INJECTIVE PROTOCOL: BUSINESS INTELIGENCE, Compared with Bitmex, FTX, Binance Futures.
The adoption of blockchain technology continues to increase across variety of industries: logistics, supply chains, traditional asset classes such as real estate, merchant, and consumer payment systems, and asset trading platforms. There is an expectation, whether innate or overt, that blockchain or distributed ledger technologies (DLT) will eventually become the standard channel for completing transactions and transferring value. By removing the financial and time burdens caused by intermediaries, auto-executed, and auto enforced smart contracts provide a trusted method for peer-to-peer exchange at a cost that is lower cost than traditional channels.
While there are multiple exchanges available throughout several different geographic locations, there are still major gaps in functionality across these exchanges. Some of the key issues in existing trading exchanges include security issues, lack of liquidity, latency problems, and a severely limited selection of automated functions — all features that traders expect. The high cost of transactions that occurred on this platforms. Why the high cost of withdrawal fees and so many more questions. Liquidity is also another issue. Account liquidation is synonymous to most of these trading platforms. A good look at trading platforms which are categorized into two types.
CEX AND DEX;
Distributed Exchanges (CEX) make up the majority of the space. Distributed exchanges use a single access point website through a URL within your browser; on a distributed exchange, all funds are deposited into a wallet or small series of wallets which are fully owned and controlled by the cryptocurrency exchange.
WHILE Decentralized Exchanges (DEX) are the alternative approach to distributed exchanges. DEX’s are a lot more flexible since they are fully-decentralized and run through a series of nodes. In this model, all transactions occur “on chain” so deposits, withdrawals, and even trades are subject to long wait times due to the number of confirmations needed to (officially) complete a transaction, this also means that there are much higher transaction fees since each transaction is subject to a network’s gas and transaction fees.
Within these Exchanges, there are various means of trading: SPOT, DERIVATIVES (FUTURES), PERPETUAL, OTC AND SO ON while the DEX exchanges allows peer to peer trading as related to crypto currencies.
A quick look at these trading methods. According to investopedia, a top learning investment platform.
SPOT Market: The spot market is where financial instruments, such as commodities, currencies and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument. Most CEX exchanges conducts spots. Binance, bittex, etc.
Derivatives Market: a derivative market is a market that derives part of its value form the value of the underlying assets involves in the trading. The derivative itself is a contract between two or more parties, and the derivative derives its price from fluctuations in the underlying asset.
Futures Market: Futures Market or contracts are standardized agreements that typically trade on an exchange where an agreement is reached between a buyer and seller on an asset at a future date. Most crypto currency exchanges has established future trading markets on their platforms. BINANCE futures, BITMEX futures, Okex futures, Huobi futures.
How does crypto currency platforms apply these models on their platform?
Starting with bitmex, the bitmex platform offers contracts (perpetual and Futures) and Leverage trading. These mode of trading are highly risky and traders as they will always remind traders. You are responsible for your trading strategy with little or no means of funds recovery when accounts is been liquidated. The perpetual contracts is less risky because it does not requires expire date and it is little bit similar to spot trading while the future trading require an expiry date which must be filled between two trading parties. The leverage risk is been determine by your leverage setting and could be costly. High leverage leads to high risk and low leverage leads to low risk.
No matter what trading pattern you choose on bitmex, you are 100% entitled to the outcome of the trade. The cryptocurrenies trade is highly volatile and funds can vanished within seconds. It has been discovered that BITMEX is the number one trading place with the highest occurrence of account liquidity. A proof that accounts are vulnerable to trade loss. Traders are at risk of losing to the detriment of the platform owners. The more accounts getting liquidated, the more the owners is getting richer.
The binance platform offers multiple aspect of trading options. Spot(margin, OTC ,P2P) and Derivatives( perpetual Futures, quarterly and leveraging). All these options can be executed in the binance platform.
How are they related?
Your funds must be deposited on the exchange before executing any trade. You are entitled to your pattern of trade and your funds are vulnerable to attacks, risk trading and account liquidation when you lose a trade.
One good thing about these two platforms is that Newbies are HIGHLY advised to stay clear of these trading options OR stick to spot or P2P trading which are easier to learn and execute.
WHY AND THE ADVANTAGE OF INJECTIVE PROTOCOL OVER THESE TRADING PLATFORM.
1; injective protocol is decentralized and you trade from your wallet. Meaning you are in total control of your funds. Some of these exchanges trading volumes are controlled by bots and no matter what. Bots have influence on liquidity and trading volume but DEX has no bots to control trading volumes. Also injective protocol will implore a mechanism to control liquidity aggregation on its platform. It has been discovered that Most decentralized exchanges that supports liquidity aggregation might favors some certain traders. To do this, they presented a liquidity option with incentives but high gas fees. This might leads to trade collisions. This alone questions the decentralized nature of these exchanges.
A Relayer is what matches orders in exchanges. Both centralized and decentralized exchanges allows relayers to settle batch trading. There are flaws in this because trading firms and cooperative business do engaged in predictive trading. A means of diverting favorable trade orders to them. In this case, the injective protocol will provide a unique on-chain settlement logic pattern that will establishes a fair sequences of incoming orders, thereby resolving collisions and front-running. This will be accomplished by using a publicity verifiable proof of elapsed time construction using verifiable delay functions which allows seamless liquidity sharing between relayers. With this, multiple DEX protocols settling trades and liquidities will benefit in a decentralized and trustless fashion.
Another important thing to Note in Injective protocol is the introduction of the FRONT RUNNING PROOF. A means of wedging away predators from intercepting trades on the platform. A unique feature first of its kind to be implemented on the exchange.
The injective protocol Is currently running a bounty campaign on bitcointalk. This is a means of introducing the project to the crypto community. interested minds are can join and help to spread the information across. You can partake through this link https://bitcointalk.org/index.php?topic=5256993.0
With the incessant attacks on centralized trading platforms, DEX has been a better trading option for trading. But also trading in DEX looks as if it is been manipulated by top and high profile traders with huge amount of money leaving individuals with funds to suffer. The injective protocol platform has offered a leveraging trading platform that can accommodate everyone both rich and poor. There is a welcome development and I urge everyone to invest in injective and don’t miss out.
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