AMA Recap | Junkie x Leverj

Xiaoqing Liu
LEVERJ
Published in
19 min readFeb 23, 2021

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On Monday 22nd, Leverj had an engaging and informative AMA with Junkie on his Discord channel that covered topics like the roadmap, liquidity rewards program, referral program, staking, Gluon technology, partners, L2 token… Basically all you want to know about Leverj!

Read the transcript below if you missed the great AMA between Junkie & Shanky! It’s a bit long but I’m sure you wouldn’t want to miss a word.

Opening:

Junkie: Welcome to THE JUNKIE AMA. You all probably know him already but for those who don’t, we got Shanky here from the Leverj team!

Shanky: Hello! Thanks Junkie for having us on your AMA.

Junkie: All good. GREAT. LETS get stuck in!

Q&A:

Q1

Junkie: Big question for a lot of the ICO holders but the new followers probably want to know too… You have been working on this for 3 or 4 years now right? What have the key areas for development been focused on? Why has it taken so long?

Shanky: Leverj’s mission is simple. Build a fully decentralized financial markets infrastructure and give power and control to the people. The story and realization of this mission began with an attempt to build such a system on Bitcoin back in 2015. That was an excellent early attempt but was limited by the Bitcoin infrastructure’s lack of support for a fully programmable blockchain.

With the emergence of Ethereum, its smart contract support, and innovation centric ethos Leverj started its journey of building a high speed derivatives DEX. One that feels like CEX but where the control and custody is in the hands of the people.

Ethereum has its limitations. Scaling, high gas fees, and higher latency are areas where it needs improvements to build meaningful decentralized markets.

Over the last couple of years, Leverj has built the only scalable layer 2 solution on Ethereum that is suitable for trading, for becoming the rails on which the future of decentralized finance can run. It’s a non trivial engineering challenge and it has rightfully taken a bit to get to where it is today. We launched high speed spot trading on L2 back in 2019 and opened up the futures DEX in August of 2020. Now we are getting ready to change the landscape!

Q2

Junkie: Nice. I like the fact that you are not just some new start up hoping to live up to your promises, you actually have a real working product unlike much of the competition it seems. Hopefully you can capitalise on your first mover advantage.

Okay so Leverj is a DEX, so like Uniswap, but with limit orders, sell orders, and stop loss? A DEX with these features is every degen’s dream right?

Shanky: Firstly, let me mention that yes we are hoping to move forward fast and build on our first mover advantage. We are very grateful and love the support of our community.

Now to your question of us being like Uniswap. I would say think of us as a decentralized FTX, BitMEX, or Binance Futures.

DeFi and crypto markets have matured beyond swaps and spot trading. The world of crypto derivatives, lending, and DeFi is evolving rapidly. The market demand for perpetual futures and leveraged trading experiences is robust and that is where we come in.

In addition, we are also aware that the CEX market is undergoing fundamental change and this is affecting users. We think that the combination of a non-custodial DEX, with all the features of the Futures exchanges you are used to, plus full transparency is a winner.

Q3

Junkie: I’ve seen a few projects try and create this on the Uniswap platform (not derivatives but just the CEX features like limit order etc.), and sadly they failed to make it work properly. So very exciting that we now got a project with the tech to do this. And will be interesting to see if any of the other projects attempting to do a similar thing will actually be able to achieve what they are attempting once they launch their platforms.

Are there plans to add lots more pairs and what timescale?

Shanky: Yes actually, adding instruments to the futures market is our key focus. In the next few days we will be launching a DeFi Index perpetual, and have others planned. Lots coming… If you or your community want a say on that, then please let us know. We are all ears!

Q4

Junkie: This community is never short of opinions, I’m sure they will have lots to say. Saw the article about DeFi Index perps the other day. Definitely exciting.

On the subject of adding pairs……Is it possible to add micro caps? Like newly launched tokens and rival Uniswap in this sense? What would need to be done in order for this to happen?

