A new frontier with permissionless trading: Interview with OpenLeverage CEO Jackie
Leverage trading is a lucrative trading strategy gaining popularity among crypto traders. Trading on centralized exchange platforms has a lot of barriers, such as costs and maintenance. While decentralized exchanges provide an alternative to users, many are still permissioned or provide minimal trading pairs.
OpenLeverage is a permissionless decentralized platform that aims to solve this issue. It provides users with an infrastructure that requires no permission to create markets for any trading pair and to margin trade. Any user can create markets, lend or borrow with isolated and market-adjusted risk controls.
In an interview with Jackie, co-founder and CEO of OpenLeverage, we discussed the permissionless platform, the current state of the DeFi market, their dual-token system, and much more.
1. Jackie, tell us more about yourself? What got you into the crypto space?
I came from a technical background and earned my master’s degree in computer science at the University of Manchester. I joined Goldman Sachs and HBSC, where I worked on qualitative asset management, derivatives trading, and equity trading. Later, I founded my first startup that helped build blockchains and provided FinTech solutions for banks and enterprises.
Around this time was when I first got into the crypto space. Although it wasn’t entirely crypto-related, it combined blockchain with traditional finance to bring value to banks and enterprises, helping them get a consensus and formalize information flow while simplifying data transfers.
Fast forward to the present, and OpenLeverage is combining the best parts of traditional finance, technology, and crypto and unleashing more value and an optimized business model into the crypto space.
2. What are your views on the current state of DeFi? How are you ensuring that OpenLeverage stays true to the concept of decentralization?
DeFi’s growth is like the internet bubble in the late 1990s to early 2000s. Although we witnessed the internet bubble crash, it never stopped growing. I think DeFi is also following a similar path – it will go through highs and lows while entering new stages of development. People are going back to the fundamentals of what brings value to a product. This is why I think we are at the period where we can see simple growth in DeFi in terms of the number of projects in the space and the kind of value they bring to the market.
When we look at DeFi, we hope its rapid development will spread to other areas like derivative trading or rapid trading and futures, options, and market trading. Spot trading and lending are supported, but many more asset management protocols will develop as the foundations are set. This will help add more liquidity to decentralized finance and aid its growth.
The current state of decentralized finance projects is still relatively centralized; this applies to the governance models in place, although it is slowly becoming more decentralized now. I’m not saying it isn’t a good thing, but I think we need to find a way to get past it. At OpenLeverage, we want to build something like Uniswap that allows everyone to join and participate with our business model and is decentralized. We are trying to integrate an ecosystem while also being self-autonomous.
3. Tell us more about the problems faced by the leverage traders that OpenLeverage aims to address? How are you simplifying the process of leverage trading for the users?
Regarding leverage trading, I think there are two sides. One is that of the trader, the other of the liquidity provider. From what we saw from the crypto world, we understand that you don’t have to be a professional trader to open up a leverage trading account. We have seen trading volumes of derivatives or futures or perpetual being three or five times that of spot trading. We have seen many users being very active in this space and driving the direction of retail trading.
There is also high volatility in the crypto market, and because of that, many traders take part in leverage trading. This proves that many traders participate in leverage trading even though they don’t fall under the category of professional traders. These users have a view, a direction, and a principle in mind. We keep that in mind while designing our product to make it user-interactive and friendly. If you look at our website, you can tell what token you are trading with, the price, the interest rate, and the risk. This makes OpenLeverage much easier to use than our competitors.
On the other side of the picture, we have liquidity providers. Perpetual swaps would require a very professional market maker to provide liquidity. That is how the process works. However, if you look at our lending products, users have their interests in mind – they want to earn interest, yield, or incentives. So, having a lending pool on another side to support market trading provides an opportunity for them to generate yield without having to experience significant risk. This makes lending easier.
We incorporate the lender by having a permissionless market. We do this to understand the market. It is very similar to providing liquidity to Uniswap, and we want participants to understand a little more about the risk. Many of our competitors have more of a permissioned model or offer better risk protection, preventing them from joining the new market.
