Gamified Derivatives Market
Total value locked (TVL)
TSN is a Tsunami Governance and Staking token, that allows you to participate in critical protocol desicion making. Stakers of TSN gets a share in all protocol earnings from fees.
Tsunami AMA [30 Nov 2022]
First, let's look at the existing Tsunami model. It is a decentralized perpetual futures trading platform based on vAMM model, so we do not use real assets for trading, but use their feed prices from oracle.
In Tsunami, we can create markets for any of existing assets, be it crypto, commodities, forex, stock, indexes, etc.
From a technical point of view, we can already expand the leverage up to x5 and we plan to further increase it to x10 for crypto and up to x125 for forex in a next version. 50% of all trading fees on Tsunami are sent to $TSN token stakers, which will gain more utility with the release of Tsunami 2.0.
So, what are Perpetual Futures?
You probably know what they are. Its cash-settled contracts may be launched on any asset with price feed. Convergence of market price and feed price is incentivized by funding payment.
What can you do on Tsunami during the bear market? Aside from trading, you can hedge your risks, of course. You can split your capital into 3 parts: 1 - convert USDN to Waves in USDN/Waves pair 2 - add USDN and Waves to staking and farm nice APY 3 - hedge risks from Waves price fluctuations using Tsunami. Open a short position with x1-x5 leverage and enjoy a non-risky 40% APY of your total investment!
This is just one way of how you can use Tsunami and futures, and you can also play with a high leverage!
We delivered protocol version 1.0, and it has been deployed right now on the mainnet.
Up to 150 daily users the volume was as high as 1.5M
We have over 1000 $TSN holders
And all these with only 15 trading pairs on Exchange right now.
However, we have been running into some problems, and we still do. What are these problems?
1 - Low liquidity, and hence high price impact. It’s actually comparable with other Waves DeFi products like Puzzle, Swop.Fi, but the price impact is still huge. For example, if you want to trade with 5,000 USDN, the PI will be about 5%, which is not ideal especially for derivatives DEX that allows using high leverage.
2 - Market price is not following Index price (feed price). This is because the current model requires the market to have more and more open interest to push the prices from the initial AMM initialization price. It works quite well when markets are flat, which we saw in early Autumn, but currently as we can see it’s not working ideal and there is a big gap between the prices.
3 - Non-dynamic trading. With only a few trades per hour it makes again the MP not following the IP, trading experience gets just bad, the candles are not very informative and so on.
4 - Funding does not always work as intended. The funding should go to those having lower open interest, but currently it’s often the other way around. So if you’re on the unpopular side, you will pay a lot of funding and get bad trading experience.
All these problems have been gradually addressed and now we are approaching a complete redesign of how the protocol works.
2.0 Design will bring a lot of innovation to our protocol, which is its fully dynamic automatic market maker and an Omni-Vault. Let’s talk about the advantages which the 2.0 model will bring us.
1 - The new model will require liquidity providers and the funds from LP will be used as a counter-position to traders. Due to the Omni-Vault design all the liquidity for all the markets will be provided with a single vault. In exchange for positional risk, liquidity providers will receive funds from fees collected, negative PnL and liquidation penalties collected by all market-makers. We hope that providing liquidity toTsunami is going to be very profitable.
2 - With up to 10M of virtual liquidity in each AMM, Tsunami will become the most liquid product on Waves, and the Price Impact will be very low.
3 - Due to the dynamic nature of the new AMM, the MP will basically follow the IP. And traders will have price updates every 2-3 seconds. We are using an oracle collecting feed prices from 5 of the most popular spot exchanges like Binance, Coinbase and so on.
Let’s see how it works. The dynamic AMM is what we had in mind initially.
It will adjust the curve so that liquidity concentrates at IP. If all traders close their positions, the AMM price will be equal to the index price. This allows us to add more liquidity to each AMM, and Price Impact will be really low. It still allows trades on Tsunami to affect market price - if there are more longs than shorts - the price will be slightly higher than index price, and vice versa. It creates arbitrage opportunities for traders with the other exchanges (spot or perp), that brings more volume. This finally will make the funding work as intended because the side with more open interest will pay funding and the side with less open interest will receive it. And again the new design will provide real time trading, and you will be able to trade on Tsunami like on every normal perpetual futures exchange.
