Liberty Finance DEX Features — Part 1
First of the two-part blog article on LibFi features.
Liberty Finance is our stake in the ground. We are building the DEX nobody else was willing to. And we are doing it in a way that everybody benefits.
The dominance of centralized exchanges is coming to an end, the writing is already on the wall. Custody issues, security, and centralization will soon turn into fading bad memories.
If you thought the world of cryptocurrency trading was already exciting enough, wait until you get a load of Liberty Finance DEX’s revolutionary features which we will be diving into in this two-part blog.
As such, here is the first part of our blog series, documenting and detailing the list of features we will be incorporating:
Swap Engine/UI + Pools and LP Staking
A swap engine is a piece of software that enables users to exchange one cryptocurrency for another.
Pools are collections of assets that can be used to provide liquidity for a swap engine.
LP staking refers to the practice of users “staking” (essentially locking up) their liquidity provider (LP) tokens in order to earn rewards. These rewards are typically paid out in the form of the underlying assets in the pool. In this way, LP staking can be seen as a way for users to earn passive income by providing liquidity to a swap engine.
Limit Orders and Order Book
In the world of trading, a limit order is an instruction from a trader to an exchange to buy or sell a security at a specified price or better. As a simple example, a trader might place a limit order to buy 100 shares of a stock at $10 per share. In this case, the trader is instructing their broker to only execute the trade if the stock can be purchased at $10 or less. If the stock is currently trading at $9.50, the trade will be executed at that price. If the stock is trading at $11, the limit order will not be executed.
An order book is a digital record of all outstanding limit orders for a particular security or market. The order book lists all of the buy and sell orders for a security, along with the price and quantity of each order.
By looking at the order book, traders can get a sense of the supply and demand for a particular security and can make informed decisions about their own trading strategies.
Stop Orders — Trailing Stops
Stop orders, also known as stop-loss orders, are a type of advanced order that can be used by traders to limit their potential losses in a trade.
A stop order is an instruction to a broker to buy or sell a security once it reaches a certain price, known as the stop price.
For example, a trader might place a stop order to sell 100 shares of a stock if its price falls to $10. In this case, if the stock’s price falls to $10 or below, the stop order will be triggered and the trade will be executed.
A trailing stop is a type of stop order that adjusts the stop price as the security’s price moves. For example, a trader might place a trailing stop to sell 100 shares of a stock with a trailing stop of $1. In this case, the stop price will be adjusted automatically as the stock’s price moves up or down. If the stock’s price increases by $1, the stop price will also increase by $1. If the stock’s price decreases by $1, the stop price will remain unchanged.
In this way, a trailing stop allows traders to lock in their profits while also providing some flexibility in case the security’s price moves in their favor.
FIAT onramp and offramp
A FIAT onramp is a mechanism or service that allows users to convert fiat currency (government-issued currency, such as dollars or euros) into a cryptocurrency. This can be done through an exchange, a brokerage, or another financial services provider.
A FIAT offramp is the opposite: it is a mechanism or service that allows users to convert a cryptocurrency back into fiat currency. This is often done when a user wants to withdraw their funds from a cryptocurrency exchange or wallet, and transfer them to a bank account or other traditional financial institution.
Together, FIAT Onramps and Offramps provide a way for users to move funds between the traditional financial system and the world of cryptocurrencies.
This is of paramount importance for investors who want to buy or sell cryptocurrencies, or for users who want to use cryptocurrencies for purchases or other transactions.
Leveraged Trading
Leveraged trading, also known as margin trading, is a practice in which traders borrow money from a broker or exchange in order to increase their exposure to a particular asset. This allows traders to make larger trades than they would be able to make with their own capital alone, potentially increasing their potential profits (but also their potential losses).
In the world of cryptocurrency, leveraged trading is a common practice. Many cryptocurrency exchanges offer margin trading services, allowing traders to borrow funds from the exchange in order to make larger trades.
As an example, a trader might deposit 1 bitcoin into their account and then borrow an additional 2 bitcoins from the exchange, for a total of 3 bitcoins of buying power. If the price of the cryptocurrency goes up, the trader can potentially make a larger profit than they would have been able to make with just their own 1 bitcoin.
However, if the price goes down, the trader will also be at greater risk of losses, since they are effectively borrowing money to make the trade.
Overall, leveraged trading can be a useful tool for traders who want to increase their potential returns, but it also carries additional risks and should be used carefully.
Foundation and Governance
The LibFi Foundation refers to the organization or entity that is responsible for the development and maintenance of the LibFi Ecosystem.
This organization:
》Oversees the project’s finances.
》Hires developers to work on the project.
》Makes decisions about the direction of the project.
Governance, on the other hand, refers to the process by which decisions are made within the project. This can include both technical decisions, such as changes to the underlying blockchain technology, as well as broader strategic decisions about the direction of the project.
Cryptocurrency projects often have decentralized governance structures, meaning that decisions are made through a consensus-based process involving the project’s community of users and stakeholders.
This can take the form of voting on proposed changes, or through the use of decentralized autonomous organizations (DAOs) which make decisions through smart contracts.
Overall, the foundation and governance of a cryptocurrency project are crucial for its success and long-term viability. They help ensure that the project is well-funded and well-managed and that the community is able to make decisions that are in the best interest of the project.
Furthermore, having a symbiotic relationship between the stakeholders and the Foundation helps protect against governance vulnerabilities such as flash loan attacks.
StableCoin
A stablecoin is a type of cryptocurrency that is designed to maintain a stable value, typically by being pegged to a stable asset such as the US dollar. Stablecoins are designed to offer the benefits of cryptocurrency (such as fast and cheap transactions) while avoiding the volatility that is often associated with cryptocurrencies like Bitcoin, Ethereum, and most others.
There are several different types of stablecoins, each with its own unique features and design:
》Some stablecoins are backed by a reserve of assets, such as fiat currency or precious metals, and are designed to maintain their value by maintaining a 1:1 ratio with the underlying asset.
》Other stablecoins are algorithmic, meaning that their value is maintained by a complex set of rules and algorithms, rather than being pegged to a specific asset.
Overall, stablecoins are an important part of the cryptocurrency ecosystem, providing users with a way to store and transfer value without having to worry about the volatility of traditional cryptocurrencies.
Conclusion
These are just half of the features that Liberty Finance DEX incorporates, the rest being covered in the next part of this blog, coming next week. These features are unique to a decentralized exchange and will up the game, offering palpable alternatives to traders of all statutes and levels of knowledge and technicality.
Stay tuned and keep on following us for the second part of the DEX Features article series. Also, don’t forget to join our Telegram Community, where you can chat directly with the team!