At present, most of decentralized derivatives have many disadvantages such as Non-Chinese operating system, high operating threshold, high transaction fee, inaccurate currency price display and vulnerability of hacker attack.
It also restricts the development and expansion of decentralized derivatives
If there is a project that solves all of these problems, it could become a dark horse in the decentralized derivatives racetrack, gaining even greater potential.
0xCFD is one of this project.
Interestingly, in 0xCFD, CFD stands for Contract for Difference, which can be explained as Margin Contract.
Contract for Difference is a contract between a buyer and a seller for a price difference. Reuters Financial Dictionary defines Contract for Difference as: generally refers to no exchange of physical commodities or securities, but the difference between the settlement price and the contract price as cash settlement.
In the traditional financial market, CFD trading mode often has many advantages, such as high efficiency of capital utilization and the opportunity to make profits regardless of the market rise or fall.
The 0x in 0xCFD refers to the 0x project which is an Ethereum-based open source project for decentralized transactions. The project created by Ethereum smart contracts, allows anyone to start a decentralized exchange.
Named by the combination of 0x and CFD, 0xCFD is the first derivative trading platform to implement CFD model of traditional financial markets through decentralized smart contracts.
0xCFD is a decentralized leveraged contract trading system that supports leveraged trading, non-spot delivery, and balanced user experience and trading performance on a decentralized basis. It is positioned as “UniSwap” of derivatives trading, aiming to help users regain control of assets and pursue various characteristics such as decentralization, automatic market making and composability.
0xCFD has many advantages over other decentralized derivatives such as dYdX.
At first, it is the reduction of the operating threshold.
As shown above, Heco can guarantee the speed of each transaction of 0xCFD, while the Gas fee is negligible, and the operation interface of freely switching between Chinese and English enables more users to participate in it.
The impact of this is not a simple barrier to entry, but an important issue for the entire DeFi ecological playability. With a transaction as low as 0xCFD, DeFi’s composability and playability can be greatly exploited.
Therefore, in the 0xCFD ecosystem, users are not only having contract operations, 0xCFD also launched token mining for the majority of users play.
Users only need to register/recommend to get rewards, have a contract transaction, or use the token for liquid mining or market making to get different amounts of ZCFD token rewards.
The rewards for test mining can be mapped to real tokens.
As market making, 0xCFD also has its own stunts.
Compared to other DeFi projects, 0xCFD’s Automated Mark-Making (AMM) model adopts a single-currency liquidity model and supports undercapitalized collateral in conjunction with a risk control model, making it easier for liquidity providers to deal with exposure and manage volatile losses.
Unlike conventional contract products, 0xCFD also uses the Hybrid Price Feeds (HPF) mechanism of on-chain Oracle and off-chain authoritative market provider.
This not only ensures the accuracy of the market trend on 0xCFD, but also minimizes the risk of the vulnerability of the prognoser by using the on-chain and off-chain dual reference.
In addition, 0xCFD also supports leveraged trades up to 200 times.
t 0xCFD, the positions of all contracts are monitored by the operator’s risk control system. If the margin balance of a position falls below the maintenance margin, any operator can send a trade to the contract to trigger a forced liquidation, thereby protecting the user’s assets effectively .
It is worth noting that, in order to take care of the new user experience, 0xCFD will also give users a free amount of HT to pay for Gas when they sign up, as well as 100 million test tokens to familiarise users with the gameplay of the contract.
Heco is only a temporary solution for 0xCFD, and its ultimate goal is to expand the ETH 2.0 Layer 2 to provide a better experience for users.
At present, 0xCFD is still in the early stage of development. Currently, there are many opportunities to participate, and the space is large, which is very suitable for players to enter. Early participants in DeFi projects are often highly profitable, and 0xCFD provides such opportunity.