What is Omni-Vault?
The Omni-Vault is the vault where all the liquidity goes to, and this is something different from the current Tsunami trading works. The current Tsunami works with no liquidity providers, because basically traders provide liquidity to each other. So the only way to change the price on the current design can be through trades.
The new design will assume liquidity providers because the price can now follow the oracle, and it’s not dependent only on how you trade on Tsunami but also on some external conditions. This means that the cumulative traders PnL can now be positive or negative, and trader’s can win not only due to some other trader loss. It is why we need some external liquidity to serve as a counter-position to winning trades.
This liquidity is provided by liquidity providers. They take the risk that their funds will be used to pay positive PnL to traders, but Tsunami protocol will compensate them for this risk. LP will get the most of the funds collected from trading fees, and also they get their part of user’s liquidations and negative PnL.
Let’s look on the right side of the slide:
What actually goes to the Omni-Vault is the external liquidity, and we also put to the vault all the collateral, all the fees, all the negative PnL and liquidations as well. And we take the collateral from the vault when traders close positions with a positive PnL.
What’s interesting though is that cumulatively, traders lose just a little bit. This is a consistent picture across all the perpetual futures exchanges taken from gTrade on-chain analytics, but it is the same across the market. Here you can see that LPs can gain on the Long time and lose on the Short time, they can compensate it with protocol fees and negative PnL. On average, net cumulative ROI of traders is around negative 5%.
With 2.0 design, we want to raise our volume at least 10 times. The $15,000 daily fees will make the price of $25 of $TSN token, given a fixed staking APR of 20%.
Let’s compare the 2.0 and 1.0 design.
1.0 has maximum x5 leverage and 2.0 will allow up to x10 leverage for crypto markets and up to x125 on forex markets.
The main thing is probably the liquidity per market. Now we have $500k-1M in Waves or Pluto pairs, but with the new design we will have $10M+ per market, which is more than the Waves ecosystem can offer in spot exchanges. With the 2.0 version, we will make the prices spread as low as 0.05 - 1% in case of high market volatility.
The MP will be updated almost every second.
We will use the ability to stake USDN and earn real yield because of the protocol. We will have up to 50 different markets.
What are perspectives?
Volume per 24h with all perpetual futures is $600 BN. It's an unimaginable number!
With the FTX crash, demand for on-chain trading is as high as ever. Traders on centralized exchanges can not be sure that they have enough in reserve to pay them back, so the audience goes to the decentralized on-chain trading.
People want to deposit funds in non-ETH chains, using L1 blockchain security such as Waves.
We are going to support Metamask in the near future, so users can bridge their deposits and their funds from Ethereum to Waves using Metamask. That will allow us to bring new users and onboard them to the Waves ecosystem. What we build here is a product that can be competitive on the global crypto-market.
All these numbers are more than other derivatives exchanges can offer to users.
The market is not consolidated. There are a lot of new people going to crypto and as a result people choose decentralized exchanges instead of centralized. TSN stakers and liquidity providers will earn real yield.
What is more, Tsunami offers commodities, forex, stock, all in one interface without KYC and without custodian.
This allows us to build a product that can be really competitive with other products on this market. I don’t personally think that any DeFi product can offer all of this.
Q1: Just to clarify - where do you absorb any traditional assets? Which kind of assets will be absorbed?
A1: First, we are not trading any real assets, we are just using a price feed on them, the price feed comes from an aggregator that aggregates prices from 5-7 different commodities exchanges. Now we have Gold and Oil, we will expand the list with probably some kind of metals and wheat. So the most popular commodities assets will be tradable.
Q2: Few days before we have heard of many attacks on AMM DEX which caused loss of millions of Dollars, Please tell me how #Tsunami provide good Security for its users? Do you have a Bug Bounty program to check your platform's vulnerabilities?
A2: The fun part was when we launched 1.0, probably 1 week after the launch, there was an attack on our protocol. Some guys tried to manipulate the price. They actually failed, but I had some gray hairs after that, ha-ha.
First, we currently are doing the audit process of 2.0 smart-contracts. Second, we don’t have a bug bounty program right now, but you can always DM me, if you find any bugs in protocol, feel free to DM me, we will work it out definitely!
