- 1 What is Mango Markets?
- 2 Highlights of Mango Markets project
- 3 How Mango Markets works
- 4 Information about tokens MNGO
- 5 How to buy MNGO tokens
What is Mango Markets?
Mango Markets is a platform that allows cross-margin trading using up to 5x leverage (decentralized) on Solana’s Blockchain platform. In addition, Mango Markets also integrates with the order book system of Serum DEX.
Mango Markets also allows users to deposit their tokens into the platform to give traders margin loans to trade based on extremely fast transactions and almost zero gas fees of Blockchain Solana. Furthermore, users can deposit SRM tokens into the shared pool to reduce transaction fees.
Highlights of Mango Markets project
The project received a lot of attention
Talking about the highlights of Mango Markets, the first prize of the project at Hackathon Solana X Serum. As the first project on the Solana platform for leveraged/derivative trading, Tweeted many times by Sam – CEO of FTX and Alameda Research on Twitter, Mango Market has huge growth potential.
You can look at the projects that have just launched tokens in the Solana platform, such as RAY (a pioneer in AMM DEX) or OXY (a pioneer in lending), which have x many times the IFO price.
Key factors for success
For a leveraged trading array protocol and perpetual futures, latency and transaction costs are the two most important factors that are always on the table. These two factors have been well addressed by Mango Markets, with a high degree of decentralization – These factors will be analyzed in more detail below.
Mango Markets is built on the Solana platform with a block generation time of nearly one second. Although 1 second is still a large number, so the transaction speed has not been maximized, but in the future, the Solana platform will continue to upgrade and reach the dream number: 400ms per block, from which trading on Mango Markets can achieve extremely low latency.
Why is low latency so important? Imagine, when you trade leverage or smart contract, you pressed the confirmation of the transaction even a minute ago, your position is still not confirmed – Not only brings experience poor users but also makes it impossible to develop highly leveraged tools.
Low latency makes the platform more liquid because the spread is shortened when the transaction processing time is shorter. The issue of latency is even more important because Mango Markets wants to combine with the abundant liquidity of centralized exchanges.
Low transaction fees
To be able to cooperate or compete with decentralized exchanges, the transaction fees of Mango Markets must be extremely low. And the Solana platform is an extremely affordable choice by the Mango Markets team to minimize transaction fees.
If only latency and low transaction costs can be achieved but a decentralized protocol cannot be developed, then in the long run, all of the above will become meaningless. If decentralization is not achieved, the security and composability of the protocol will be severely affected. Those who control the protocol will become the one who decides which tokens or other protocols are allowed to trade and interact with Mango Markets. And this is definitely unacceptable.
How Mango Markets works
The collateral ratio is the value of a user’s deposit and position divided by the value of their loan. For the new user pool, Mango will require an initial collateral rate of 120% and a maintenance collateral rate of 110%. If the user’s collateral ratio falls below 110%, the account will be completely liquidated and the user will lose the entire account. The value of the account will be calculated using a moving average of a centralized exchange price feed, powered by a decentralized Oracle.
The Mango protocol charges 0 on interest, so the protocol has no insurance funds.
This leads to a major potential risk of:
When traders use too much leverage at the time of high market volatility, the collateral ratio falls to less than 110% to maintain the position, even worse case falls to <100 %, your debt is greater than the total account value. Then the user will be “burned” the account and the lender must also bear a part of this risk with the trader.
The higher the leverage a user uses, the higher the interest rate that lenders on the Mango platform will receive.
Lending interest rate is a function of utilization rate (Number of tokens being borrowed divided by the amount deposited into the platform) illustrated as shown below:
As can be seen, interest rates can increase sharply if the rate will be >70%.
Information about tokens MNGO
Token Name: MNGO Token
Token Standard: SPL
Total Supply: 10,000,000,000
Circulating Supply: 1,000,000,000
How to buy MNGO tokens
$MNGO is available on @FTX_Official
Read more : FTX exchange reviews