The platform plans to make oUSD accessible to customers who deposit crypto.

If a user’s oUSD balance falls below zero, they will be charged interest at a rate.

Mark Lamb, co-founder of OPNX, announced the creation of a credit currency for margin trading on July 5 in a statement. The “phase 1” release of the oUSD currency requires users to put crypto assets into the exchange before they may obtain oUSD.

To facilitate potential “bankruptcy remoteness,” Lamb said the platform plans to make oUSD accessible to customers who deposit cryptocurrency into on-chain contracts in a future “phase 2” edition.

Addresses 3 Prime Issues

The litepaper for oUSD states that it addresses three issues. First, banks and other financial institutions are hesitant to place their cryptocurrency collateral with third-party platforms. Second, during the bear market of 2022, several exchanges and lending platforms went bankrupt because they lent money to margin traders.

Third, “portfolio margin,” or the capacity to borrow and trade based on one’s crypto holdings rather than one’s stablecoin holdings, is desired by traders in crypto derivatives.

In order to address this issue, oUSD was created as a “credit currency.” It may be used to calculate gains or losses when Bitcoin, Ether, or another cryptocurrency is used as collateral, and it can be acquired at a 1:1 ratio with Tether.

Moreover, if a user’s oUSD balance falls below zero, they will be charged interest at a rate set by the platform’s OX token holders. Those who have accumulated a surplus may withdraw their funds in USDT.

Lamb said that users will be able to stake crypto outside of the network in smart contracts and obtain oUSD in the future. This will provide them a buffer against the possibility of the exchange going bankrupt.

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Filed under: Bitcoin - @ July 5, 2023 6:25 pm