With the deep bear market in the crypto market, DeFi has experienced an unprecedented blow in 2022. The market has gone through a process of eliminating the false and retaining the true, removing bubbles, breaking and rebuilding. In 2023, DeFi finally ushered in the dawn, L2 public chains began to attract much attention, and Arbitrum became the L2 public chain with the highest expectations. At present,
Some powerful DeFi protocols have also started multi-chain deployment. Uniswap just passed the proposal to deploy on BNB Chain in February. So far, Uniswap has been deployed on 5 public chains. SushiSwap has deployed on 24 public chains. Multi-chain deployment has become the best choice for DeFi protocols to integrate liquidity and increase influence. El Dorado Exchange (EDE) is a decentralized Swap and perpetual social trading protocol built on BNB Chain. The protocol has also recently started multi-chain deployment and chose to expand to Arbitrum.
About EDE
El Dorado Exchange (EDE) is currently built on BNB Chain and is a decentralized spot and perpetual social trading exchange. It has innovated on the basis of GMX mechanism and added more unique elements.
El Dorado currently uses two ELP pools with different assets to support transactions, earning income by making markets, providing liquidity for swaps and leveraged transactions. Users can freely choose to mint different ELP tokens, or redeem assets through destruction. EDE also provides users with more convenient ELP transactions, and users can directly use a single asset to buy or sell ELP. As the platform's liquidity provider token, holding ELP can share 60% of the platform's revenue, and staking ELP can also receive additional aEDE rewards. EDE is the platform's utility token. Pledge EDE to obtain the governance token gEDE, as well as EUSD and EDE rewards. Users can pledge EDE for 7 days to 4 years. The longer the pledge period, the more EUSD and EDE rewards they will receive.
As a perpetual exchange, price accuracy and sensitivity are very important, which directly affects the core interests of users. In order to synchronize more timely and accurate price information in the first place, El Dorado not only uses the widely used Chainlink oracle to feed prices, but also combines price aggregation from major transactions with large trading volumes to provide support for the entire protocol, ensuring price accuracy to the greatest extent, and avoiding large price fluctuations caused by extreme market conditions of a single exchange, thereby protecting user interests to the greatest extent.
Decentralized stablecoin EUSD based on protocol revenue
The decoupling of UST in 2022 caused a major crash in the crypto market, and the regulatory suspension of BUSD in 2023 made the market think more about stablecoins. In particular, the suspension of BUSD issuance cannot be underestimated because BUSD accounts for more than 50% of the stablecoin share of BNB Chain.
In order to maintain the stability of the protocol, provide users with more stable rewards, and maintain the attractiveness of the platform, El Dorado uses a decentralized stablecoin, EUSD, which is minted based on protocol revenue. EUSD is minted by the protocol based on revenue and rewarded to ELP and gEDE holders. At the same time as minting, the same amount of collateral enters the reserve to maintain the value anchor of EUSD. In other words, EUSD has a 100% collateral ratio, and the amount of EUSD minted has the same amount of collateral worth US dollars stored in the reserve. The 100% collateral ratio ensures that EUSD has sufficient solvency.
To stabilize the value, EI Dorado uses Stake and Bond mechanisms to maintain the price stable around the value of 1EUSD equal to 1 US dollar.
Since the collateral includes volatile assets, there are two situations when the price fluctuates. When the price rises and the collateral ratio is greater than 100%, the protocol enables the Stake mechanism, and users Staking EUSD obtains interest rewards, the total amount of EUSD increases, and the collateral ratio returns to 100%; when the price falls and the collateral ratio is lower than 100%, the Bond mechanism is activated, and users sell EUSD to the protocol to obtain discounted EDE tokens. The protocol destroys the EUSD sold by users and gradually pulls the collateral ratio back to 100%. Bonds will be linearly vested over a period of time to reduce the selling pressure caused by arbitrage.
EUSD will be able to maintain the stability of liquidity in the EDE ecosystem, bringing more benefits to users while expanding more gameplay. Through EUSD, EDE can integrate more external protocols, improve the composability and scalability of the protocol, and provide more possibilities for EDE users. At the same time, the stablecoin market of BNB Chain is currently in a state of calm before turmoil. Whether EUSD, as a decentralized algorithmic stablecoin, can play a greater role in BNB Chain is a test of project developers and project operation capabilities, and we still need to wait for time to give an answer.
Innovative on-chain social transactions
The transaction types on the chain have always been relatively simple active transactions. People need to spend a lot of time and energy to study projects, judge trends and trade. For some retail investors with insufficient trading experience, newcomers or users who do not have enough time, it is very difficult to decide how to trade, and they often miss more opportunities.
EI Dorado has established an effective bridge between experienced professional traders and users with limited time and insufficient experience. Users can choose a trading strategy that suits them to follow orders. There is no need for frequent operations or daily market monitoring. One-click following orders can allow users to get the same trading experience as professional traders. The following order model can greatly reduce the entry threshold of the crypto market, allowing new users and users who are not proficient in trading to make profits in transactions more easily and conveniently.
Robot trading has been widely used in CEX, but it has not been able to run on the chain. Robot trading is also part of El Dorado's social trading plan. It is normal for the crypto market to fluctuate within a range. Although the fluctuation may seem small, it does not mean that there are no trading opportunities. Grid trading in a volatile market often has unexpected results. In El Dorado, you can follow orders by paying attention to grid strategies, or invest in the capital pool of mature traders. The robot will automatically place orders within the set range, 24 hours a day, without missing any opportunities brought by fluctuations.
In addition to grid trading, there are actually many trading strategies that can be learned and followed, and there are more imaginative ways of playing that can be carried out on the platform provided by EI Dorado. Although the social trading function is still under development, it is a great innovation that is worth looking forward to.
Final Thoughts
The first step of El Dorado Exchange (EDE) to expand to Arbitrum will be an IDO, with an IDO price of $1 and a release price of $1.2. It is reported that the total issuance of EDE on Arbitrum is only half of that of BNB Chain, and the current token price of BNB Chain is around 9U. From this perspective, the project has left enough space for the market. At the same time, the expansion to Arbitrum will not affect the token economics of the BNB network. The token price of each market will represent the valuation of the chain, and each chain will exist independently without affecting each other until an appropriate bridging solution is developed and the risk of inter-chain token arbitrage is reduced.
El Dorado Exchange adopts an innovative mechanism to provide users with more ways to earn money. A portion of the protocol income is distributed to EDE holders, and users who pledge can also obtain considerable income. Compared with project tokens that are simply used for mining and have no underlying value support, EDE holders have protocol dividends and can participate in protocol governance. Holding EDE is equivalent to holding shares of El Dorado Exchange and being a shareholder of the protocol. El Dorado Exchange is a project that truly hands over the protocol to the community. EDE is a token that truly has value support and can help holders capture profits.
Note: This article is for information sharing only and does not constitute any investment advice, nor does it recommend that you buy, sell or hold any cryptocurrency. Please establish correct monetary and investment concepts, look at blockchain rationally, and effectively improve risk awareness. Before making any investment decision, please fully investigate and contact your financial advisor.