Shanky: Adding ERC 20 tokens is a pretty simple exercise. A trivial one. However the bigger issues are always around how to maintain liquidity, market making, and coin awareness. We will support anything that has demand and fair markets can be created around it. At the same time, we wouldn’t want to see any of our traders get burnt.

Q5

Junkie: WEW so this can be done? You heard it here first guys… LEVERJ IS THE NEW UNISWAP… DEGENS ENTER!

Well with gas fees on ETH right now this would attract A LOT of new users. Good to know it can be done, hopefully this is something you guys look into doing….wew lad degens would be flocking to Leverj.

You have the first working derivatives DEX with 100x ….YES 100x for full degen mode! And a working visual orderbook. Gives the same experience as using a Centralised exchange. Why is this experience/feel of a CEX so important?

Shanky: Good user experience is key to the success of a platform. When we say user experience we mean not just the UI and how you interact with it but also how the system behaves and responds.

Perpetuals with leverage at 100% is only possible in a high speed exchange. Try that high a level of leverage on an L1 DEX and you will soon find out that it’s not viable. Traders need the ability to enter and exit positions at a fast pace and with low cost for anything to be viable at a higher leverage like 100x.

Without the support for advanced order types, say reducing only orders and for ability to quickly take profits and set stop losses, trading at high leverage is losing game.

The system needs to manage risk and liquidate risky positions rapidly and in a fair and transparent way.

Building this in a DEX has been a very difficult problem, which is why you don’t have other derivatives DEX like Leverj. On L1 you could end up paying more gas fees than the profits from an excellent high leveraged trade at this point. I am sure I don’t have to convince anyone about this.

Q6

Junkie: Tell me about it, fees right now are killing us all.

I’ve seen Leverj in action and I know your product works. The speed issue and difficulty in making this tech work makes me very sceptical about other projects claiming to do the same thing. Many of them have not released yet so easy to make promises and claims. We will see if their platforms are both usable and scalable in future.

Also, to the point about why the experience of using a CEX is important, I’ve talked about this many times in relation to why DEXs aren’t catching on yet. In my opinion, with all the benefits of using a DEX, and all the security drawbacks of using a CEX, if people liked the way DEXs feel to use right now they would be using them over centralised exchanges already.

So the usability/interface/features/experience is clearly the key element to the masses making the transition. And Leverj with its order books, speed, limit orders, Stop loss, Leverage, layout etc is the only platform that has given this same user experience and can replicate this. It is the only platform that I have seen that can accommodate for the masses and has a good chance of bringing them over to the decentralised trading world. This is one of the main reasons why I have been so bullish on it lately, it really can be a big part in this decentralised revolution.

So it’s got FREE trading, ZERO fees on spot right? This is game changing. How can this be yet Uniswap gas fees have been crazy lately?

Shanky: Totally agree on promises vs reality.

As a team we have taken the approach that “actions speak louder than words”. We are here to build a great product, something that works for our users.

On the question of spot fees, Yes this is 100% true for spot, no fees.

The key difference again is that we are built on top of the Gluon layer 2 platform meaning we aren’t subject to ETH gas for every transaction. Uniswap, as a Layer 1 solution is fully exposed to it. I would say in a perverse way it is driving the most volume and cost in gas across the entire Ethereum network.

Q7

Junkie: LOL the degens all spending $100 dollar on a transaction yet they could have popped over to Leverj and done it for free. Okay so not all the degen ERC20 plays are there yet… but I really hope this is something you guys can release soon because this is what the people want… Put a thumb up below if you want ERC20 degen plays added.

Is it possible to build a seperate DEX just for microcaps/launches like Uniswap but on Gluon? You can see the demand for it.

Shanky: Yes, building an Automated market Maker (AMM) like Uniswap on Gluon is technically and conceptually feasible. We have had some early stage design discussions and conversations around this.

As you say Junkie, that would be an amazing product in the market and should be possible on the next versions of Gluon. However, sticking to our principle we will announce more details once we have made some tangible progress.

