EMDX is a decentralized derivative exchange that focuses on bringing traditional assets into the web3 environment and enhancing cross-fi liquidity. $EDMX is its ERC-20 native token launched on Ethereum.
The main value proposition of EMDX is to give users a unique trading experience through a One-Stop Shop where they can find several and highly liquid derivative products. Perpetual contracts, futures, and spot products are currently available for all types of investors who can execute directional trades, arbitrages or hedging operations in an extremely efficient protocol in terms of market depth and trading fees.
Perpetual swaps
Perpetual swaps (i.e. perpetual futures) are derivative products that allow investors to long or short an asset and to speculate on the future price movements of the underlying. These instruments do not have expiry or settlement. Therefore, they can be held indefinitely without the need to roll over the contracts as they approach expiration. The trading of perpetual contracts is based on an underlying Index Price, and unlike conventional futures, perpetual contracts are often traded at a price that is equal or very similar to spot markets. Deviations between prices are offset through a funding rate mechanism which incentivizes traders to take positions that keep perpetual contract prices in line with spot markets. On EMDX the Index Price of each price is provided by decentralized oracles, while the Mark Price is the last price that comes from the vAMM.
EMDX users will be enabled to execute long or short trades with a leverage up to 10x to maximize the capital usage. Given that the protocol is decentralized and permissionless, users will interact directly with the set of smart contracts through their wallet.
AMM
AMM stands for Automated Market Maker. Within the blockchain environment, AMM´s are liquidity providing botsmethods with the following features:
- algorithmic, because its whole operation is based on pre-programmed calculations that perform deterministic outputs given the same inputs.
- continued, once the AMM is deployed on the blockchain and tokens are stored in it, the liquidity injection is permanently and seamlessly executed.
- autonomous, which means that once it is activated, the execution does not stop and does not need human intervention.
AMM & Synthetics AMM
The market making model based on a decentralized AMM consists of a mathematical function calculated on top of the assets supplied as liquidity by the users of the protocol. The price function will depend on how much of each token was added/removed by liquidity providers from the liquidity pool.
On a synthetic constant function or vAMM there is no need to actually add or remove tokens from a liquidity pool, thus, a swap is not actually executed. The price discovery function is performed by the vAMM contract, based on the size, direction and leverage of each new open position.
Among the advantages offered by the EMDX's vAMM, we can mention:
- allows to avoid the infamous impermanent loss.
- creates continue liquidity.
- does not need liquidity providers.