As to the guys who tried to hack us, their funds got stuck in the Tsunami, and before we gave them their funds back, they performed a kind of audit for us as well.
Also, we are going to release 2.0 testnet. Maybe in a couple of weeks. There will be a trading competition to yield a $TSN token, and we could spot any glitches or exploitation, there are on the testnet.
Q3: What features from WXNetwork do you find interesting to implement on Tsunami Exchange?
A3: I think it’s the governance, but for 1 year what you can do in WXNetwork is to vote for new pairs. Is it worth the effort of developers to do it? Would you rather get the core functions done for better trading? I would shift my focus to trading rather than doing the governance thing right now.
Q4: What is going to be the percentage on the commissions for inviting a user to create an account on the platform that the referral will be getting?
A4: The referrer account will get 20% of referrals fees in $TSN.
Q5: Can you add Forex?
A5: Yes, the Forex will be there really soon!
Q6: Is the name Tsunami related to the name Waves?
A6: Yeah, for sure. Tsunami is a big Wave, a nice name for a leveraged product. It’s a play on words, of course.
Q7: How do you see the Tsunami in some years?
A7: I think the Tsunami will be a cross-chain derivatives market due to the ease of onboarding new traders, wide variety of assets, and new gamification mechanics.
Q8: GMX is one of the gems in Web3. Will the Tsunami grow to its scale?
A8: Basically GMX is one of inspirations for Tsunami of course. They are doing the right things. They have omni-pool, they have cool trading mechanics. We hope the Tsunami will be competitive with GMX.
Q9: There will be USDN staking in the new update, in what way will that help the Tsunami ? And how will that benefit the stakers?
A9: Let me explain what USDN staking will be. USDN staking is here to provide liquidity to Tsunami in case overall trading PnL is positive. When there are not enough funds for traders to pay each other PnL we need to have some extra funds where we can take USDN from to pay traders. In exchange, LP will collect the protocol fees, liquidation penalties and negative PnL. This will allow the price to shift based on external oracle. Currently, the price shifts only if someone trades, and the trading experience is bad. We will offer good trading experience, but for this we need some buffer funds. It will be explained in detail in upcoming articles, and updated whitepaper.
Q10: Any spoilers about NFTs?
A10: You have probably all seen our leaderboards, they fully support NFTs. If you participate in trading competitions, you will get NFTs for a fees discount, it has already been implemented. And we plan to have more utility NFTs, they will provide any tiers of fee-discount, maybe staking-boosting and so on. The big thing we are planning to do next year is the launch of NFT avatars, which you can upgrade depending on your trading results.
Q11: Any plans to attract new users?
A11: We plan to implement a Metamask support, and we plan to make a marketing campaign to attract not only Waves users, but crypto users in general. We hope our marketing can help not only Tsunami, but all the Waves ecosystem as well.
Q12: Do you have any relationship with Mundo Crypto?
A12: We don’t, but we’d like them to at least host an AMA for us.
Q13: Are you considering adding lockup for $TSN or USDN staking?
A13: There will definitely be lockup for USDN staking, so you can not withdraw all the liquidity immediately, there will be a delay, so probably you will be able to withdraw 25% of your liquidity provided. And we plan to introduce a lockup for $TSN staking to make a higher weight of $TSN in the pool.
Q14: Is there a place to learn trading for beginners like me who are new to Tsunami Exchange?
A14: We will try to add some basic materials on how to trade on Tsunami, but there are a lot of materials about how to trade on Google.
Q15: In which region do you have your company?
A15: We don’t have any company, we are DeFi fully on-chain protocol that will be governed by DAO.
Q16: When will we see improved charts?
A16: We are actually using a trading view chart right now, you can DM me, and we can discuss charts. We probably can add a switcher to choose between simple and pro mode.
Q17: Where can we find the smart contracts where the tokens described in the tokenomics were distributed?
A17: We will publish it in the new whitepaper.
Q18: When will Tsunami 2.0 be launched?
A18: After the testnet is ready. And the testnet will be ready the week after next week.
Thank you for your amazing questions, it was a very productive AMA, stay tuned and have a nice day!