Q8

Junkie: Wow this is the dream. Please make it happen guys. Degen on Gluon with no fees….. this is big. Any rough timescale when the next version of Gluon will be ready? I’ve been looking forward to this because I know it will streamline a lot of things on Leverj.

Shanky: We are working diligently as we speak. We will continue to release incremental improvements and you will surely hear from us after each big breakthrough. Lots of good stuff cooking. Build up an appetite for a big meal. That’s all I can say for now.

Q9

Junkie: Good because Junkie has a very big appetite!

Okay so now onto the new releases on Leverj itself… Your staking program is now live. Explain how this works and what this means for token holders?

Shanky: Yeah correct. Currently $L2 token holders are able to stake their bags and get paid a portion of the fees (Leverj charges fees on the Futures trades).

That also means the more trades on Leverj Futures, more the fees and more for the stakers. This is the cleanest tokenomics for both incentive alignment and transparency, no hidden supply inflation or burning.

TLDR — staking periods are about every 30 days (it’s based on ETH blocks so it can vary).Your payout is calculated based on how much $L2 you stake relative to the total $L2 in the staking contract in a given period.

More details: https://blog.leverj.io/l2-staking-is-now-available-on-leverj-eb99334d6074

Q8

Junkie: Imagine Leverj got even 10% of Bitmex users… Token holders would be greatly rewarded? So the more LTWO($L2) holding, the better.

This area interests me a lot. Holding tokens making good passive income and this is what DeFi is all about. We know traders keep trading in good and bad market conditions, could even argue more trading goes on in a bear market and less hodling, so even in a bear market $L2 will keep earning rewards.

You have just released referral rewards? Tell us more details about this?

Shanky: Yes we have, in fact Junkie is the first super affiliate so jump on his link! Junkie, share your link and then I will add some more color to this question.

The way it works is you need to register your ETH address. This does take GAS. Then you can create your own referral link using our tool and then you will get 20% of the fees paid to you for 6 months. These will be paid in $L2 token. These will be paid in $L2 token.

Go degen! More details — https://leverj.io/referral.html

Q9

Junkie: Great, I will post the link on the “crypto-tax-software” channel below.

So chances are influencers will now have incentive to talk about Leverj / LTWO and word of mouth could mean this grows quickly from here. Exciting times.

And also a liquidity rewards program is being launched in future. What is this and how will this increase liquidity/volume on the exchange?

Shanky: Actually Liquidity rewards just went live!! Very exciting. Essentially this is constructed so that if you are a Maker in the order book, you will get rewarded. By doing this our view is that liquidity on the Futures markets will increase. More details: https://leverj.io/liquidity-rewards.html

Q10

Junkie: I know volume/liquidity was an issue in early days on Leverj but massively improved now and this should improve it even more going forward. Anything that helps get volume and those DEGEN LOW CAPS available is great!

Services are not currently offered to US/UK I know, and although being decentralised there is no KYC, its encouraged for users to abide by their countries regulations, but have you got plans to let USA and UK users in eventually? Any timescale for this?

Shanky: Yes that is correct, while we are a DEX, we are abiding by the regulations.

In terms of opening up to those markets, we certainly have discussed this and it’s great to see that some other Crypto companies have been successful in getting approval in the US.

We know that this process can take months to years so it’s incredibly difficult to give you a timeline and let’s be honest that practically all of this decision making sits outside our control.

Q11

Junkie: Great. I know you are pushing to the asian market currently, which is huge, but this thing can explode once the US can use it so good to see this will be a likely option in future.

How about staking? Can anyone still stake from the USA and UK and earn rewards?

Shanky: Staking occurs on the Ethereum network, which does not enforce any geofencing.

Q12

Junkie: Okay next…the tech. Junkie is no Dev, so bare with me… Many of the competitions are using ZK rollups and Optimistic rollups over Gluon plasma. Why did you decide to create your own tech form the ground up? And do you see any issues with ZK or Optimistic rollups in future with scaling or usability?

