bZx (BZRX) is a set of smart contracts built on Atrium Blockchain that allows users to borrow cryptocurrencies or trade marginally without relying on third parties.
Crypto tokens have been widely criticized for their high-risk applications, but new DeFi applications have overcome these problems. One of the platforms that have tried to reduce the risk-taking challenges in the cryptocurrency industry is bZX with the BZRX token.
Protocols such as Compound and MakerDAO are used to create loans and have integrated tokens in the kernel. But how to borrow in these systems?
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Whether trading in the margin or borrowing currency, every trader in the cryptocurrency market is limited to centralized exchanges. With these types of exchanges, margin traders or lenders who want to finance the rest are at risk of being hacked, regulatory uncertainty, and mismanagement. On the other hand, decentralized exchanges have a better chance of protecting users’ information from such problems.
What is bZx (BZRX)?
The bZx protocol is a set of smart contracts built on the Ethereum blockchain. This protocol has a particular focus on lending and margin trading, and its procedure is the same as dYdX. The main difference between the two protocols is the inherent use of tokens in bZx. There are three primary tokens in this protocol: iTokens, pTokens, and BZRX. All three are built to ERC20 standards and play an essential role in protocol routines and the bZx protocol was developed in August 2017. They were created by two people named Tom Bean and Kile Kistner.
In February 2018, the bZx protocol was introduced. About a month later, bZx raised nearly $ 7.8 million in its ICO and sold BZRX tokens to users. In June 2019, the Fulcrum platform, which is the central part of bZx exchanges, was launched, and in October of the same year, Torque, the lending system of this protocol, was established.
Main features
The bZx protocol is an iTokens and pTokens based lending system. When users lend or borrow assets in bZx, their crypto enters the jihadist liquidity pools of the shared assets of other exchanges. The lender automatically receives iTokens when the lender provides assets for the global liquidity pool. These tokens are a type of stock or demand that displays their assets in global pools and automatically generates demand rates for its shareholders. iTokens can be withdrawn at any time as the main asset plus the claimed profit.
A user will automatically receive pTokens when a user borrows an asset or opens a trading margin position. The letter p in pTokens means position and indicates short or long positions. Users receive different tokens based on their assets and position. For example, creating a long position on ETH / DAI with a 4X lever can generate a dLETH4x token. The value of pToken varies based on the initial value of the borrowed asset over a different time.
The bZx protocol was also designed to use the BZRX token, which was initially available to users. This token is currently only used to pay for the protocol. Other trading processes for BZRX are still unavailable.
The BZRX token is used as voting for governance software to determine the protocol path. A function that is still under development also gives BZRX shareholders a bZx premium.
How do you get hold of bZx tokens?
The BZRX token was only available through the initial bZx offering and cannot be traded at this time. But iTokens and pToknes tokens can be changed in decentralized exchanges like Uniswap and Kyber or obtained through the Fulcrum and Torque interfaces.
How does bZx work?
The best way to use bZx is through Fulcrum and Torque. In the following, we will examine the way both fronts work.
Fulcrum
Fulcrum allows you to margin trading or borrow crypto assets through bZx smart contracts. You will be given iTokens tokens for borrowing and pTokens for trading margins when you use this platform. No additional fees or registration are required. You can connect to the decentralized application and perform operations through Metamask and Ethereum wallets.
Torque
Because Fulcrum is limited to borrowing tokens for transactions, Torque allows users to borrow assets for whatever they like. This platform is not similar to other digital asset borrowing protocols such as Compound, which works with variable demand rates. The demand rate is fixed so that installments or repayments are predictable.
Conclusion
DeFi applications have made many improvements, and the use of tokens has made it possible to run more complex processes. The process has also enabled automated trading products by combining TokenSets with iTokens interest earning. There are many applications for the bZx protocol that can be done through the three primary tokens iTokens, pTokens, and BZRX. The bZx protocol provides one of the best ways to lend digital assets.