AMA: Read to learn more about Marginswap

5 min readFeb 18, 2021
Photo by Matt Walsh on Unsplash

Q: Is Marginswap built on top of the Uniswap and Sushiswap system or a completely new DEX?

A: We are a DEX but source liquidity from Sushi and Uniswap. In the future, we hope to be connected to 1inch, curve and many more AMM

Q: So, margin trading, a beloved feature in the world of crypto, yet it’s relatively difficult for new traders, can you explain how margin trading works for the people unaware of it?

A: Let’s assume you have 1 BTC, margin gives you the power to trade up to for example 5 BTC. In essence margin trading can give a tiny fish the power of a whale and that is the beauty of leverage. It gives you the potential to exponentially increase your PNL from a trade/swap, all the while only risking a tiny % of your funds

Q: The MFI token is part of the Marginswap ecosystem, but what role does it have in this system? Is it used as a utility token? Transaction token? Or maybe a staking token?

A: The token powers the protocol, it drives adoption in every way possible.
1. It is a reward token (think fee distribution, incentives, etc)
2. Governance: After the launch of v1.0 only token holders can decide which token to activate cross margin for and initiate upgrades.
3. A collateral asset: when the token has over 10m$ in Uniswap liquidity, it can also be used as collateral to trade other assets on the protocol.
4. The token is needed in order to call liquidation on underwater trades.
So the MFI token actually powers the marginswap protocol.

Q: What are the current tokenomics for the MFI token (marketcap, holders, circ. supply, max supply)?

A: Max supply is 10m MFI and currently 5m is circulating, team token is vesting for 2 years.
3.5m tokens will be used to incentivize the usage of the protocol for about 3 years, so for as long as the token has value, the marginswap protocol will have traders and bond lenders.

Q: Is MFI already listed? What was the listing price? Was there a pre-sale?

A: Yes, MFI is already listed. The pre-sale price was 25c and the listing price was 27c

Q: Can I use the protocol now?

A: Beta version will be released at the end of Q1 to work out any bugs or issues before officially releasing V1.0

Q: Are there any audits?

A: We are engaging 2 auditors to make sure no one loses money to any bug or hack. Our first auditor will be Certik. They start the audit process on the 16th of March. After the Certik audit, we will launch the beta, and then hopefully Hacken will do a second audit of the code base and then v1.0 will begin. We are taking every precaution in the books to make sure that marginswap is safe and assets deposited by bond lenders are safe.

Q: How will the user interface work? Will it be complex to figure out what's going on? Can you give me an example of how a trade would work?

A: An example of how it would work is you have 1 eth in the marginswap fundcontroller. You come to swap eth — USDC. Click on max, which is your 1 eth, then pick your multiplier and confirm your transaction. Stylistically similar to the Uniswap interface but with a leverage multiplier. Our ideal traders are actually users of Uniswap and Sushiswap. So, in the v1.0 of marginswap, we want to make the transition from the above protocols to marginswap as painless as possible. It will feel like Uniswap but everything behind that UI is built from scratch and unique in every way.

Q: Why is Marginswap the project that will succeed in providing such an innovative feature to the DEX space?

A: Marginswap is currently the only on-chain protocol that will be offering cross-margin trading. Even dydx doesn’t and that is because of the complexity involved in setting up and maintaining something like this.

Q: Why isn’t there a whitepaper? Why is the roadmap so short?

A: The previous question gives some insight as to why there’s no whitepaper yet. We didn’t release a whitepaper because we want the freedom to change and adapt to new concepts as we build. When we first began, we thought oh we can list any token with over 4m$ in liquidity but after chatting with an insurance company, it was immediately clear that 4m$ liquidity is way too small for a cross margin protocol, and because we have this freedom to adapt, we quickly changed this limit. This is also why the roadmap ends after releasing version 1, the feedback from the community is what will determine the path after version 1 is released. This protocol is built to serve the community and the community will have due influence in its future.

Q: Which problems do you perceive in innovating the DEX industry in such a way and how do you plan on solving them?

A: The major problem and one we’ve tried hard to solve is the issue of flash loans manipulating the price of tokens trading on marginswap. A number of protocols have lost millions as a result of this and we don’t want to be one of these protocols. Flash loan attacks will be addressed by preventing smart contracts that are not trusted or whitelisted from trading on marginswap.

Q: Currently, what tokens does Marginswap support for margin trading? Are they all tokens, or just a few tokens? If it’s only a few tokens, will you add more tokens in the future?

A: We currently are vetting about a dozen tokens and also at the same time trying to secure lenders for these tokens. We plan to support a ton of tokens and in the future maybe v1.5 or later, we will have isolated margin for all tokens

Q: Can you give us a reason why we should choose Marginswap? What can be done at Marginswap? And what are the advantages of Marginswap compared to others?

A: About 4000 MFI token will be distributed daily to traders, bond lenders, mfi-usdc liquidity providers. This is to incentivize continuous usage of the protocol. Furthermore, we will be able to list new shiny tokens faster than any CEX out there.

Q: Do you have plans to buy back/burn tokens to increase value?

A: No, we prefer to give it back to the community or store it in the treasury. Buyback and burn is pointless. It does nothing to uplift the protocol. Our primary goal is to ensure a successful protocol that people will use for years to come.

Q: There are many alternative DEX platforms for users. It looks like there will be a tough competition between these platforms. Do you have a reward mechanism to encourage users to trade on the Marginswap platform?

A: Yes, the token is designed to drive adoption.