Discover more from OpenWorld’s Newsletter
OpenWorld to build derivative decentralized exchange
Given the development of the crypto market in recent months as well as the incident of FTX which effectively freeze the funding market for moon-shot and long-term horizon projects like metaverse. OpenWorld decided to change its direction to DeFi market and build a financial derivative decentralized exchange from now on.
This is a significant shift from the project direction and core products, we understand, but we think this give us a much better chance to bring the project and the community to success than going after a really long-term horizon with the metaverse.
Make no mistake, we still believe in the metaverse. We think it is a good idea. However when the market is this bad around investors sentiment as well as consumers confidence, we think the road ahead for us if we pursuit metaverse will be extremely rocky.
The vision for our new product looks like this:
- Build a portal for decentralized trading (traders trade directly from their wallet, no custody function).
- The assets will be derivatives, like perpetual BTC, perpetual ETH, not spot market and swapping like UNI or CAKE.
- The traders can have leverage.
- The traders can short.
- To create incentive and counter-balance for traders, we will create liquidity pool that fund the leverage (with market lending rate), and absorb trades vs traders (take counter-position as a pool).
- OpenWorld will facilitate trades and provide infrastructure between liquidity pool providing and trading products for traders. OpenWorld does not take position against traders nor take position against liquidity pool.
- The pool liquidity providers will have yield incentive to pool money into the pool and get a share from the fee OpenWorld made.
- Revenue for OpenWorld are: Funding fee for leverage, trading fee, unstaking fee after the Liquidity provider unstake from the pool.
- Risk management: OpenWorld does not take market position from either direction — thus no market risk, no custody means no liquidity risk. Risks that we will need to solve is operation risk, security risk, and defend from market manipulation.
- At the end of this phase we will have an MVP on BSC with 1 trading product: BTC/BUSD.
- Right now the bottleneck on DeFi is very limited product offers and lack of exposure on multi-chain.
- For perspective, global equity market is $91T, global debt market is $119T, global derivative is $600+T, global crypto market is $800B+, global DeFi Marketcap is $4B
- DeFi mainly offer swap on spot market and staking, either LP (liquidity pool) staking — where investors expose into impermanent loss, and single-asset staking — where investors expose into price risk on the underlying asset price decline.
- Our mission is to move and replicate products from TradFi and CeFi to DeFi, offer as much as (1) products for traders and investors to operate upon such as: leverage, short, option trading, hedge, etc. As well as as much (2) assets for traders and investors to get exposure on — this is not limited from crypto market, but also bring in US Equity, indexes, tech stocks, commodities, gold, oil, bonds.
- Even said so, at Phase 2, we will mainly expand around crypto market and offer beyond BTC, i.e.: ETH, SOL, MATIC, SAND, AXS, ONE, and the like.
- At phase 3 we will expand to non-crypto assets and asset classes. Imagine a Vietnamese investor use VND to buy BTC, then use BTC to get exposure into US Nasdaq stock market. This will shift the market risk and market exposure for the investors from Vietnam Dong to crypto to US Equity. Which is an opportunity that the Vietnamese in Vietnam has zero opportunity to expose as far as now.
- If the Turkish investor want to expose into TSLA stock because she admires Elon Musk, she can expose it through long TLSA ticker from OpenWorld exchange.
- To sum up, this is the phase we bring the global financial market into OpenWorld.
- At this phase we will build decentralized social platform for traders, talented fund managers, to share their ideas, to mingle and learn from each other analysis, sell reports, allow average traders to copy trades from idea leaders and pay them a fee, allow fund manager to create fund and manage trades for investors.
- Because everything we build is decentralized, on blockchain, every track record is verified and transparent, genius traders don’t need connection to open a quant fund. Just need the track record.
- We can also expand our offer to more passive investors to invest passively into indexes, and ETF-replicas.
- Essentially we want OpenWorld to become a window to the financial market where it brings opportunity for market exposure to everyone in crypto space. Create a community that trade together. Offer products that suit risk appetite for a wide range of investors from passive (staking into liquidity pool to take counter-trade vs traders) to active (traders can long, short, leverage, options, etc), essentially bring into DeFi whatever CeFi has, and with time we will figure out more way to add value to this trading/investing community.
Thanks everyone for being with us till now and we hope everyone will stay with us in our next phase of the journey,
2022 Nov 16th
From Tri Ton - OpenWorld CEO