What is Mettalex?
Mettalex is a spin-off project of Fetch.ai, founded by its CEO, Humayun Sheikh. With deep knowledge and experience in the commodities trading sector, particularly in the metals market, Humayun identified inefficiencies in the ferrous commodities sector and sought to resolve it with a cost-effective and capital-efficient solution. Mettalex leverages blockchain technology, token economics, industry-grade pricing data, and DeFi liquidity to create a unique solution.
Mettalex's aim is to bring the $20 trillion commodities market on-chain, making it more accessible and offering a hedging tool to small and medium-sized enterprises in the commodities supply chain. The exchange has signed price data licensing agreements with industry leaders such as S&P Global Platts, Javelin Commodities, and Davis Index, providing reliable oracle data for a wide range of traditional commodity markets, including aluminum, Brent crude, cobalt, copper, iron ore, lithium, natural gas, uranium, and more. In addition, Mettalex utilizes Chainlink and DIA feeds for crypto commodity markets.
The DEX lists selected crypto commodities such as Binance Coin (BNB), Bitcoin (BTC), Ethereum (ETH), and others, as well as spreads between traditional and crypto commodities, for example, BTC/GOLD. It was launched in February 2021 on the Ethereum testnet and Binance Smart Chain mainnet, and is currently running on the Binance Smart Chain testnet and mainnet.
Features of Mettalex Unique Markets - Mettalex offers markets that are not available elsewhere in the DeFi/crypto space, thanks to its collaborations with leading index providers.
Autonomous Market Making (AMM) - The DEX's AMMs act as the counterparty to trades, enabling any order to be executed as long as the user is willing to pay the long/short price and fee set by the AMM.
Banded Trading - All trades on Mettalex occur within a price band, which is based on historical price volatility, limiting exposure to price volatility. A market remains active as long as the real-world commodity price does not exceed the cap or fall below the floor.
Unique Derivatives - Unlike traditional futures and options contracts, Mettalex's open long/short positions have no expiration date. A market is settled only if the price band is breached, and users can settle an open market position at any time by selling their long/short tokens back to the AMM.
Asymmetric Opportunities - When the oracle reported price is near one of the price band's ends and/or one side is overbought, taking the opposite position offers an attractive risk/reward ratio.
Limited Risk and No Margin Calls - Due to the banded trading approach, Mettalex users know exactly how much they stand to earn or lose before opening any order, and there are no liquidations due to insufficient account balance.
Capital Efficiency and Leverage - Mettalex is capital-efficient as users only need to provide collateral equal to a fraction of the commodity's market price, which depends on the width of the price band and where the market price lies within that band.
Fully Collateralized Positions - All open positions on Mettalex are fully collateralized with stablecoins, with no over or under-collateralization. Other types of collateral, such as more volatile cryptocurrencies, may be added in the future.
The investment information, comments, and recommendations provided here do not fall under the scope of investment consulting. Therefore, making an investment decision based solely on the information and comments provided here may not yield results that meet your expectations.
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