Thread by @intechlligence

Extensive summary of @banklessDAO AMA with @vertex_protocol (on #Arbitrum )

🔶 From #CEX to #DEX - Taking back control

#Alpha somewhere in the middle 👇🧵

🔵 Building of Vertex started last year, & inspiration was from some of the things #FTX had done;

• Spot leveraging
• Having a multi-collateral account where you have different tokens & can trade perp positions against them
• Also, the problems with centralized institutions

🔵 The design & mechanism behind Vertex is very complex;

• As Vertex doesn’t want to be an ordinary DEX, but rather a CEX that's decentralized

• Vertex requires a complex set of smart contracts to integrate spot AMM, perp AMM & a money market, while cross-collateralizing them

• It's complex having limit orders on a DEX & every other robust feature of CEXs

• Besides smart contracts, Vertex was also building infrastructure, to ensure a stable way of decentralization that can hold an order book & txn signature from users to pass everything on-chain

🔵 Vertex has a sequencer, only for its contract. Similar to #Arbitrum's sequencer for #Ethereum.

The sequencer also acts as an order book - when users make orders, it is sent to the sequencer & sits there as an order book, when trades match, it gets pushed to the chain...

Thus, Vertex doesn’t necessarily need oracles for its order book, rather it uses a gas-efficient system & systematically eliminates any likelihood of manipulation of users’ orders

🔵 Interest rate on Vertex is similar to the utilization curve; the further you go up the curve, the higher the interest rate.

The more assets are being borrowed, the higher the interest rate

If, for example, 70% of all assets are borrowed, the curve goes very steep & optimizes for a penalty function. Below that, the rates & returns are more reasonable

🔵 Stop loss will be added in the 1st Quarter after Vertex mainnet launch.

🔵 Perp markets will eventually be permissioned to the DAO, initially the core team.

• To short assets; anything listed as a perp or anything listed as an allowable collateral that is available for borrowing on the money market, can be shorted.

🔵 #Alpha:

Vertex will have a token incentive program, that will incentivize market-making & market-taking.

Vertex prioritizes liquidity & good support for users; users are urged to come on & trade, & "Vertex token will be awarded as an airdrop later this year"

• Token launch will be somewhere 6 months after Vertex mainnet

🔵 There are currently structural problems in the market & institutions know that for crypto to thrive, there have to be more exchanges, preferably decentralized.

Vertex sometimes communicate with large institutions; they want to be involved with Vertex, & Vertex is excited about a partnership with them

🔵 Americans face restrictions from most dApps, will Vertex be accessible by everyone in the world?

The real question should be, will the US distinctly grant approval of access to Vertex to its citizens?

🔵 Short-term, Vertex will have a proto-governance where it consults with the community, & in the long-term will allow its token to drive governance.

• Vertex plans to have a functional DAO & an active community that helps drive the development of the protocol.

🔵 Vertex has a lot of demand for the SL, TP & other features, Vertex is working on them & will add them in the 1st quarter after mainnet

• The biggest target (short-term) is to have a decent amount of perp offerings (30+ perp markets in the first 3-6 months)

& afterward an availability of trading with 5 - 10 different collaterals

• Vertex listing a perp would be driven by user demand or what it perceives user demand to be & Vertex might do some consultation with the community & of course, evaluation of every other factor.

🔵 Vertex ensures the security of its platform & users' deposits:

• Audit by @osec_io

• Vertex is in the process of setting up a bounty program to incentivize white hackers to examine code for potential flaws

🔵 Users will be able to trade Vertex using hardware wallets, as vertex as done as much as they can to make it easy for integration of hardware wallets

END.

Recording:
twitter.com/i/spaces/1ZkJz…