P&L settlement is calculated in TUSD.
In the BTC Zero / TUSD contract, the collateral required is BBD tokens. Your P&L settlements are calculated in the form of BBD tokens.
Suppose the BTC / TUSD contract is trading at 7000. The price of the BTC Zero / TUSD contract would be also approximately at 7000.
To open a position of 1 BTC at 7000 in the BTC / TUSD contract leveraged at 50x, you need atleast 140 TUSD. This is the 2% initial margin required.
To open a position of 1 BTC at 7000 in the BTC Zero / TUSD contract leveraged at 50x, you would also need atleast 140 BBD tokens. This is the same 2% initial margin required as shown for the BTC / TUSD contract.
To understand the working of Zero Fee in more detail, read our in depth description on the working of Zero Fee Contracts!
To avail zero fee trading, traders must buy BBD tokens. This is bound to increase the demand and value of BBD tokens as the total supply is capped.
Most trading platforms are do not support zero fee trading. But Blockchain Board of Derivatives believes in the power of the community and has created a platform that has more emphasis on value, less on fees.
BBOD’s vision is inline with the decentralized architecture of Blockchain. BBOD’s aim is to create a platform where you don’t pay obscene amounts in fees. A platform where the exchange does not trade against your positions. A platform where you can experience transparency and honesty.
Leveraged zero fee trading is a pretty cool use case of BBD tokens. We would love to hear your thoughts about it!
These are a few of the zero fee contracts you can trade right away!
BTC/TUSD Zero Fee Contract (leverage upto 50x) – https://bbod.io/platform/symbol/CFX/BBD/BTC
ETH/TUSD Zero Fee Contract (leverage upto 50x) – https://bbod.io/platform/symbol/CFX/BBD/ETH
BBD/TUSD Spot Market – https://bbod.io/platform/symbol/SPOT/TUSD/BBD
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