Fulcrum Trade is a decentralized lending and margin trading platform built on Ethereum. The system leverages the 0x protocol to offer deeper liquidated spreads through the use of shared lending pools. Furthermore, bZx is a strong user of the Ethereum Name Service (ENS), giving each asset and trading strategy a unique domain in an attempt to make their service more digestible to average users.
Fulcrum Lending Rates
The company’s first consumer-facing product, Fulcrum, is a front-end web interface for interacting with the bZx smart contracts. Fulcrum allows both loans and margin positions to be tokenized as unique ERC20 assets in the form of iToken (for loans) and pToken (for margin trading). At the time of writing, Fulcrum currently supports 8 different assets with varying lending rates depicted below.
More recently, bZx has been working to ship another lending product, Torque, to offer indefinite-term loans and fixed interest rates. By integrating a web3 wallet such as Metamask, Torque leverages the ENS loan system described above to allow users to borrow supported assets by sending collateral to an ENS domain. Better yet, Torque does not require users to set up an account or pay any loan origination fees.
Background on bZx
bZx (formerly known at b0x) was conceived in August 2017. The project first started publicly marketing themselves during ETHDenver in 2018. Since then, the protocol published their formal whitepaper in February of 2018, followed by a testnet release in April and a full mainnet launch in August of the same year. During that time, the company chose to rebrand from b0x to bZx, specifically as co-founder Tom Bean stated:
“ to make the zero-x aspect of our identity clear and prevent confusion with any companies or protocols named Box.”
Since the rebrand, bZx has been heavily focused on solidifying strong industry partnerships with key players including but not limited to MakerDAO, Kyber, ChainLink, Augur and Set Protocol. Combined with the release of two separate consumer-facing products, bZx continues to explore new ways to make DeFi as digestible to the average end-user as possible. Thanks to the company’s continual display of being able to ship unique products, bZx has built a strong foundation for future growth.
The bZx team currently lists 8 team members and 3 advisors on their official website. With most of the core team being strongly focused on development, it should come as no surprise that the company has already shipped a number of products since it’s mainnet release in the second half of 2018.
bZx was founded by Tom Bean, a self-starter with years of experience working with top-profile car companies using GPS technology. After teaching himself Solditiy, Tom teamed up with the now COO, Kyle Kistner, to co-architect the whitepaper and full vision for the protocol. Supplemented by developers, designers and project managers who have worked on everything from iOS applications to other Ethereum dApps, its’ safe to say that bZx boasts a quite well-rounded team.
How Does it Work?
Without going into too much detail, Lenders and Borrowers place orders via a Relayer, and once matched, the Borrower receives a margin loan. While these margin funds are being used, off-chain bounty-hunters are monitoring the solvency of a margin account. If there’s a risk of borrowed funds being lost, bounty-hunters initiate position liquidation and subsequent refund to the Lender. Borrowers are free to do whatever they wish with their newly loaned tokens, prompted to deposit additional funds in the event of collateralization ratios that may induce future liquidation.
Interestingly enough, unlike other lending services such as Dharma, bZx relies on the upkeep of a deep insurance fund to ensure that lenders will always be covered in the event that borrowers are unable to pay back their loans.
“The protocol collects 10% of all interest earned by lenders and aggregates it into an insurance fund.”
For this reason amongst others, bZx leverages a native token aimed at ensuring the system operates smoothly and with confidence.
bZx’s native protocol token, BZRX, is primarily used by relays to collect trading fees. With governance being a strong focal point of the project at large, BZRX token holders are said to help shape how the bZx protocol will be updated in the future.
Furthermore, token holders receive the right to claim assets from the insurance fund corresponding to the respective weight of their BZRX token holdings. This function was disabled by initial design, but token holders can still vote to enable it in the future. Said another way, owning BZRX gives you a right to a portion of the total insurance fund.
As a small aside, it’s also worth noting b0x.network conducted an ICO in December of 2018, raising $7.8M of the targeted $36.5M hard cap, possibly indicating why token usage and secondary exchange trading has been so limited (especially with the company being based out of the US).
In summary, bZx poses a unique alternative to decentralized margin trading as previously covered with companies such as dYdX. While the choice to utilizing 0x may pay off in folds upon the successful launch of 0x Mesh, it’s worth noting that as a whole the demand for decentralized margin lending is still quite niche.
With this being said, it appears that the company is taking a number of steps to aid adoption in the form of strong partnerships, consumer-friendly UX and protocol incentives. For those interested in keeping up to date with bZx, be sure to follow the company’s blog.