Liquidity through Beyond
Lack of liquidity, high slippage, and inefficient asset pricing are common problems that plagues decentralized exchanges (“DEXs”). While the arrival of Uniswap has solved liquidity issues by having liquidity providers on AMMs, they are prone to being exploited by traders that conducts sandwich attacks on users of Uniswap causing users to experience high slippages and losing funds.
Beyond takes an innovative approach of combining the usual Bid/Ask order book mechanisms with automated market makers to prevent such exploits on the users. As opposed to trading directly with the AMM on Beyond, traders can put up Bid/Ask orders and such orders will only be filled by the AMM if it meets the conditions stated by the traders. A partial fill on their orders may occur if there is insufficient liquidity in the markets but this protects users from sandwich attacks.
Combining AMMs with Bid/Ask order functionality creates a DEX with tighter spreads, no slippage and yet provides the same depth of liquidity that an AMM provides.
Advance trading functionality
A key differentiator of Beyond Exchange is that it is fully decentralized yet has ability to support advance trading functionality such as limit orders, stop loss/take profit levels, leveraged trading, and other features seen on centralized exchanges.
Focused on User’s Convenience
Synthetic asset exchange was built to enable broad-based access of unbanked/ underbanked users to the investment world. However, in contrast to the grand vision, existing synthetic exchanges struggle to penetrate into mass market. This is largely because of the complex user interface and inconvenient accessibility. Series of procedures from connecting wallet, token swap, staking, investing to trading - makes it extremely difficult for most new users without blockchain or finance knowledge to freely trade in the exchange, without reading the manuals line by line. Beyond exchange aims to solve this issue by introducing an intuitive user interface. All procedures that a new user is required to go through, from the first visit to the landing page until start of an actual trade on the exchange, will be processed in one-go with an easy guideline to follow.
A user’s first step to participate in the Beyond Exchange’s ecosystem is staking BYN tokens. Staked BYN tokens will be rewarded with additional tokens, in line with the staked period and amount (as well as, access to the governance, if staked number of tokens meet a certain requirement). From the staked BYN tokens, new synthetic asset tokens can be minted based on the portion of staked value.
Users who do not want to take price exposure in traditional assets may avoid such risk by staking the BYN tokens without investing. By doing so, such users can only benefit from rewards without being impacted by the price volatilities of other assets.
The Beyond Exchange will feature an intuitive frontend interface for users to directly interact with the smart contract with ease to issue (invest) or redeem synthetics. These synthetics can be created and redeemed with the mechanisms described above.
Each synthetic token that users create will be rewarded with a portion of newly minted BYN tokens, in order to reward for the high network fees associated with the creation of synthetics.
The Beyond Exchange allows users to have exposure to existing traditional assets by buying/selling synthetic assets in the exchange. Each synthetic asset tracks the price underlying traditional assets such as forex, equities, commodities as well as major cryptocurrencies. By purchasing these synthetic assets, users will have similar economic benefits as actually investing in each of these assets, without the inconvenience (or restriction, for some people) of setting up of a bank or securities account.
Another way of having access to synthetic assets is by locking ETH (or USDT) and borrow ETHb or USDb. The benefit of using ETH is that borrowers do not need to sell ETH (e.g. continue to maintain ETH price exposure) yet, still can have exposure to synthetic assets.
In case of the synthetic asset’s value falls materially below the collateral value, it is necessary to introduce a liquidation mechanism. The default liquidation ratio for ETH collateral is 150%, which requires a minimum of $1.50 of ETH collateral value for every $1 of USDb borrowed. If the collateral value drops below the liquidation ratio, automatic liquidation is executed, and the loan creator will receive the remaining collateral less liquidation fee.