bZx Protocol

👋Introduction

bZx is a protocol for tokenized margin trading and lending. It is a financial primitive for shorting, leverage, borrowing, and lending that empowers decentralized, efficient, and rent-free blockchain.

bZx allows anyone to build applications that enable lenders, borrowers, and traders to interact with the most flexible decentralized finance protocol on Ethereum & AVAX. bZx is a community-run project, governed by the community vote for all major changes to the protocol.

There are a few core products that make up the bZx ecosystem and each of these products serves a different purpose within the ecosystem:

1. Fulcrum

2. Torque

3. bZx Protocol

The BZRX Token

The total supply of BZRX is 1.030B. Currently all but 140MM of the tokens are inside the vesting contract. You can track the number of tokens inside the vesting contract transparently.

Trade

Margin made simple with Fulcrum

The Fulcrum portal (https://fulcrum.trade) is a front-end web interface for interacting with the bZx smart contracts. Fulcrum is built on the bZx base protocol and extends the protocol by allowing both loans and margin positions to be tokenized. Tokenized loans, called iTokens, are for letting the user lend their assets and earn interest. Tokenized positions, called pTokens, are for gaining long or short market exposure to an asset, and for letting the user trade with borrowed funds and with leverage. Both iTokens and pTokens are ERC20-compliant and provide access to the read-only functions symbol, name, decimals, totalSupply, balanceOf, and allowance, as well as the state-changing functions transfer, transferFrom, approve, increaseApproval, and decreaseApproval. Collectively, we'll refer to both iTokens and pTokens as "Fulcrum tokens".

Lend

Lending on Fulcrum is powered by iTokens, which are global lending pools. Each asset has a single iToken equivalent (ETH as iETH, DAI has iDAI, etc.), and has an independent interest rate paid to lenders who have deposited funds to the contract. The interest earned is proportional to the amount of iToken held by each lender. iTokens are minted by transferring the underlying asset to the contract, calling mint, and receiving back an equivalent amount of the iToken (ERC20) at the current iToken price. iTokens have an on-chain API to query current "redemption value" (tokenPrice()), as well the interest rates paid by borrowers and paid to lenders.

Farm

Single Asset Pools

single asset pools for iTokens and LP pools for BZRX, vBZRX, and BGOV

LP Farming Pools

LP farming pools will have multiplier.. ex: the BGOV-BNB LP farm pool might say 10x on it in the UI. Meaning rewards are 10x greater

The Utility of BZRX

The BZRX token is a governance token, first and foremost. Collectively, the token holders have the power to upgrade the protocol as they see fit, only constrained by the checks-and-balances of the bZxDAO. This allows token holders to create incentives to reward participation and drive usage of the protocol. A number of proposals have been made to capture value and drive participation in governance. These include:

• Fee sharing for participation in governance

• Fee mining incentives for protocol users

• Using the floating liquidity from unclaimed fees to liquidity mine BAL rewards

• Asset backing the token with the insurance fund

These proposals will be voted on by the DAO .

The Structure of vBZRX

The vBZRX token is an ERC20 token, making each token fungible and uniform. The underlying BZRX within the contract can be staked, however voting rights are only counted for the amount of BZRX that is unvested, and this decreases with each block. As currently proposed, it will be possible to participate in fee sharing with the staked BZRX inside the vBZRX contract; however, the fees do not vest until the token vests.

Key Takeaways:

• When BZRX is vesting, any fees it generates vests with the token that generated it.

• vBZRX is only entitled to voting rights to the amount of underlying unvested BZRX.

bZx Stake

What is a DAO/bZx DAO?

The term stands for Decentralized Autonomous Organization. A DAO is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government.

What is a BIP?

Improvement Proposals (BIPs), are the main form of governance. They are written proposals made by a team or community member proposals that are made to signal or effect change to its governance or products, they are posted on the forum and their main objective is to engage discussion with the community and look for its approval.

How do I create a BIP?

Follow the template on the Forum and simply post it. Once the proposal has been discussed for three days. It will reach community consensus and proceed to the next step of community snapshot proposal vote.

Trading & Borrowing

Trading (taking a position) involves first borrowing from an iToken. There are two ways to borrow using Fulcrum and open a position:

1. pToken contracts are tokenized versions of leveraged long or short positions on an asset. pTokens are minted by sending ETH or another asset into the pToken contract, which in turn borrows from an iToken lending pool, does a Kyber swap, and sends the user back an equivalent amount of pToken (ERC20) at the current pToken price. For short positions, such as 2x short ETH, the pToken borrows from the iETH token, then swaps that ETH for a stable asset (DAI) on KyberSwap. For long positions, such as 2x long ETH, the pToken borrows from a stable asset, iDAI, and swaps that for ETH on KyberSwap. The tokens are perpetual, but positions are not. If a position loses too much value, or reaches the end of the loan term (28 days), it will be liquidated and a new position will be opened behind the scenes. Traders should be aware of the liquidation price of the pToken, and burn their pTokens prior to being liquidated, to avoid locking in any losses.

2. A trader can borrow directly from an iToken and manage their loan or margin trade themselves using the bZx protocol. The protocol supports margin loans that are under-collateralized or over-collatateralized. Over-collateralized loans, with 150% collateral or more, allow the user to withdraw the loan principal to an external wallet or contract.