Permissionless Listing (Leverage DEX)

The FWX Permissionless Listing feature integrates advanced mechanisms to provide a seamless and decentralized leveraged trading experience. The protocol operates in three key components, ensuring efficiency and innovation at every stage:

• Frontend for Leverage Trading:

  • Enables users to search and trade assets with up to 5x leverage.

  • Provides an intuitive user interface for managing positions, collateral, and trading actions.

• Lending Pool:

  • Functions similarly to the AAVE lending pool, offering liquidity for leveraged trades.

  • Integrates the FWX NFT innovation, which holds all positions and allows:

    • Transferability: Users can transfer lending positions to other wallets via the NFT.

    • Compound Interest: Automatically compounds interest

    • Only interest Claimable: Using FWX NFT to claim only interest

  • No losses to liquidity providers under standard trading conditions due to over-collateralized lending.

• AMM DEX Integration:

  • Compatible with Uniswap V2, Uniswap V3, and other similar models such as Trader Joe (JOE).

  • Ensures access to the best liquidity and lowest price impact across supported AMMs.

In Leverage DEX, How It Works:

1. Opening a Position:

   • Collateral Submission: The user submits collateral to the protocol.

   • Protocol Borrowing:

     • The protocol borrows assets from the lending pool on behalf of the user.

     • The borrowed assets are over-collateralized based on the leverage chosen by the user. (Users cannot withdraw the borrowed assets.)

   • Asset Swap:

     • Borrowed assets are used as the underlying and swapped on the AMM DEX (e.g., Uniswap or its forks).

   • Temporary Vault:

     • Swapped assets are temporarily stored in a segment of the FWX smart contract called the temporary vault.

   • NFT Integration:

     • The user's position is then linked to their FWX NFT.

   At the end of this process, the user holds an NFT that represents their position, enabling flexibility and transferability.

2. Closing a Position:

   • Asset Swap-Back:

     • The protocol swaps back the assets to the original form.

     • If the user made a profit, the swap-back returns more assets than initially swapped. Conversely, a loss results in fewer assets being returned.

   • Collateral Adjustment:

     • The protocol adjusts the collateral by deducting losses or adding profits.

   • Lending Pool Reconciliation:

     • Remaining collateral is returned to the lending pool, ensuring no loss to liquidity providers.

Permissionless Listing, How it works?

• Liquidity Addition:

  • Users must first add liquidity for their token on a supported AMM DEX.

  • FWX integrates with Uniswap V2, Uniswap V3, and similar DEX models, as well as the FWX DEX for ease of use.

• Permissionless Listing:

  • Navigate to the Permissionless Listing Page.

  • Enter the token address and liquidity amount from the AMM DEX.

  • Ensure the token meets the following conditions:

    • The token is not already listed on FWX.

    • The token does not have restrictive functions like Buy/Sell Tax or trading cooldowns.

    • 99.9999% of tokens meet these criteria.

• Select Quoted Pair Asset:

  • Choose the quoted pair asset, which will serve as collateral for the trading pair.

  • Options include stablecoins like USDC or native gas tokens such as:

    • ETH on Base Chain

    • AVAX on Avalanche Chain

• List the Token:

  • Click the "List" button.

  • Behind the scenes:

    • The protocol creates an FWX lending pool for the listed token.

    • The token is integrated with the FWX trading protocol.

    • Traders can now trade the token with leverage up to 5x.

• Promote the Token:

  • After listing, FWX provides:

    • A trading link and lending pool link to share with your community.

  • Users can upload the token's image logo via a Adding Logo Image.

Crazy Degens are Over, Smart Degens are Better.

FWX introduces Smart Degens, allowing traders to trade low-cap tokens or memecoins with leverage while still considering the risk-to-reward ratio. The platform simulates the potential risks of liquidation or loss, helping traders manage their positions effectively. With 5x leverage, traders can achieve significant capital gains from memecoins while ensuring their positions remain SAFE."

Conditional Orders

FWX has already implemented conditional orders, including Limit Orders and TP/SL (Take Profit/Stop Loss) orders.

These features have been fully audited and are planned for launch in 2025.

Gasless Trading

The protocol allows users to pay gas fees with USDC or collateral, instead of the native token. Users only need to use the native token for gas twice: once to mint the FWX NFT and once to deposit collateral into the Permissionless (Leverage DEX).

The feature have been fully audited and are planned for launch in 2025.

Margin Position and Minimum Margin Required

In order for a user to take a position, collateral must be provided. The required collateral value, also known as the margin position, can range from over 100% to 20% of the notional value, which is equivalent to taking a position with leverage of 1x to 5x. The margin position can be determined using the following formula:

$$\begin{equation*} \text{margin position} = \frac{\text{collateral}+\text{profit \& loss}-\text{trading fee}-\text{interest due}}{\text{contract size}\times\text{current price}} \times 100\%. \end{equation*}$$

The user is enabled by the protocol to enter a position while limiting the portion of their collateral and the overall trading size. This portion, which corresponds to the calculated margin position, must be equal to or greater than 20% at the initial stage and is referred to as the minimum margin. The collateral used for the position that corresponds to the minimum margin is known as the minimum collateral. Although recent efforts have been made, the position margin fluctuates constantly during the opening position.

No Funding Fee – Can Be Considered as Borrowing Fee

FWX’s permissionless listing (Leverage DEX) does not charge a traditional funding fee. Instead, when a user opens a position, the protocol borrows assets from the lending pool using the protocol's over-collateralized borrowing function, based on the leverage selected by the trader. The borrowing fee is very low, similar to the trading fee. For example, if the borrowing fee is 6% APR, this would translate to approximately 0.00547% every 8 hours.

Maintenance Margin and Liquidation

In order to maintain an open position, it is necessary for the user to ensure that their balance, consisting of the collateral and profit/loss from the trade, remains at or above 15% of the present notional value. Should the user's balance fall below 15% of the trading size, the position will be forcibly closed or liquidated. The liquidation price refers to the value at which this occurs. The liquidation price for long and short positions can be determined mathematically using specific formulas.

$$\begin{align*} &\text{liquidation price}_\text{long} = \frac{\text{contract size}\times\text{entry price}+\text{interest}-\text{collateral}-\text{over collateral}}{(1-\%\, \text{maintenance margin}-\%\, \text{trading fee})\times \text{contract size}}, \\ &\text{liquidation price}_\text{short} = \frac{\text{contract size}\times\text{entry price}+\text{collateral}+\text{over collateral}}{(1+\%\, \text{maintenance margin}+\%\, \text{trading fee} )\times \text{contract size}+\text{interest}}, \end{align*}$$

• The entry price is the price of the underlying asset at which the user takes the trade

• % collateral is the ratio of the collateral value and the total trading size

• 15% is the smallest ratio of the user’s balance and the mark-to-market value of the trade.

If a liquidation occurs, the collateral will be sold at the current market price to cover the loss, and the resulting capital will be utilized to reimburse the loss. The remaining amount, after deducting the liquidation fee, will be refunded to the user.

Step-by-Step Process

Creating your own leverage trading pair is simple and straightforward. Follow our comprehensive guide to start listing your tokens and trading with leverage.

1. Creating Your Own Token

2. Setting Up a Liquidity Pool on DEX

3. Creating Your Trading Pair

4. Checking Out Your Trading Pair

You can also add logo image by follow: Adding Logo Image.