In 2020, during the early stages of the rise of DeFi, bZx Protocol (BZRX) gained significant prominence. At that time, the crypto community referred to the project as “BitMex without KYC.” Initially, the platform was known for the limitations of decentralised exchanges and the lack of trading instruments. However, later, they aimed to bring everything that centralised exchanges had to offer to the platform. Thus, the team aimed to revolutionize the DEX space.
After three impressive hack events in a year, bZx’s temporary fame was lost due to the community’s distrust of the team’s security. However, after about six months, the decentralised trading platform started to continue its path to reach its lost goals. The project’s core idea is clear, but many still do not understand what bZx is exactly trying to offer. In this article of Zatrun.com, you can find everything you need to know about the project.
What is bZx Protocol (BZRX)?
bZx Protocol is a DeFi protocol built on Ethereum. This protocol focuses on lending and margin trading. The project’s initial concept was created in August 2017 by co-founders Kyle Kistner and Tom Bean. A year later, Bean and Kistner completed the whitepaper and held an initial token sale to raise $7.8 million. The project’s origins begin with Fulcrum, the protocol’s trading platform, officially released in June 2019. The team later introduced Torque, a lending platform, in October.
bZx quickly attracted a large part of the crypto community due to its decentralised nature. Some users were uncomfortable with trading on centralised exchanges (CEX) like Binance, Kraken, and Coinbase. Now, these users would have the opportunity to trade on a decentralised exchange (DEX) like bZx and apply for loans.
Regulatory uncertainty and malicious management are the main reasons a trader wants to trade on a decentralised platform instead of a centralised platform. When combined with the rise of methods like Know Your Customer (KYC), restrictions have put platforms like bZx Protocol in the spotlight of the crypto market.
How Does bZx Protocol Work?
bZx Protocol is based on the use of iToken, pToken, and BZRX coin. The system operates through the use of iToken and pToken in lending and borrowing. Lenders who provide liquidity to the project’s pools redeem iToken, representing a user’s share in the provided funds. iToken also helps generate interest for the provided funds, allowing everyone to redeem the token and earn the interest earned along with the principal funds.
On the other hand, traders who borrow to open margin positions in the crypto markets acquire pTokens. This token represents the user’s position, and the type of token received usually depends on the position opened. pTokens are usually determined by the trading pair of the position. For example, a pToken that represents a 10x long position in the Bitcoin/USDT trading pair is named ‘uLBTC10x’. This allows users to manage tokenised assets.
What is BZRX Token? Is It a Good Investment?
The bZx Protocol, which works with cryptocurrencies such as iToken and pToken, also has its own cryptocurrency called BZRX coin. This coin acts as the protocol’s utility token. Like centralised exchanges such as Binance and KuCoin, traders can use BZRX coin to pay fees, access certain events, or unlock more features. However, the project’s decentralised structure also allows BZRX coin holders to participate in management and make changes.
Therefore, users who hold the token can participate in the platform’s management and vote in decisions that shape the exchange’s future. This voting model ensures the ecosystem remains decentralised. BZRX coin, a stakeable cryptocurrency, rewards its holders with benefits such as passive income.
Since the beginning of 2020, the DeFi sector has focused on the chaotic transformation of the community financial system. With solutions like bZx Protocol, market participants are increasingly interested in moving to decentralised and risk-free platforms. However, we have only scratched the surface of projects like DeFi trading protocols. Projects like BZRX coin are still maturing and are not yet at a level where billions of dollars in trading volume can be securely processed.
In 2020, the project was a victim of three separate hack attacks. These events, which posed a significant security risk, caused investors to migrate to other platforms in hopes of finding a more stable solution. However, the platform’s story is not yet over. Recently, BZRX coin rebranded as Ooki Protocol (OOKI), and this platform is currently the 649th largest cryptocurrency project.
