Kwenta is a platform that leverages Synthetix’s pooled-liquidity protocol and allows users to trade synthetic commodities, equities, cryptocurrencies, and more, all with “infinite” liquidity. Kwenta went live on October 15, 2020.
On October 15, 2020, Synthetix, the leading derivatives protocol showcased its newest exchange product called Kwenta, providing slippage-free trading of derivative tokens.
Kwenta has a simple user interface, which benefits from the absence of order books and depth charts. Instead, users see price charts for each of the two assets they are trading between, as well as an exchange window that is similar to that of Uniswap. The exchange is completely non-custodial, requiring the use of a web 3.0 wallet such as MetaMask.
Kwenta currently facilitates the trading of three different classes of derivatives including cryptocurrencies, forex, and commodities such as gold and silver. A fourth tab exists for equity derivatives, however, there are not yet any of these available for trading.
Kwenta is built on the Synthetix protocol, so the Synth liquidity traders can access on Kwenta is entirely created by SNX stakers on Synthetix. There are no direct counterparties for each trade in the Synthetix protocol, but it does use a counterparty-like model in which SNX stakers assume a proportion of the Synthetix debt pool when they mint sUSD. Transactions cost a certain amount proportional to how much processing power is required for Ethereum miners to process it. Kwenta uses the Synthetix protocol, which is far more complex than the majority of other Ethereum projects, so its transactions require more gas to be executed.
Restriction to Synths
Al trading on Kwenta must be performed between Synthetix derivatives, known as “Synths”, due to the way the protocol works. To make things easier for new users, Kwenta provides an easy on-ramp for ETH holders via a 1inch.exchange integration, enabling a quick switch from ETH to Synthetix’s main stablecoin, sUSD. From here, users can trade between Synths with almost unlimited liquidity.
How It Works
A user can start trading on Kwenta in 3 steps:
- Kwenta is on the Ethereum blockchain, so like all other dApps on Ethereum, it requires a web3 wallet with ETH in it as gas to pay for transactions to be processed. Popular cryptocurrency wallet categories include hardware wallets, browser extension wallets, and mobile wallets.
- To start trading, a user will need a synthetic asset derivative supported by Kwenta, known as Synths. The most accessible Synth is sUSD, which can be purchased on dApps such as Uniswap, Curve Finance, or 1inch.exchange.
- Once a user has got sUSD or any other Synth, they can trade between the entire range of Synths to craft a diverse portfolio of assets, all on-chain and without surrendering custody to an exchange.
Kwenta Pass - NFT that Kwenta Elite members received at their given address
In October 2020, a week before Kwenta's official launch, the Synthetix team created the Kwenta Elite group for the most active Synth and DEX traders. Kwenta Elite members received early access to the exchange and were tasked with providing their initial feedback on their experience. This feedback was used to improve the exchange prior to the public launch. They also received the special NFT at their given address. This NFT was created with the help of the Meme ($MEME) team.
Kwenta enables traders to access derivatives on-chain with leverage using the power of the Synthetix protocol.
Traders can long or short popular synthetic cryptocurrencies, commodities, forex, and equities without the limits or compromises of a centralized exchange. Kwenta lives on Optimism as well as L1, offering users low gas fees and near instant transactions.
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