OPNX Enables Margin Trading via oUSD
Crypto futures and bankruptcy claims trading exchange OPNX has unveiled a credit currency called “oUSD” for margin trading.
The company announced the new currency via a statement to Cointelegraph by OPNX Co-Founder Mark Lamb on Wednesday. The initial phase of oUSD requires users to deposit crypto assets into the exchange to acquire the currency. In the subsequent phase, OPNX plans to enable users to obtain oUSD by depositing crypto into on-chain contracts, allowing for potential “bankruptcy remoteness,” according to Lamb.
Solving three problems
The currency’s litepaper identifies three problems that oUSD aims to solve. Firstly, lenders are hesitant to trust platforms to hold cash loans backed by crypto collateral. Secondly, exchanges and lending platforms are wary of lending cash to margin traders due to the multiple bankruptcies witnessed during the bear market of 2022. Lastly, crypto derivatives traders seek “portfolio margin” to borrow and trade based on their crypto holdings rather than stablecoin holdings.
To address these concerns, oUSD is designed as a “credit currency.” It can be obtained at a 1-to-1 ratio with Tether (USDT) or used to measure profit and loss when users utilize Bitcoin or other cryptocurrencies as collateral. Users with negative oUSD balances are subject to an interest rate determined by holders of the platform’s native token, OX. Those with a positive balance can redeem oUSD for USDT.
Future plans
Lamb discussed future plans with Cointelegraph, explaining that users will eventually be able to acquire oUSD by staking cryptocurrencies within smart contracts outside the platform. This mechanism aims to provide bankruptcy remoteness, safeguarding users from potential exchange insolvency.
One of the co-founders of OPNX, Kyle Davies, along with Su Zhu, also co-founded the failed hedge fund Three Arrows Capital (3AC), leading to controversy surrounding the exchange. OPNX’s CEO, Leslie Lamb, admonished investors for allegedly misleading the public by disassociating themselves from the exchange. Responding to criticism, Mark Lamb argued that the mistakes made by Davies and Zhu have contributed to improving OPNX as an exchange.
Lamb stated: “I think Kyle and Su kind of portrayed the zeitgeist of the last crypto bull market well, and they lost the majority of their net worth, but they are building back, and that’s what I am doing as well, and that’s what everyone should do… just build back.”
Appearing on a Twitter Spaces recently, the founders of the bankrupt Singapore-headquartered 3AC said that they are committed to donating future earnings from OPNX to the creditors of the collapsed crypto hedge fund. Goodwill has been largely lacking for the duo following the 3AC collapse yet undeterred, they are putting all their energies behind their new venture, OPNX.
OPNX’s launch of oUSD as a credit currency offers potential solutions to the challenges faced by lenders, exchanges, and margin traders in the crypto space. By introducing oUSD, OPNX aims to provide a safer trading environment, provable solvency, and custody on-chain, giving users protection for their assets and promoting trust in the exchange. Trust might be in short supply for the start-up’s founders although there’s no doubt that they have acquired a lot more experience in the wake of the 3AC collapse.
