The bZx Network is building a decentralized margin-lending protocol for any Decentralized Exchange (DEX) that opts for integration.
The platform enhances security, lowers fees, and elevates liquidity within the DEX market as a whole.
In this multi-part series, we’ll take a look at the bZx protocol and the benefits it can give to margin traders and BZRX token HOLDLers alike.
Now, before we dive in, let me spray some digital air-freshener in here…
Disclaimer: This is not investment or financial advice. I’m not a financial expert by any stretch of the imagination. Most information within this article is speculative and merely my own personal opinion. Always conduct your own research before contributing to any startup projects.
Always remember that what you do with your funds is your decision to make. And if that decision proves too difficult for you alone, seek guidance from a financial professional.
I may receive a small allocation of tokens for creating this content. That said, I will do my best to remain unbiased and fair. I try to avoid all FOMO and FUD and never wish to impart those emotions on my fellow crypto-heads.
The Old-School HODL
Do you remember when banks paid a decent annual percentage on a savings account? If you were HODLing your fiat before 2008’s financial crisis, you might’ve scored 5% or more on deposits.
The irony was, the fat-cat central bankers enjoying superfluous bonuses and ridonkulous lifestyles were riding on the backs of those deposits.
Everyone wants 5% annually? Take it! We’ll make at least 20% on your fiat.
And then the banks got a little too big for their britches. Got a little too brazen with their spending. Before the fraudsters had a chance to recover from their greedy missteps, the slop hit the proverbial fan.
The money-grubbing and corruption could only persist for so long before succumbing to their own weight.
This network of hooligans had proven, again, they don’t have their depositors’ best interests at heart.
They say necessity breeds invention. And thus began a new chapter in the evolution of money…
The New-School HODL
Today’s interest rates on fiat savings accounts are absolutely laughable.
Let me get this straight — you want me to deposit fiat and gain less than 1% annual interest? No, thanks. Granted, we’re somewhat trapped in the matrix and there’s no avoiding fiat. At least for now.
You see, since I believe in the technology and love the blockchain industry’s vision of an open-source future, I HODL tokens, not fiat.
And, there are some projects that I feel will absolutely explode in value in the coming years. Much more than any fiat ever will.
I don’t plan to sell or trade certain ERC20 tokens anytime soon. And I’ve got a secure place to keep them…
Your Own Private Ledger
A potent component of every DEX is self-custody of private keys. DEX users aren’t susceptible to some of the drawbacks facing centralized exchanges.
Namely, centralized operations hold your private keys, are sometimes hacked, and may lock you out of individual coins due to unforeseen “wallet maintenance” downtime.
To circumvent all of this nonsense, today’s HODLers use private wallets. And the most secure types are hardware devices. The Ledger Nano S is a popular choice and we’re seeing more and more solutions enter the market.
Keeping your ERC20 tokens on lockdown
Now, even MEW itself is prone to attempted hacks and phishing scams. And, they recommend that you don’t type your private keys onto their website when logging in.
Which makes it so important to safeguard your ETH and ERC20 tokens in hardware that acts as a secure go-between for your crypto and the wilds of the Internet.
You may be hesitant to offer up your crypto addresses for the prying eyes of the Internet to view, but I’m not. I have absolute faith in my hardware.
Here, let me prove it to you…
Since my private keys never leave the device, the only thing you can do with this ETH address is make a deposit:
0x625634E6004D9EB5caac9Ab570fB00a362a909B7
Go ahead, Flick, I triple dog dare you!
Seriously, though, if you have a decent-size bag of ETH and/or ERC20 tokens, you owe it to yourself to get some hardware.
And the Ledger isn’t restricted to the Ethereum network — you can also use it to store certain non-ETH tokens like $KMD and $NEO.
When you’re acting as your own bank, it’s certainly in your best interest to be diligent about security.
The Futuristic HODL
Now that we’ve covered old and current methods of asset storage, let’s look at what’s coming our way in the months ahead.
The team running bZx is enabling us to take our HODL skills up a notch.
Rather than taking a set-and-forget approach to depositing tokens into your private ETH wallet, you can lend your ERC20s out and earn interest on them.
Now, the idea of an interest-bearing coin is nothing new. The aforementioned coins, along with the likes of $ECA and $ONT — and many more — offer rewards to holders of their tokens.
The key difference here is that the bZx platform enables HODLers to loan their ERC20 tokens to margin traders. This vastly expands the reward-bearing capabilities of your HODL coins.
Potential value increases are still active because you’ll get the coins back once the loan term ends. And when it does, your bag o’ tokens will have grown.
And rather than being constrained to specific tokens — like the bZx network’s native BZRX — you can convert any of your ERC20 tokens to iTokens.
Once you posses iTokens — more on those in a future article, and no, they’re not related to Apple — you’re eligible to get rewarded for lending them out.
Now, I’ve yet to find details on specific interest rates but my guess is they’ll absolutely crush any offer today’s central banks can make. There’s no bloated middleman to speak of.
Additionally, since certain coins in the land of crypto already offer north of 5% annually, it would behoove the bZx team to at least match that figure.
The market has lots — maybe even too many — of token options now. Team bZx needs to provide a compelling reason to use their network over others.
Final thoughts…
The DEX industry is growing rapidly. But the concept has yet to take the reins from its centralized counterparts.
We know that DEXs are needed in the crypto space right now. Far too many millions and billions of dollars have been siphoned out of big-name exchanges this year. I imagine that’d be enough to scare some people away from the industry entirely.
Plus, liquidity and user-friendliness are two big obstacles to overcome before we see widespread DEX adoption. Team bZx is working to address both of those roadblocks.
And bZx plans to improve the DEX landscape by designing magnets that attract coiners and no-coiners alike. Passive income has universal appeal as the ultimate enabler of freedom.
Having funds head your way — without any further effort on your part — allows you to focus on what’s most important to you.
And if you can make your passive stream voluminous enough, Bill Lumbergh won’t get to dictate your daily schedule.
That vision, the somewhat-romantic — yet attainable — notion of getting paid while you sleep, is so very enticing. Honestly, it’s one reason why I decided to unearth more about the bZx project.
And believe me, the rabbit hole goes waay deeper than passive income.
I’ll share more of my findings with you, for sure. But you’re gonna have to wait. There’s a lot to cover and I plan to divide the concepts into separate articles.
But if you’re in a hurry, head on over to the bZx Website to discover more about the project. And here’s where you can find the bZx Whitepaper if you’re looking for a longer read.
Lastly, here are some additional bZx Project Resources:
Telegram: https://t.me/b0xNet
Twitter: https://twitter.com/b0xNet
GitHub: https://github.com/b0xNetwork
Email: team@b0x.network
Mainnet dApp: https://portal.bzx.network
BZRX Token Pre-sale Application: https://b0x.network/tokensale/
By the way…
If you like what you see here and need help getting your crypto message to the masses, I’d love to hear about your project.
Feel free to reach out to me here: blockchainauthor at gmail
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