Tsunami Exchange - easy peasy futures squeezy
Hello friends, as many users of the Waves ecosystem know, just recently the first futures trading platform was born in it, one which many experienced traders on the Waves Exchange has been missing so much.
Today, we will talk about what this platform is, how to use it correctly, and what pitfalls you should pay attention for so that not to lose your deposit at the first use. So, Tsunami Exchange - easier than is looks, let's go! 🚀
What are futures and how to make money on them?
Before we get into the workings of the exchange itself, we should dive into such a concept as futures, and why they can bring good profits in the hands of understanding traders.
A futures, or future contract, is a derivative security or derivative.
Tsunami uses perpetual futures, the distinctive feature of which is the absence of an expiration date. We can easily hold a position for as long as we want.
Perpetual futures are a popular way of earning for many traders around the world, and there are many reasons for that fact:
we have no need to buy and sell a real asset;
we can increase the size of collateral for a position by using leverage;
we can hedge risk if the price of the asset we bought on the spot trade moves down.
It sounds pretty complicated, but I'm sure it will make a lot more sense to you as you read!
Tsunami Exchange - what is the beast?
When we first get acquainted with the exchange, we find ourselves on a pleasant website with a fresh design, pointing out the main points with which it would be nice to get acquainted before the first approach to trade. Now in order. What is the Tsunami Exchange?
According to the official documentation,
"Tsunami Exchange is a gamified derivatives market based on virtual AMM, which allows trading any assets - cryptocurrencies, NFT, commodities (oil, gas, etc.)."
And now let's understand what all these complex terms mean, in language we can understand.
Gamification - the adding of game mechanics into the project, helping the project to become more exciting and understandable for users. In Tsunami’s case the gameplay will be built on trading competitions between users and adding interactive NFT-avatars, which, in turn, will act as artifacts that somehow increase your income.
Warning - Spoiler below😱
Simply put, derivatives are instruments whose value is linked to an asset on the market. But how do derivatives participate in the market? The thing is that Tsunami does not use real assets for trading - be it Waves, EGG, Pluto, etc. We don't need to buy Waves to start trading, it is enough to have USDN in your account, which in turn is already used by the exchange when we open new positions.
If you, like me, follow the news in the DeFi world, you probably noticed that AMM is a rather frequently used word lately, but can we confidently say that we know what it is? AMM (automated market maker) is an exchange that allows instant transactions in which the exchange price depends only on the number of tokens stored on the smart contract at the moment.
The word "virtual" means that a smart contract does not hold real assets, but instead holds a USDN pledge in a separate vault that allows us to buy virtual assets from AMM pools. Thus, the AMM in Tsunami acts as a conductor of prices at which we open our positions.
I congratulate you, we have figured out the definition. Let's move on!
Interface: simplicity is the key to success
The first time you open a Tsunami trading application, it seems as if you can't keep your eyes open. But is it really that complicated? Let's evaluate the situation.
In the block on the left we see the pairs which are already added to Tsunami and are successfully traded in real time. Above it - a small but extremely useful block Portfolio, which reflects the status of all our positions, profit or loss.
In the main field of the site is a visual display of the chart of the open trading pair, where we can change the time intervals of the display for our convenience.
Let's look up into the space above the chart and move on to the most useful part - the prices. Here we see 2 prices: Market Price and Index Price. Why 2 and why they are different is a fair question, I’ll tell you.
Index Price is updated due to special oracles - services which collect information on the price of an asset from various exchanges, and reflect the real value of the asset for which we can buy it on the spot trade.
Market price, in turn, is formed by the open positions of traders who, informally speaking, place bets on the direction in which the Index Price will move in the future.
It is due to the difference between these two prices the magic happens and we can make a profit!
Tsunami trading - is it real to make money?
So, friends, if you have reached this point, you are ready to conquer the waves, and no obstacles will not stop you. It's time to experience the tsunami of emotions of a real trader - start trading!
Let's assume that we already have experience in trading and we know why we open long and short positions so we don’t have to focus on these details.
To understand how trading at Tsunami happens, we need to break down a new term: funding. Funding is payments made by traders every hour, depending on market conditions. If Market Price is higher than Index Price, longs pay shorts, and conversely, if Market Price is lower than the Index Price, shorts pay longs. The size of the payment depends on the price difference as well as the size of our position.
