Non-custodial decentralized exchange Dolomite announced that on Nov. 4 it will add a margin trading with stop-loss orders.
The company explained in a press release shared with Cointelegraph that - while its current exchange is based on the Loopring protocol - its margin trading feature will be built on the dYdX protocol.
Per the release, the platform's users will be able to take long positions with up to 5x leverage and short positions with up to 4x leverage from their wallets.
"Dolomite will also be one of the first decentralized exchanges to offer leveraged limit order trades, allowing a leveraged trade to fill only at a certain price. Dolomite is building off of the dYdX margin lending protocol, giving it access to over $30 million in lending liquidity."
Dolomite co-founder and CEO Corey Caplan explained in an exclusive comment to Cointelegraph that dYdX protocol allows the platform to "Seamlessly work with any exchange to open and close positions" and is designed in a modular fashion.
"This allows Dolomite to capture the trade volume from users opening/closing positions. Users are also able to maintain a lower collateralization in comparison with other margin lending protocols, so users can trade with more leverage."
"Dolomite is also uniquely offering Margin Protection which is a stop-loss function that will close your positions on Dolomite before they are liquidated by dYdX. This saves users from losing the entirety of their margin deposit when they open a position. We were only able to add this feature in because of the modularity of their protocol."
Given the apparent relationship between dXdY and decentralized stablecoin DAI, Cointelegraph asked Caplan to illustrate the details of this collaboration.
"We're unsure of their relationship. However, it's likely good considering they are one of the biggest lending protocols surrounding DAI in the ecosystem. DAI is also central to dYdX's lending liquidity and trade volume."
As Cointelegraph reported in late October, entrepreneur and crypto advocate John McAfee has argued for the importance of stablecoins for DEX adoption.
Dolomite DEX to Launch Margin Trading with Stop-Loss Orders
Published on Nov 3, 2019
by Cointele | Published on Coinage
Mentioned in this article
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.