Overview
Marginal is a permissionless decentralized exchange (DEX) specializing in spot and perpetual trading with leverage. It operates as a decentralized autonomous organization (DAO), governed by token holders. The platform is built to facilitate overcollateralized short-selling, where interest rates are managed through a perpetual funding rate. This structure allows Marginal to offer leveraged trading on diverse assets by leveraging Uniswap V3 Oracles to support accurate pricing.
Mission and Vision
Marginal’s mission is to democratize leveraged trading by creating a DeFi Hyperstructure that parallels the “Uniswap moment” for derivatives trading. By establishing an open AMM, Marginal aims to provide on-chain, permissionless access to derivatives, enabling broader participation in the DeFi space.
Key Components
Trading
The Marginal platform supports both spot and perpetual trading with leverage, employing an Automated Market Maker (AMM) model. This model relies on liquidity providers (LPs) who deposit assets into the AMM pools, allowing traders to leverage these pools for trades.
Insurance Fund
To protect against potential losses and ensure sustainability, Marginal maintains an Insurance Fund that compensates LPs in case of extreme market volatility or protocol-related losses. The Insurance Fund is funded through trading fees and ensures consistent liquidity provision.
Funding Rate
Marginal uses a funding rate mechanism that adjusts interest rates based on the AMM pool’s collateral levels and the prevailing trading volume. This rate incentivizes a balance between long and short positions and helps to stabilize the platform.
Tokenomics and Governance
The Marginal Token (MARG) plays a central role in the platform’s governance, incentivizing participation from traders, LPs, and token holders. Through voting, MARG holders make key protocol decisions, such as adjusting trading fees or fund allocations.
Security and Audits
Marginal places a high emphasis on security. The protocol has undergone multiple audits, and its smart contracts are reviewed regularly to ensure robustness against vulnerabilities. Additionally, multisig wallets are employed to safeguard funds, adding another layer of security.
Development and Future Goals
Marginal aims to continually evolve its AMM infrastructure, enhancing liquidity and expanding its asset offerings. Planned developments include integrating additional oracle solutions, enhancing leverage options, and expanding protocol governance to include more user input.
