By
Mayowa Adebajo
March 12th, 2024
The founders of a well-known cryptocurrency trading service Changelly are ready to present Oxygen, the first blockchain-based repo trading platform.
From the founders of popular instant cryptocurrency exchange Changelly comes Oxygen, the first decentralized repurchasing agreement (repo) trading platform built for the cryptocurrency economy.
Taking on one of the oldest niche sectors within traditional asset classes, Oxygen looks forward to bringing blockchain innovation to the repo trade, allowing crypto asset holders access an additional source of revenue, creating liquidity and embark on investment paths from a collective range of digital assets, tokens and coins.
Oxygen aims to direct its services towards crypto asset holders and their unique sets of needs and requirements. There can be distinguished several groups among these asset holders.
The first one includes strategic long-term investors, such as miners, who will be able to put up their held assets as collateral, freeing up capital and earning passive income.
Another group consists of shorter-to-medium-term speculators and traders, who can leverage the persistent volatility of crypto prices to take advantage of arbitrage avenues.
Early backers and contributors of crowdsale projects with access to significant yet idle assets, who can loan them out against collateral to generate income, are the next group of interested parties.
One more group includes businesses powered by token economies looking for liquidity and management tools, who can then deploy surpluses or plug gaps.
And, finally, digital asset investment funds, who can lend out assets in their portfolio to gain interest income without sacrificing exposure, and exchange platforms seeking wider trading opportunities for customers.
The repo concept is simple: it is an agreement that specifies the selling of securities with a fixed maturity date for repurchasing on a predetermined price. As a financial tool, repos represent a way to fund buying positions through asset borrowing to cover sells, reusage of collateral, safer cash investments through collateral backing and more efficient management of portfolios.
Oxygen envisions a CryptoRepo transaction, whereby one party borrows crypto assets from another, committing to return these together with interest on a future date, while putting up their own crypto assets to the lender as collateral.
Utilising Ethereum smart contracts, Oxygen ensures that all transactions are secured over a decentralized exchange, eliminating the need for intermediaries and preventing the amendment of conditions without both parties signing off.
Oxygen smart contracts will be defined by the GMRA legal framework, trusted and recognized by the $12 trillion international repo market. Only client-side applications will hold user private keys, meaning that the Oxygen platform can never access user assets.
With smart contracts being the sole determinant in clearance and settlement of every transaction, they record transactions on the Ethereum network as soon as a repo trade has been matched on the Oxygen platform.
Here onwards, users interact with the smart contracts directly via its fixed Ethereum address. Loan assets and collateral are transferred to the address where they are locked. The smart contract then deploys the loan asset to the Borrower’s Ethereum address, keeping track of all transactions.
All users will be able to access Oxygen’s turnkey offering of peer-to-peer functionality, including an AI-enhanced risk management toolkit, community-driven order book, an order processing engine and a ratings system fed by users’ repayment history. Advanced users can integrate these for B2B needs via an API.
All client-side applications feature a set of online interfaces that fully support major extensions such as Parity UI, Metamask and MyEtherWallet.
Oxygen benefits from the know-how of Changelly’s strong experience in providing exchange services to more than 1.6 million users, who also provide an immediate userbase for Oxygen. Through the leadership of financial markets veteran CEO Alex Grebnev, with high-level associations, including roles at Goldman Sachs, Merrill Lynch and Bank of America, Oxygen hopes to integrate into financial markets to achieve acceptance among potential B2B repo users.
With a platform supporting Ether and all ERC20-compliant tokens representing more than $120 billion in market capitalization, Oxygen looks to serve both B2B and B2C markets. With cross-chain solutions on the horizon, the integration of other blockchain-based cryptocurrencies such as Bitcoin and Litecoin will be possible.
The Oxygen decentralized repo market will be powered by a multi-purpose OXG utility token to settle commission fees as well as act as a tradeable asset within the platform. Oxygen is currently under application for regulation under Gibraltar’s new Distributed Ledger Technology laws and as an Alternative Trading System (ATS) in the US.