4.OpenLeverage deployed onto the Ethereum mainnet in December and was most recently deployed onto the BNB Chain. Why did you decide on the BNB Chain?
We want to work with the best projects in the crypto space – these crypto-native projects are run by the best in the communities while also capturing the most significant shares of volume. Many small players in the space are a part of BNB Chain, and we want to give them a chance to work with us while also raising awareness about our brand.
Our recent deployment onto the BNB Chain has proved incredibly fruitful. Alongside the support we have gained from communities on Ethereum, we have received tremendous support and growth within the BNB Chain community. We have developed strong, strategic partnerships and have carried the momentum from our first deployment into the present. Our growth on the BNB Chain is currently at over ten million dollars trading volume, with TVL surpassing three million dollars in over 11,000 total trades.
5. Since we’re on the subject of tokens, OpenLeverage has quite a unique dual-token system. Can you tell us more about the $OLE and xOLE tokens? What are their use cases?
Firstly, we have the OLE token, which users can mine through borrowing, lending, and farming. We also encourage our OLE token holders to lock their tokens into a time-weighted escrow to generate xOLE.
The xOLE tokens give people more power and privilege to vote or propose changes as part of the governing process. They will also share a ⅓ fee from the platform and boost their OLE earnings in certified pools while also getting a fee discount when they are trading. We want to have a tokenomics system where core users will have a more stable relationship with the protocol and be more committed to helping the project’s growth and getting incentivized for doing so. That is the reason we want to have a dual-token system.
At the same time, with these levels of participation, we want to give users a choice to pick the level of incentive, power, and participation they wish to choose.
6. Community engagement is an important part of any platform. How are you keeping your community engaged and interacting with them as a decentralized platform?
We have incentive programs for users. Our users can be categorized into two parts: project and retail users. We will run joint campaigns with projects to help them grow their tokens and trading volumes and maintain liquidity. Apart from this, we will also help retail users by presenting more opportunities to lend or trade.
We are also opening up more AMA sessions and joining different communities. In September, we joined Uniswap to better engage with the community and have recently partnered up with several projects on the BNB Chain, including Solv Protocol, Multichain, Infinity Pad, Fuse Network, Mdex, and BabySwap. We have interacted and conducted cross-project AMAs and trading campaigns to gain traction with our partner communities.
To promote more engagement and interaction within our protocol, we have introduced new trading campaigns, referral programs, and PNL leaderboards for our community members to participate in and be more engaged, along with increasing our brand awareness on our social channels. We think that would translate into more natural and positive growth for the project.
7. OpenLeverage has plans for multi-chain deployments across major chains and layer-2 solutions. Keeping this in mind, how significant is your partnership with Multichain?
We want to deploy our protocol on multiple chains. We see that the TVL can grow a lot more on chains such as Fantom, Polygon, and Avalanche. Our vision is to deploy our project onto multiple chains to support hundreds, if not thousands, of tokens in the market.
The concept of portability is essential to our project. We focus on technical aspects, product design, and marketing roadmap as we design to implement our multi-chain strategy effectively. One of the anchor points that we would have to go through is to bridge our token between those chains to have a consolidated view of token supplies to make our tokenomics more efficient and effective.
Our partnership with Multichain is a mutually-beneficial one. We are helping them grow their ecosystem while providing them with our infrastructure and support.
8. What lies ahead on the OpenLeverage roadmap? Can you tell us more about what we can look forward to this year?
We will enhance our protocol to have more capabilities, especially for social trading. On the trading side, we have seen a lot of trading leaders or KOLs that are good at trading and have a good track record but are not managing others’ portfolios. We want to have them create portfolios and let followers join them in a permissionless and trustless manner.
At the same time, trading leaders and their followers will get rewards or gains according to their trading performance.
We are also looking at the potential of gamifying ourselves and integrating with more DEXs, while also focusing on multi-chain deployments and layer-2 solutions. We will also launch our DAO later, where our token holders will have governance power and control over the Treasury.
So stay tuned as we are bringing something interesting to the crypto space.
For more information on OpenLeverage, please check out their official website.