The Prices Module Offers User-backed Assets for Trading
Recently, the Komodo team added the Antara Prices Module to the Komodo product offerings.
The Prices Module specifically addresses the need for a blockchain-based leveraged betting service.
The leveraged-betting service is the foundation for having a fiat-paired stable coin on a Smart Chain.
When does a User Use the Prices Module
Assume that a user believes that the value of one currency, such as AAA coin, is going to increase relative to another currency, BBB coin.
The user needs a way to send BBB to a betting "House" and receive in return an asset that is tied "one-to-one" with the value of AAA.
When (and if) the price of AAA increases relative to BBB, the user makes a profit.
Of course, if the price of AAA decreases relative to BBB, the user takes a loss.
A Brief Summary of How the Technology Works
In this technology, the "House," that is, the issuer and manager of the bets, is the Prices Module itself.
In the example above, a user sends their BBB to a BBB address that is controlled by Komodo's Antara Module technology (this part of the technology coordinates with an Antara Gateways Module).
The Prices Module then issues to the user an equivalent amount of a currency that is one-to-one tied to the market value of AAA.
As the prices between AAA and BBB fluctuate, the Prices Module manages the user's account.
If the value of the user's BBB account increases relative to AAA, the user can withdraw more AAA from the Prices Module.
On the other hand, if the value of BBB decreases relative to AAA, the Prices Module allows other users on the network to liquidate the user's BBB holdings. (The user still keeps the AAA coins they withdrew.)
This allows users on a network to work together to maintain one-to-one coin pairings in a leveraged betting environment.
This Technology Allows for Stable Coins in the Komodo Ecosystem
In the example above, the AAA coin could be a USD-equivalent coin, called USDK.
While many users would be betting together to maintain the BBB and USDK coins, from a trading perspective, other users on the network could simply use USDK coins for common economic purposes.
For example, the user that placed BBB coin and received USDK could spend some of these funds to a business that operates on the Smart Chain, and desires to maintain its business using more familiar and stable pricing models.
This creates a currency flow on the Smart Chain, as the USDK is now transferring hands between non-gambling users.
Full Documentation Available Here
For more information, check out the full documentation below.
There are more detailed explanations about Leveraged Trading and the specific technology behind the Prices Module.
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