What is bZx? A 3-minute guide to the defi trading platform

Crypto tokens have long been criticized as only useful for speculation and gambling, but new decentralized finance (DeFi) applications are changing that narrative. One such company trying to change that narrative is bZx.

This article explores how bZx is working alongside other popular DeFi protocols such as Compound and MakerDAO in not only lending, but also integrating tokens into their core functionality. But first, let’s explore how traders borrow money. 

Problem

For crypto traders, access to margin trading–or trading with borrowed money–has mainly been limited to centralized exchanges. By using centralized exchanges, margin traders and the lenders supplying funds to them become vulnerable to hacks, regulatory uncertainty, and mismanagement. Though decentralized exchanges have their own vulnerabilities, having the option to choose is a big step forward for the crypto faithful.

What is bZx?

The bZx protocol is a set of smart contracts built on top of Ethereum. The protocol focuses on lending and margin trading and is most similar to another popular DeFi product called dYdX. The biggest difference between the two margin trading protocols is the inherent use of tokens in the bZx protocol. There are three main tokens in the bZx system: iTokens, pTokens, and BZRX tokens. All three are ERC20 tokens and each plays a vital role in how bZx functions. 

Who Invented bZx?

The co-founders of bZx are Tom Bean and Kyle Kistner who formed the idea for the protocol in August 2017.

A brief history

  • February 2018 – bZx whitepaper is released 
  • December 2018 – bZx raises $7.8 million in their Initial Coin Offering of BZRX tokens
  • June 2019 – Fulcrum, the trading front-end for the bZx protocol, is launched. 
  • October 2019 – Torque, the lending front-end for the bZx protocol, is launched.

What’s so special about it?

The bZx system of lending and borrowing depends on iTokens and pTokens. When users lend or borrow money on bZx, their crypto assets go into or come out…

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