If you have had any experience with futures exchanges, you already know about fundings, as they are the most popular mechanism for bringing our two prices closer together. Let's look at an example.
In the image above, we see that funding is paid by traders who have opened long positions, while "shorts" in turn earn 0.40% profit per hour. The funding mechanism helps to encourage traders to close unprofitable positions and open new ones, even if they are directed in the opposite direction to the market.
Sometimes it happens so that a trader has opened a position in the "correct" direction, i.e. has foreseen the Index Price movement, but such movement has turned out to be quite obvious for other traders who have also opened positions in that direction. An imbalance was formed on the market. Because most traders have opened positions in one direction, there is no support for the fundings, and traders wait for either opening positions in the opposite direction, or for the price change.
To avoid such situations in the future, a dynamic curve will be introduced. It is a tool that moves Market Price closer to Index Price automatically, without traders opening new consciously "losing" positions.
So, let's assume that we are risky guys, and we decided to understand the Tsunami work empirically , or "by trial and error”. When we open a position in one direction or another, we see a suggestion on the interface to add Leverage to the position.
Financial Leverage is the ratio of a trader's money to the total amount of money he or she trades. But where does the extra money come from to provide the increase of our position?
The thing is that we don't need additional "real" assets to increase our position. All that vAMM works with is the USDN security that the user provides when he opens a position. It is as if we are saying: I have 100 USDN, but let's open a position for as many units of an asset as if I were giving 200 USDN. And vAMM answers: ok, but then I will have to move the price of your position closer to the current open price, ok?
Thanks to the example above we understand how vAMM works and why it is more efficient than using a regular AMM.
Every time we open a new position, we pay 1% fees, half of which goes to the $TSN staking rewards and the other half to an insurance fund that helps stabilize the protocol and close unprofitable positions.
When trading on futures exchanges, there are often sharp changes in price that can lead to the liquidation of our open positions.
In order to allow users to trade on Tsunami without fear of losing the security of their entire position, Tsunami Exchange has introduced a mechanism of partial liquidation.
Partial liquidation is the process in which if the Margin Ratio falls below 8%, the users' position will not be liquidated completely, but only that part of it, which will be enough to restore the Margin Ratio to a level above 8%.
At one time can be liquidated at least 15% of the current volume of the open position. If the Margin Ratio of our position falls to 1% or lower, the position will be liquidated in full.
With the introduction of the partial liquidation of our funds remain safe for as long as possible, which helps to make trading on the Tsunami Exchange more comfortable and reduces the risk of losses for users.
Well, now you're almost experts in the world of Tsunami, so let's break down the most interesting things, the things that were left to the sweet - the additional plusses that will help us to increase our income.
Quite often when launching new products to attract new users and maintain their interest, teams launch rewards programs for early users, so we got to one of the nicest parts of learning the Tsunami world with you - the bounty or user rewards.
By increasing your trading volume on Tsunami, you help the exchange grow and expand, so the team has introduced additional rewards for trading and liquidity replenishment. The amount you can earn depends on the amount of commissions you have paid for a special period of 1 week. The time until the end of the current period is displayed in the "Rewards" tab.
How to receive the reward?
Every time you open a new position, we pay a fee of 1%. According to the tokenomics of the project, the team puts aside up to 1000 $TSN per week for the users' rewards, so we can easily earn up to 200% from fees in $TSN token, and for some pairs there are additional conditions, where we can earn 200% in tokens of this pair on top! The more open positions in a week, the better.
Another factor for earning rewards is the average size of open positions. For example - 3 days a week there was an open position for 1000 USDN, and 4 days - 0 (no open positions). Then the average position size will be calculated as 3/7*1000 + 4/7*0. If you have not opened any new positions for the period, fees will not be taken into account.
So, in order to get the maximum number of rewards plus our profits, you need to actively trade during the week and keep the position open as long as possible. That's it!
Staking/ Farming of $TSN
The $TSN token is positioned as a management token with which you can make decisions about the future of the exchange together with the team. In the near future, the token will be added to well-known services for cryptocurrency monitoring - CMC, Coin Gecko, DeFi Lama, etc.
