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Finding the right decentralized finance (DeFi) applications can be challenging, as it is vital to consider not only the finished product, but also the infrastructure on which it was built.

High gas fees and slow transaction processing times have hindered the widespread adoption of many DeFi protocols on larger blockchain networks like Ethereum. To address these issues, the Oxygen DeFi prime brokerage platform was developed.

Oxygen is a lending and exchange platform that stands out from other DeFi projects because it is built on the Solana blockchain. It is supported by experts from Alameda Research and the Serum Ecosystem.

This article provides a comprehensive overview of the Oxygen protocol and its role as a Solana-based prime brokerage protocol.

What is Oxygen?

Oxygen is a decentralized, prime brokerage protocol that runs on the Solana network and is powered by Serum. Its primary use cases include lending, borrowing, token exchanges, and fund transfers.

One of the advantages of Oxygen is its ability to process transactions quickly due to its integration with the Solana blockchain. Solana is capable of settling 50,000 transactions per second at a low cost of $0.0001 in gas fees.

Oxygen utilizes Serum’s DEX and an on-chain order book to provide credit services by matching borrow and lend orders and performing risk management operations. The protocol’s inherent liquidity allows for activities such as derivatives market-making, leveraged trading, and over-the-counter trading.

Users can access the protocol through the Oxygen Wallet, the Solana Network API, and the Solana network smart contracts.

Benefits of Oxygen

Oxygen provides a decentralized prime brokerage that can be easily accessed by users through the Solana network. This decentralized platform ensures that users’ funds are always available to them and not controlled by a single entity, as is often the case with traditional financial brokerages.

Serum, the largest decentralized exchange in the Solana ecosystem, supports the Oxygen platform, making it a powerful tool for trading digital assets. With Oxygen, users have access to a wide range of financial services, including loans, credits, trading, liquidity pools, and yield farming, all on a single platform.

Oxygen has been designed to be both accessible and secure, leveraging the scalability of the Solana network to provide cost-effective performance. This enables users to trade directly with their funds, borrow, and get commercial leverage using a portfolio of assets.

In addition, Oxygen offers an efficient way of managing capital and stands out from other loan protocols in the following ways:

Different use of the same warranty.
Market-based pricing
Cross-collateralization
Trade within the pool
100% decentralized, 100% on-chain, and 100% non-custodial
Support for sophisticated products like synthetic products, tokens, non-linear assets, etc.

Features of Oxygen

Pool

Users can use pools as collateral if they want to borrow or lend digital assets.

Matching Engine

Serum supports the Oxygen protocol’s matching engine. It is fully decentralized and uses an on-chain order book.

Risk Management

The protocol protects users’ assets without putting the platform’s ability to make money for lenders at risk.

Liquidity

The overall state of the market at the time a transaction is called affects the amount of money that can be borrowed or lent, as well as the prices of assets. However, the underlying system is entirely consumer-focused.

How to Get Loans on Oxygen

Users can use their assets as collateral for loans if they have entered them into the protocol. The standard in the DeFi ecosystem is the crypto-collateralized lending system, which ensures that capital is always used efficiently and reduces the risk of liquidation by diversifying the portfolio.

As a result, the user’s indicative loans will be included in a loan order portfolio tailored to their specifications. The formula below is used to determine the maximum amount that can be borrowed:

Total Loan Value = Initial LTV (%) x Value of the set after the loan operation

Note that the initial LTV is the maximum amount of initial debt permitted as a percentage of total assets to assume a new position. The initial LTV is also a weighted average of the individual asset LTVs.

The protocol’s stability depends on a limit on the total amount of loans issued by the rest of the participants. Hence, users can apply for the desired loan and repay it according to the predetermined terms.

Oxygen Token (OXY)

The Oxygen Protocol has designated the OXY token as a utility token on its platform, allowing it to be used as a voting tool in a decentralized governance system. OXY token holders can also benefit from discounted fees for protocol operations.

However, the creators of the project have forewarned that as the protocol evolves, additional service fees may be introduced, which will also contribute to the acquisition and use of OXY.

The governance system of the Oxygen Protocol is not as straightforward as it may appear. Token holders will use their tokens to vote on all legally binding governance decisions, such as modifications to risk management, data sources, and settlement, changes to Oxygen protocol rates, and the types of assets that can be lent or borrowed on the platform.

Users holding at least $1,000 in OXY tokens (and who have locked their tokens) are eligible to propose upgrades, but must also follow the community’s guidelines. The locked OXY tokens will be returned to the user after the proposal has been reviewed and put to a vote.

The following proposals are some examples of government actions:

Modification of risk management, data sources, and settlement.
Rates of the Oxygen protocol.
Assets that can be lent or borrowed on the platform.

How to Buy OXY

OXY, while listed on several cryptocurrency exchanges, cannot be directly purchased with fiat currencies like USD, EUR, or GBP. However, you can still acquire OXY by first purchasing USDT, Bitcoin, or Ethereum on a reputable exchange and then transferring those funds to an exchange that supports OXY trading. Once there, you can exchange your USDT, Bitcoin, or Ethereum for OXY.

Step 1: Buy one of the major cryptos, i.e., BTC, ETH, USDT, and LTC

We will be using Binance as the exchange for this illustration due to its reputation as one of the largest and most well-known crypto exchanges that accepts fiat currency deposits.

Binance, originally from China, has gained widespread popularity for its user-friendly exchange services and has been a leading player in the cryptocurrency market since its rise in 2017.

To begin using Binance, users must first complete the KYC process and then have the option to choose from various payment methods, including credit/debit card or bank transfer, to purchase any of the major cryptocurrencies listed earlier.

Step 2: Transfer the cryptocurrency to an altcoin exchange

To trade OXY, an altcoin, users can transfer their coins to an exchange platform where it is available for trading. Once the cryptocurrency has been transferred to the chosen exchange, users can fund their account with BTC, ETH, or USDT (depending on the desired currency pairs) through Binance. Once the deposit has been verified, users can then proceed to purchase OXY on the exchange.

In Conclusion

While DeFi has brought about some innovative advancements in financial service delivery, there are still many challenges to be addressed. The majority of DeFi projects are built on the Ethereum blockchain, which is currently facing issues with limited functionality due to network capacity constraints. This has resulted in high gas fees and slow transaction speeds, which can hinder the widespread adoption of DeFi.
To address these issues, the Oxygen protocol has been developed as a composable solution that allows for easy borrowing and lending of cryptocurrencies without incurring high fees.
The open-source nature of the protocol also allows for further development and innovation. By addressing the current limitations of the Ethereum network, the Oxygen protocol aims to pave the way for more widespread adoption of DeFi.

Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.

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