Shanky: Many may not know but we were one of the teams pioneering the rollups approach in 2018.

What you see being branded as Optimistic rollups emerged in the Plasma and scaling conversations on ETH Research.

At the time there were extremely complicated exit game mechanics in Plasma,which meant you could withdraw after days if there was conflict. That made no sense for a financial market and real-time infrastructure.That is what led us to build Gluon, which brings the best of rollups, plasma, and account based constructs.

ZK Rollups is a very interesting technology. Its goal and genesis is in the area of privacy. That’s why Zero Knowledge. However, people want a solution that stays true to the goals of a DEX which must be both Decentralised and Transparent. If you need advanced math to understand what’s happening then you are talking about.

  • a system for a few select elites
  • expecting the masses to trust a few individuals over understanding yourself

If you need to trust someone else then why bother with decentralisation? Just use a CEX. We joke internally that Gluon is Full Knowledge Rollups (FK Rollups).

Q13

Junkie: I’m sure this is Bharath’s favourite joke.

I know a certain competitor, who is currently in testnet and creating LOTS of hype right now, is using both ‘Cosmos Peggy’ for its L1-L2 bridge, and also using Ethermint tech to run its platform on. I have read that there are security issues with peggy cosmos, and Ethermint isn’t designed for production use with it having not been tested in Alpha-mode either, so could have issues actually working in a live mainnet trying to scale. Do you see security, scaling or any other issues potentially cropping up using these protocols?

Shanky: Remember you spoke about promise vs reality! That’s at play here.

I should probably start with the fact that not all our competitors have set out to achieve the same thing that we have. Some have simplified their product offerings or are designing for a “faster” solution, not “The Fastest”.

Using other combinations of L1-L2 can get you part of the way there, but building the whole system on principles like Instant Finality and high frequency trading is what will set the Leverj product apart from the rest.

Assessing the current landscape of decentralised derivatives exchanges in development, it is fair to say that Leverj seems to be the only one that can take the place of a Bitmex, FTX, Binance Futures, or Deribit.

Q14

Junkie: I’ve said this a lot, there is a huge difference between talking about what your product wants to do…..and actually doing it. In my opinion it’s not long until Leverj sees a similar amount of hype and recognition to its competition. It’s no secret, I personally see Leverj as a dark horse in the Layer 2 DEX Wars but we will see.

In your opinion is your tech superior to the competition? How does Gluon solve these issues?

Shanky: A technology is superior and good if it solves a problem. Is practical and keeps its promise. We did investigate all the options and arrived where we did. As we said before, Gluon is a combination of Plasma and rollups.

It provides account based reconciliation, it gives the benefits of rollups, it allows for decentralisation and you don’t have the drawbacks associated with ZK. Innovation is an ongoing process and we are and will continuously keep evolving Gluon.

Q15

Junkie: That’s about as far as Junkie’s DEV brain goes….. I’m in it ‘for the tech’ obviously and Leverj’s tech looks good.

SO……You have two HUGE market makers in both MAKER $DAI and Coinshares, already backing you right? They obviously see the potential in Leverj, how come they came on board?

Shanky: Wow, great question. There’s a few reasons they became levolutionairies!

  • 1) they share our vision of decentralised exchanges being the future
  • 2) when we showed them our tech and how it worked they were hooked
  • 3) they also saw the opportunity to be involved with us at a very early stage, in fact some of them have been with us since the very beginning and
  • 4) as volumes increase it can even help them to hedge positions without custodial risks

Q16

Junkie: DAI being your market maker is big. Coinshares too Wew. Well they clearly see BIG potential in Leverj. With Maker, our ethos and goals of decentralization aligns well too.

And personally I’d like to throw my own one in there… #Levitators

We’ve established your tech is groundbreaking… You have the first mover advantage right now in the Derivative DEX market and arguably the best working product… How do you plan to capitalise on that? There are a lot of frustrations in the community about growth of the project (price wise mainly but am aware that is not under your control)

Shanky: Before I answer this question, I must say I like #Levitators. #Levitators — rise and float with ease to the future!