Let's imagine that you took your rewards from the trade and go to pour them into the glass. Take your time, with a $TSN token you can earn more. Stakers get 0.5% of the volume of all trades that take place on the Tsunami Exchange. Imagine a volume of several million USDN per day. Can you imagine that?
In addition, according to roadmap the Tsunami Exchange team recently implemented a Farming feature that reinvests your $TSN tokens, automatically redeeming them with a contract and depositing them into your wallet without additional transactions!
While you plan to dump your earned $TSN in the market, farming APY plans to go to the moon (or Pluto, who knows).
Today we got acquainted with Tsunami Exchange, learned how to trade and earn profit, became masters in investing tokens and figured out how to get rewards for it all.
Trading on Tsunami was not as hard as it seems at first glance! You can always practice by opening a position for 5-10 USDN and follow the price changes.
Below you will find all the relevant links to the Tsunami Exchange. Thank you for being with us!
Website - https://tsunami.exchange
News channel - https://t.me/tsunami_exchange
Twitter - https://twitter.com/ExchangeTsunami
Documentation - Tsunami Documentation | docusaurus | Tsunami
Thank you for reading! Your Tsunami team 🌊
It's November, so it's time to tell you what we accomplished last month at Tsunami Exchange. Wrap up in your plaid and enjoy reading! 🤲
October greeted us with a fall warmth as we passed the 1,150,000 USDN mark in daily volume for the first time. Organic growth and more and more arbitrage participants joining the project is helping the market price become more reliably tied to the index price. How you start the month is how you spend it, we at Tsunami started it positively!
The month was full of great updates! We added a new trading pair SURF/USDN which was received positively by the users and the volume of SURF trading has already exceeded 40% of all Tsunami trades.
One of the most important launches of the month is the addition of the commodities our users have been waiting for. Brent Oil and Gold are already trading on Tsunami with trading volume of over 46% of all trades.
The introduction of commodities was one of the biggest steps in Tsunami's development, adding an opportunity for investors to diversify the risks of their portfolios and not depend on the volatility of the cryptocurrency market. We certainly do not even think to stop and will continue adding new commodity assets in the future so that our users always have a choice even among such low-risk assets.
A new direction for us has become holding trading competitions, the first of which - Waves To Pluto Trade Competition was so warmly received by our traders. After successfully completing the first contest, where the participants earned more than 7,000 USDN of profit, we saw your interest, and therefore launched a new contest with prizes of more than $2,500 - Waves Surfers Trade Competition.
If you are ready to try your hand at surfing the waves, join our competition, the detailed conditions of which you can always find here. Don't miss your chance to compete against active and novice traders, not forgetting our ongoing rewards for open positions in $TSN tokens.
Another major update in October was the introduction of Farming, which allows $TSN token holders to auto compound their tokens without additional transactions. At the same time, the smart-contract makes a daily buyback of $TSN, which positively affects the dynamics of the price and increases investors' profits. Users, in turn, retain the ability to claim their tokens back at any time. Isn't that great?
Now a little bit about the numbers. Daily trading volume on Tsunami continues to delight us with healthy growth, which affects the profits of stackers and farmers. So, compared to September's numbers, the average daily trading volume in October was 372,000 USDN, twice as much as the same figures in September.
After the addition of farming, the APR of the staking in October held at 20-45%, and the APY of the farming was 25-50% daily. Something to think about, maybe now is the perfect time to buy $TSN? 😏
So, October turned out to be a very fruitful month both in the technical part and in the investment part.
Tsunami team continues to work at the same pace and delight our users with cool updates and really useful features. Leaderboards development, NFT-collection, new partnerships and much more - all this awaits you in the near future. Follow our chat, news channel and Twitter to make sure you don't miss anything interesting! 🌊
Farming $TSN on Tsunami Exchange
For our users who want to earn a higher percentage of income from staking in $TSN tokens, we are introducing a new form of staking.
Tsunami users can now earn a higher percentage APY on their deposit, while increasing their $TSN token holdings and their income, through compound interest and a better $TSN price trend. Meet Farming on Tsunami Exchange.
How does it work and why will the $TSN price increase?
