As the cryptocurrency market matures, a number of exchanges have begun to offer crypto derivatives contracts. To margin trade on these platforms, users are forced to trust their crypto capital on centralized exchange wallets. A new open-source platform leveraging dYdX protocol, however, has launched the first truly trustless method of creating short and leveraged positions for Ethereum.
The new platform, called Expo, offers traders intent on shorting Ethereum with a straightforward method of margin trading. Expo functions as a “Short Ethereum” token, which is pegged to a short position on Ethereum. The Short Ethereum token is powered by the dYdX protocol, which, in turn, is built upon the 0x and Ethereum projects.
ATTN: Opportunity for Eth haters!
On Oct 2 you can short Eth with an Eth-based token on an Eth-based protocol using an Eth-based exchange!
Since Ethereum isn’t useful for anything, this is a great opportunity!
— Ryan Sean Adams (@RyanSAdams) September 18, 2018
Seamless Smart Contract Driven Short Positions
The dYdX platform, upon which Expo is built, recently launched a $2 million seed round led by Andreessen Horowitz and other notable angel investors, including Coinbase CEO Brian Armstrong.
Short Ethereum tokens can be easily purchased via Metamask, with the back-end mechanics of the protocol that drives the token abstracted away from the trader. A recent press release issued by Expo states that Expo margin trading tokens will be listed on DEXs such as Radar Relay, with a number of additional exchange to be added soon.
Liquidity in the Expo ecosystem is provided by dYdX lending partners, who earn interest by locking collateral into smart contracts that provide backing for ETH loans. The Expo platform also automatically sources collateral from decentralized exchanges.
In addition to offering Short Ethereum tokens, Expo plans to launch a number of other margin trading tokens including leveraged tokens that multiply profits when prices increase. Each margin token issued by Expo is available for 28 days and each underlying asset is associated with a token that expires on the 15th and 30th of every month.
Expo Founder Wants to Make Margin Trading Easier
The Expo Short Ethereum token is notable for the manner in which it allows traders to access margin trading in the form of a simple ERC20 token–without signup processes, fees, KYC requirements or the risk associated with centralized exchange trading.
In a recent interview with TechCrunch, dYdX founder Antonio Juliano outlined the future of the Expo platform, stating that crypto derivatives are mostly traded by “sophisticated traders”—a fact that the dYdX team plans to change by moving into offering options or swaps:
“We think of it as more than just shorting your favorite sh*tcoin. We think of them as mature financial products.”
Cover Photo by Nicate Lee on Unsplash
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