Marqet

Marqet combines AAVE credit delegation with Synthetix peer to contract exchange to uniquely provide trustless margin trading of any synthetic asset with no slippage. In traditional markets, margin trading uses borrowed funds that are usually provided by a bank or an investment broker. In cryptocurrency trading there are two kinds of margin trading platforms, those centralized which work similarly to traditional markets where the centralized exchanges act as liquidity providers or brokers and those decentralized whereas funds are provided by other traders, who earn interest based on the market demand for margin funds. Margin trading brings several advantages to investors: Amplified returns when the price of an asset is moving in your favor; Easy portfolio diversification allowing traders to open a larger number of positions using margin power with a small amount of capital as collateral; Asset management efficiency by avoiding large sums shifting between different accounts or wallets (especially interesting for spot market makers). Let’s quickly review the margin trading platforms operating within the crypto market: 1. Centralized Exchanges operating as a Liquidity Provider (e.g. Binance): funding for borrowing is provided by the exchange itself. Interest rates are entirely charged and defined by the exchange. 2. Centralized Exchanges operating as a Broker (e.g. Bitfinex): RFQ approach where the exchange is the intermediary between users who can be margin traders or lenders. Lenders express their intention to loan funds defining an interest rate they are willing to accept and the exchange keeps a “funding order book”, margin traders use the liquidity provided paying the defined borrowing rate. The exchange withholds 15% of the interests earned by the lenders as their fee.