We created a special smart contract for Farming launch. Farming contract accepts $TSN token, and stakes it on behalf of itself.
Once per day, Farming contract withdraws all of its rewards in $USDN, exchanges them to $TSN token using Puzzle Swap.
The resulting $TSN are staked again to ensure proper recapitalization of capital.
Resulting $TSN are distributed between farmers using the same formula as staking.
As we can see, everything is quite simple and straightforward to use. By creating a compound interest, the user doesn't have to take care of his rewards and claim them himself, it saves him from unnecessary actions and transaction fees.
An important clarification, Farming does not lock $TSN tokens on the contract, so users can claim their rewards or originally send tokens to the Farming at any time.
Working on Tsunami Exchange we always think about the convenience of our users and the functionality of the entire exchange as a whole. That's why we will be glad to hear your comments and feedback about the new Farming feature to be added.
Commodities on Tsunami Exchange
Commodity assets occupy a vast market share and are one of the most important tools of the economy around the world. A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of commodities include grains, gold, beef, oil, and natural gas.
For investors, commodities can be an important way to diversify their portfolios beyond traditional assets. Because the prices of commodities tend to move in opposition to crypto and stocks, some investors also rely on commodities during periods of market volatility to hedge their risks.
Usually, commodities trading required significant amounts of time, money, and expertise, and using specialized apps. That is why Tsunami Exchange will be the first place on Waves that gives users the opportunity to trade commodities without requiring additional tools and without leaving the Waves ecosystem!
What is being traded on Tsunami?
As you already know, Tsunami Exchange specializes in futures contracts as the main method of trading. Now we will take a closer look at how it works, using commodities as an example.
One way to invest in commodities is through a futures contract. A futures contract is a legal agreement to buy or sell a particular commodity asset at a predetermined price at a specified time in the future. The buyer of a futures contract is taking on the obligation to buy and receive the underlying commodity when the futures contract expires. Usually, speculative retail investors hope to profit from changes in the price of the futures contract. Thus, they never take actual delivery of the commodity itself. This allows us to design a specific instrument that tracks the price of an underlying asset without the need to hold or supply an actual asset.
Tsunami introduces what’s mainly resemble an Exchange-traded note (ETN). ETNs are a way of participation for investors who are interested in entering the commodities market. ETN allow investors to potentially profit from fluctuations in commodity prices without investing directly in commodities.
ETNs are backed by traders' collateral. The changes in the price of the asset and its dynamics are determined by the counter-positions of the participants. The mechanics of the vAMM smart contract encourages traders to open and hold positions aimed at the maximum convergence of the Tsunami futures price with the commodity index price.
Why is the addition of commodities on Tsunami a unique step in the development of DeFi on Waves?
Commodities are always liquid, as a large part of the global economy is tied to them;
Commodities assets are collateral in the real world (oil, gold, gas, etc.);
Investment in commodity will help diversify the investor's portfolio and hedge trading risks;
Commodities are independent of the cryptocurrency market and are not subject to sharp periods of volatility;
Commodities have been added to the Waves ecosystem for trading for the first time.
The first commodity available for trading on Tsunami will be Brent oil, the most popular commodity around the world.
The combination of the above factors shows that the introduction of commodities is a necessary and revolutionary step in the development of both Tsunami Exchange and the Waves ecosystem in general. By adding this type of commodity we expect to attract new users from other blockchains and increase the applicability of Tsunami within the Waves ecosystem.
Increased applicability - more users - more volume - more staking rewards and earnings for investors. It's as simple as that!
Oracle - where do prices come from?
We have figured out what commodities are and why they are so useful, and the main question remains - where do we get the prices to supply them for trading on the Tsunami Exchange?
Tsunami uses Oracle to accurately track the price of the underlying commodity. Price data for Tsunami's Oracle is collected from over 15 data sources every minute. Sources include banks and financial data providers.
One example of our Oracle is the website of our partners Commodities-API. Pricing data is updated every 5 minutes to correctly calculate fundings.
The addition of commodities is a big step on the way to a mass adoption of the Tsunami Exchange. In addition to oil, we soon plan to add other commodities available for futures trading. Share with us what other commodities you would like to see on the Tsunami Exchange!
To keep up to date, join our Telegram channel.