Checking Out b0x Protocol, The Decentralized Margin Protocol

b0x is another margin lending protocol I’ve been checking out.

It’s similar to others I wrote about, dYdX and Lendroid.

Below I check out b0x and the differences between them and dYdX and Lendroid.

b0x is a decentralized margin lending protocol and liquidation oracle marketplace on the Ethereum blockchain.

It’s building off the 0x relay standard and will include a library, portal, and smart contracts. The smart contracts facilitate the on-chain margin lending. The library will provide all the functions needed to interact with b0x contracts. And the portal will serve as the front-end for users.

You can actually check out an alpha of the portal from the website.

b0x is unique in that it’s creating its own oracle called the b0xOracle. With b0xOracle, bounty hunters keep track of all open trades taken using b0x. When a bounty hunter has determined that a position has gone below margin maintenance, they call into b0x to liquidate the trade with b0xOracle.

b0x will also create an oracle marketplace where oracle providers compete. The competition should result in the lowest possible cost with the highest reliability.

It will all run on BOX tokens. There no ICO date yet but they are putting together the whitelist for the presale.

The main difference between b0x and dYdX is the oracle. dYdX allows the lender to either act as their own oracle or to plug-in a third-party solution. There is no protocol-level support as with b0xOracle. Further, there’s no competition among oracles like in b0x to protect against premature liquidations.

Both Lendroid and b0x are modeled on 0x so they have significant overlaps. Like b0x, Lendroid also offers its own oracle solution. In b0x, those that manage margin calls are called bounty hunters. In Lendroid they’re called wranglers. The difference is in how they are paid.

While the b0xOracle collects fees on the interest collected by lenders and uses them to incentivize bounty hunters, Lendroid requires that borrowers stake LST tokens as a deposit that can be forfeited to wranglers should the account be authorized for liquidation. This method favors lenders as they are able to keep a greater portion of the interest. It also adds a point of friction as Lendroid users need to purchase LST tokens.

To learn more about b0x check out the whitepaper.

One thing I didn’t like about b0x is the team appears to be relatively unexperienced and there’s no major backers.

Plus, they face major competition from the likes of dYdX and Lendroid.

If you have any thoughts on b0x, dYdX, or Lendroid please share.

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