Who are Derify Brokers and why we need them for DEX
A quick recall to our vision.
Derify is a protocol allowing anyone to open decentralized trading exchange for anything.
Our end goal is to become one of the safest, most adopted and most widely-used derivative trading infrastructure in the world, ultimately providing DEX-as-a-service product where everyone can run DEX themselves, as we stated in the whitepaper.
It’s an ambitious goal and we brought a number of innovation to pursue that.
For Leveraged Farming, some Defi projects already testing that, and the result is good.
For hAMM or alternative AMM system, other derivative DEXs all adopted similar designs.
For PCF, people are watching our test net for important data and feedback.
On operational level:
We will bring Brokers to the DEX and they will be operating the business, not a centralized core team.
Who are the Brokers
Traditionally, a broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. Because securities exchanges only accept orders from individuals or firms who are members of that exchange, individual traders and investors need the services of exchange members.
Think about Nasdaq, traders not directly open accounts with the exchange, but through Robinhood, Ameritrade or Interactive Brokers, and they handle daily orders of these traders, all trading data go into Nasdaq’s clearing and matching system.
For OTC trading, traders also don’t directly trade with other traders for their large BTC transactions, but through DRW, Circle or Jump; for Forex, traders are looking for Saxo Bank, CMC or LCG; for Commodity or ETF it’s the same story.
Who are the DEX Brokers
DEX needs brokers just like traditional exchanges.
However, because a DEX protocol is only a trading infrastructure that provides calculation, clearing and trading functions, which lacks personnel and not a regulated (or regulatable) entity, the services of trustworthy brokers to interact with DEX protocols is much more important for individual traders and investors.
Many DEX projects have their founding team as the service and operation team of the exchange, which essentially make themselves brokers. Derify thinks otherwise: because of the decentralized nature of a DEX, we are focusing on the protocol and trading infrastructure, not so much on the service work.
As a DEX, our trading data is stored on chain, safe and fully verifiable. So a DEX protocol as an infrastructure is not only safer than CEX, but also more capable to fullfil financial reporting duties on most of the jurisdictions. However, if a team is directly running derivative brokerage services, it may very likely fall under financial regulations in some jurisdiction.
In the future, a DEX shall hand over daily services to qualified Brokers, who will provide trustworthy services to individual investors and establish a smooth interaction with the DEX protocol.
DEX brokers also contribute to decentralization, becoming DEX broker allows any qualified individuals to operate their own exchange without established “renown” or “mutual trust”, essentially replace the centralized authority of centralized exchanges with verifiable codes. In that way, people may find possibilities to change the current structure of financial world.
Who are the Derify Brokers
Becoming Derify’s broker is just like becoming brokers of any other DEX. Brokers will provide services to traders, create and introduce products to the investors and meanwhile earning rewards.
Derivative trading is highly risky and complicated, so Derify is not directly open to retail investors, all users have to choose a broker before using Derify’s service.
Becoming a Derify broker means the broker owns a free-of-charge derivative DEX. Unlike the invitation or promotion system of other projects, develop team of Derify will not take any income from the project, 100% of the profit generated by the project will be distributed among brokers, liquidity miners and insurance pool.
Each broker will have their independent site for entrance or promotion, once a new address registered for the broker’s service, their service relationship is locked, all the rewards and profits generated from this address will all go to the broker providing service.
There’s no exclusive rights and regional restrictions to brokers, any individual or entities from anywhere in the world can become a Derify broker, run a own DEX, offer own product and provide own service. The broker may use of their language, culture and region as strength to grow their business.
Brokers are important participants of Derify DAO, voting for things like new functions and marketing strategies, many risk control components also needs to be adjusted based on broker’s needs.
Derify is open source and supports different financial products and derivatives other than CFDs, brokers can offer derivative products already developed, or develop new products and provide unique financial products, like selling call/put options, swaps and others.
Derify is also recruiting Genesis Broker Application Form (until official launch), please check out this article.
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