Now to your question. We do think we are a bit different from other projects which have sold the sizzle but not really launched a scalable product on mainnet. Too many people were burnt by projects with that attitude after the ICO bubble, so it’s incredibly important to us to deliver on our promises.

Our future plans are split between Leverj the exchange and Gluon the network. Leverj is being incrementally improved now that it’s been in market for some time — this includes things like the UX, more pairs and Perps, plus staking on Layer2 and a lot more.

Gluon’s plans are wider adoption. This in turn drives benefits back to the $L2 community as Gluon use will pay rewards back to stakers.

Q17

Junkie: I agree with you completely, that when the real catalysts come to move people onto DEXs it will be the working products that win the race, so although it feels like Leverj are behind in the DEX wars currently, we will see for sure when it comes to talking the talk. I look forward to seeing this grow….. and hopefully someone harpoons that fucking whale.

Lets move on to Gluon Layer2 sidechain. Why are Layer 2 sidechain protocols about to explode in publicity and why will many projects be looking to implement and work with Layer 2 solutions in the very near future?

Shanky: It’s been clear since 2017 that as more and more people pile into Ethereum the mainnet will become congested. No secret here for sure! Initially, projects tried to compete with Ethereum by trying to build a faster Layer1, but it doesn’t make sense to compromise security in order to make the whole network faster.

That’s where Layer2 fits in, scaling a non-custodial DEX to 1,000 TPS is relatively easier than scaling the whole network to 100,000 TPS. So every DeFi project is looking at the Layer2 space to see how they can bring significant gas savings to their users. Even ETH2 won’t be the holy grail as there will be parts of the network that get congested. So, every project should have adopted a Layer2 on their roadmap.

Q18

Junkie: Agree, so Leverj/Gluon NEED to jump on this opportunity now then and make its name. Some big announcements working with good projects would transform the sentiment around $L2. So what makes Gluon ($L2) one of the best layer 2 solutions?

Shanky: Gluon is the only Full Knowledge Layer2 allowing you to see every balance, every trade, every deposit or withdrawal.

Check out gluon.leverj.io. This is thanks to the account based structure using your same Ethereum account on Gluon. And, you know what, that actually makes it easier for other projects to integrate. What’s good for users is also good for developers and DeFi as a whole.

Last but not the least, it’s the only damn layer 2 solution that is actually running in production smoothly!

Q19

Junkie: No one seems to realise most of what you hear about layer 2 right now is just talk.

I think quite a few people in the community, and certainly where I feel is an area that isn’t being explained/pushed/advertised enough by you guys is that GLUON has its own potential away from Leverj and that $L2 is the token for BOTH. What is the plan for Gluon/$L2 as a project independent from Leverj? Do you plan to work with many other projects?

Shanky: Absolutely! Gluon as a technology and platform has its own massive potential. Yes, we have had early discussions with a few parties about just this and we will continue to do so. Gluon benefits from $L2 as a governance token, and there is a decent pot allocated for developer grants and ecosystem investments to really accelerate from there.

Q20

Junkie: Are you actively talking to any projects about working with them and about implementing Gluon? I hear you are in talks with a tier 1 exchange like Coinbase or someone to implement Gluon into their system? Or is that just rumour?

Shanky: No comments.

On a more serious note, we have had discussions with several parties about them adopting Gluon for gas-less deposits/withdrawals or transfers between exchanges. As we said, this is squarely in our goals for the network and will also benefit the Leverj community.

We will announce once things firm up and we have made progress. Things in the world of crypto are dynamic.Until then we will leave it for everyone here to speculate on what may be possible and what may come through.

Q21

Junkie: Nice. So the $L2 token is both the Leverj DEX and the Gluon sidechain token. How does Gluon working with other projects add demand/value to the $LTWO token itself?

Shanky: Great question! Yes we think so. $LTWO is the governance token for both Gluon and Leverj, so if we are successful as either an exchange or platform provider, the rewards accrue to the token holders who benefit from Staking reward payouts.

