Prime Brokerages and DeFi — Part 3

Our Case for Oxygen

Our series has covered the various offerings of prime brokerages and DeFi’s role in making these services accessible to everyday citizens.

We’ve proposed Oxygen as a champion for this cause, and many of our readers have given positive feedback. The ball is back in our court. What puts Oxygen at the forefront of the DeFi prime brokerage movement? Can we make a case for Oxygen’s effectiveness, seamlessness, and stickiness as a Decentralized App? What is our end goal?

Propelling DeFi to its Robinhood Moment

We’ve made bold claims about DeFi’s potential. Yet even with a blockchain like Solana to finally support massive decentralized transaction systems, DeFi remains a niche market: compare DeFi’s 1 million users with Robinhood’s 13 million. It’s an uphill battle.

We see DeFi as the underdog disruptor of global financial accessibility, and not purely out of sentiment. A brief look at history reveals a number of world-changing innovations which the public initially decried as impractical hype — and rightly so. These innovations would not catch on, let alone transform the world, until improvements in costs, ease of use, and seamless integration into our daily habits made them essential.

Consider the bicycle. The original bicycle’s cartoonish penny-farthing wheels, bone-shaking instability, and difficulty in mounting made them more of a trendy fad than a realistic option for commute.

The introduction of normalized wheels for stability, a remodelled frame for easier mounting, and a cheaper price tag — all in the backdrop of rapidly improving pavement infrastructure — made bicycles all the rage starting the late 19th century and transformed the modern city design.

Hindsight makes it easy to overlook the bicycle’s winning features: that it was inexpensive, easy to learn, and immediately usable in one’s own environment.

Fast-forward to the 21st century. Just a couple of decades before Y2K, commentators were predicting the death of the laptop — a niche, burdensome, and overly costly method of mobile computing.

You can guess how the story goes. Continuous improvements in affordability, slimmer form factor, and the advent of WiFi made laptops crucial for everyday life. Wireless internet connectivity spurred demand for mobile laptop designs commensurate with everyday habits. Nowadays, it’s impossible to imagine a world without cheap notebooks, simple OS interfaces, and a universe of applications to solve everyday problems.

We believe that Oxygen represents a similar paradigm shift for DeFi. Oxygen is already a cheap and scalable prime brokerage alternative. Equally important are Oxygen’s intuitive UI and composability with current and upcoming platforms.

Ease of use has been our priority since day one. Oxygen is open source, meaning anyone can use Oxygen as is and integrate it into their products or create their own UI/APIs. We have built a native, intuitive UI and supporting documentation to allow others to visualize and build on Oxygen. We also launched our alpha UI in early December, wherein users can create and invest via their own pools, and we are onboarding constructive feedback on design. Users can also connect to Oxygen protocol via API and Smart Contracts on the Solana network, meaning users can choose from a multitude of visual platforms to tap into Oxygen’s power.

Graphical intuitiveness is only part of the picture. If Oxygen and the DeFi ecosystem are to blend into our lives, they must also meet the whole range of our financial service needs. Unique synergies emerge from Oxygen’s interaction with ecosystem players like Serum and Solana, making essential and powerful tools, previously inaccessible to the DeFi market, now possible.

Oxygen: Version 1

Oxygen Protocol’s first phase captures the fundamental prime brokerage service set: borrowing, leveraged trading, and yield generation.

As you know, Oxygen’s private pools will give users the flexibility to borrow and lend against a portfolio of assets, all composing directly with the Serum ecosystem thanks to DeFi’s permissionless. Oxygen will give rise to the following use cases:

Yield generation. Users can deposit their funds and lend them out according to a number of parameters the user can choose from, including maturity and desired yield (based on a choice of market rate or limit order). Assets lent are guaranteed by the borrowers pool, allowing users to maintain borrowing power for more capital efficiency.

Borrowing. Users can borrow assets against the weighted average LTV ratio of their portfolio. LP tokens can be used as collateral to borrow assets, whether you are borrowing for liquidity or going short. Cross-collateralization allows users to better manage their liquidation risk by pooling multiple types of collateral with varying LTV’s.

Trading. Users can trade directly out of the pool, allowing for collective action and efficient capital usage.

Readers will naturally ask where our initial liquidity originates from. We set in place a number of liquidity initiatives to accompany Oxygen’s scaling, including sourcing from the Serum DEX and another popular upcoming protocol, More specifically, the alpha version of Oxygen relies on the Serum DEX prices for order execution, market data, pricing, and risk management. We also note that any ERC-20 can be wrapped as an SPL token and can be supported on Serum DEX and Oxygen.

Following the prime brokerage phase of Oxygen, we plan to create volatility trading protocols and structured product constructors and enable users to create their own structured products for themselves or their clients. The possibilities are endless, and will depend on how things proceed from here.

Oxygen’s Ultimate Vision

We’ve hopefully made a case for how Oxygen will recreate marketplace-type business units traditionally found in investment banks and why Oxygen (D)App will prove popular.

Our ultimate vision for Oxygen is a widely adopted, completely on-chain, peer to peer prime brokerage protocol powering a sophisticated ecosystem of financial services which previously were inaccessible to a majority of the world.

Fulfilling users’ essential borrow-lending and trading needs and granting multiple forms of intuitive access, directly and through other ecosystem services, is just a first step. As Oxygen leverages the Serum DEX and its vibrant ecosystem, we expect other projects interested in integrating or expanding Oxygen’s functionality to take advantage of DeFi’s composability and build with us.

As we continue to build out today’s financial primitives, we welcome you to participate and help flesh out tomorrow’s ecosystem of interoperable financial services. Oxygen is an essential cornerstone on which our ecosystem players can build much bigger projects on Serum and Solana without reinventing the prime brokerage wheel.

There’s much to explore.

Go back to Part 2

Go back to Part 1




DeFi Prime Brokerage Protocol and cross chain decentralized wallet built to scale.

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