OPNX, a crypto futures exchange, has introduced a credit currency called “oUSD” for margin trading, as announced by co-founder Mark Lamb. The currency is currently in its phase 1 iteration, meaning users can only acquire it by depositing crypto assets into the exchange. In phase 2, OPNX plans to make oUSD available to users who deposit crypto into on-chain contracts to ensure “bankruptcy remoteness.”
According to the oUSD litepaper, the currency addresses three key issues. Firstly, lenders are reluctant to trust platforms to hold cash loans backed by crypto collateral. Secondly, exchanges and lending platforms are cautious about lending cash to margin traders due to past bankruptcies during the 2022 bear market. Thirdly, crypto derivatives traders seek “portfolio margin” to borrow and trade based on their crypto holdings rather than stablecoins.
To tackle these challenges, oUSD serves as a “credit currency.” It can be purchased at a 1-to-1 ratio with Tether (USDT) or used to measure profit and loss when users utilize cryptocurrencies like Bitcoin or Ether as collateral. Users with a negative oUSD balance are subject to an interest rate determined by holders of the platform’s native token, OX. Users with a positive balance can redeem it for USDT.
Lamb mentioned that in the future, users will be able to acquire oUSD by staking cryptocurrency in smart contracts outside the platform, ensuring bankruptcy remoteness and safeguarding against exchange insolvency.
Lamb addressed criticism surrounding OPNX, highlighting that the mistakes made by co-founders Kyle Davies and Su Zhu, who were also co-founders of failed hedge fund Three Arrows Capital, have helped improve the exchange. Despite controversy, Lamb emphasized that OPNX aims to create a safer trading environment for users by enabling provable solvency and custody on-chain, protecting their assets and offering a more secure exchange experience.