The more the payout the more attractive $LTWO becomes. So we think the Tokenomics create a great incentive loop.

Q22

Junkie: Exciting stuff for $L2 holders. Being the only real Layer 2 candidate right now I’m sure we will see Gluon implemented with some exciting projects going forward.

THE BIG QUESTION… Any plans to try and get onto CB/Binance or any tier 1 exchanges eg Kucoin?

Shanky: Totally, we’re having discussions with several different exchanges at the moment. You will hear as soon as one of them materializes.

Q23

Junkie: Amazing. We need this bad. Obviously the exposure that a big CEX listing will bring will be a game changer, then you have the liquidity/volume on top.

Okay future plans… Any plans to have another trading competition? The last one attracted A LOT of new traders.

Shanky: I think you are reading our minds Junkie! Totally, The last competition was a great success and we achieved some great cut through, awareness and join ups. So in a Junkie EXCLUSIVE, we can confirm that the next competition starts in a few days. Shhh, don’t tell anyone yet.

We learnt a bit in the last one, so this one will be bigger and better.

There will be 3 prize pools:

  • 1) The top PnL over 6 weeks — for larger traders
  • 2) the top ROI over 6 weeks — for smaller traders
  • 3)the best ratio of winning trades (with a minimum number of trades per week) for those who have automated strategies.

Should be cool and we think traders will like this.

Q24

Junkie: Heard it here first guys! Volume over that last competition period was really good and Leverj has come a long way since then even, so it would be good to get people to come and test it out and sure this one will be very busy. Which means VERY good for us $L2 stakers gaining all those fees in this period.

Are you currently running any promotions or Giveaways?

Shanky: Promotions and more promotions! Right now we have 4 big initiatives going on.

This AMA with Junkie, the launch of Liquidity rewards, the launch of the Referral links and finally the trading competition… I think you’d agree that’s some mad promotion. Won’t you folks agree?

Also, it would be great to be on top of the L2 DEX Wars this time!

Q25

Junkie: Let’s be honest…you made it onto THE JUNKIE AMA… doesn’t get much bigger than that. But yes, lots of news out on Leverj lately and many of them big incentives for users of the platform and holders of the $L2 token. So excited to see how this plays out going forward. Let’s hope the market in general stays positive… Today was not the nicest of days.

AND FINALLY… Roadmap for 2021- What exciting things should we expect?

Shanky: In this bull market — more pairs, more perps, more partnerships, more listings. More everything…

We’re also working on Staking natively on Gluon and trying to secure some exciting partnerships. Most of all we should expect that some big supporters get handsomely rewarded for their efforts in bringing traders to Lever. Who’s in?

Ending

Junkie: Amazing. Well Junkie is fucking hungry and we have kept you here for over 2 hours. It’s been very informative and we learnt a lot. Very good to have this chat Shanky and thank you for coming over to our community. Appreciate all the hard work you guys are doing… Keep it up!

For now Levitators… FLY

Shanky: Thanks Junkie for organizing this AMA. Thanks to everyone who participated.

Junkie: DON’T FORGET TO JOIN LEVERJ’S TELEGRAM TO KEEP UP WITH THIS EXCITING PROJECT: https://t.me/leverj. WINNERS of the Giveaway will be announced tomorrow.

Thanks again to Junkie for having us on this AMA. It was a great pleasure to share with the community. If you have any other questions about Leverj, don’t hesitate to join our Telegram and shoot a message there!

Please keep in mind

US Persons are not allowed to trade on Leverj. Users from sanctioned country or Specially Designated National (SDN) as per OFAC are also not allowed to use the system.

Before you trade, please make sure you are legally permitted to trade cryptocurrencies, derivatives, and any other instruments offered on this platform from your home jurisdiction.

Nothing in this article constitutes an offer, solicitation, or investment advise. The content is for educational purposes only. Images and screenshots may be from our test environments and do not represent data on the live system.

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