Bloom is developing a decentralized leveraged trading and market-making platform using Blast's native yield and offering:
- Zero slippage trading (for top 10 cryptocurrencies)
- Increased profitability for liquidity providers due to USDB and leverage
- Leverage up to 50x on crypto assets
- On-chain execution and self-depositing, as well as an optimized CEX-like experience
- Delta-neutral vaults for market making for LPs
Because ETH and USDB (Blast's native stablecoin) are automatically rebased on Blast and smart contracts, Bloom liquidity providers earn a return on rebased USDB as well as a portion of the platform's fees. Similarly, Bloom traders earn the same rebasing yield on their collateral, but additionally receive the best possible liquidation price and loss recapture, made possible by the rebasing yield earned on their bets.
What are perpetual contracts? Perpetual contracts, also called perpetuals, are derivative contracts widely used in cryptocurrencies. Traders can speculate on the future price of the underlying asset without actually owning it. Unlike traditional futures contracts, perpetuals do not have a fixed expiration date, allowing them to be held indefinitely. Traders need to maintain a margin balance in their accounts, serving as collateral for their positions, with no obligation to physically settle at a future fixed date.
These tools are generally considered complex - Bloom makes them simple to understand and powerful to use.
On Bloom, traders can place "bets" (positions) and either bet "up" (long side) or bet "down" (short side). Bloom offers 1-click gas transactions that allow traders to open and close bets.
Due to Blast's native yield, traders can be compensated for their losses with a portion of the LP's leveraged capital return. This leveraged capital, in turn, generates returns spread across the trader's positions, optimizing liquidation prices.
Liquidity providers on Bloom receive 100% of all trading revenues.
The biggest problem in vAMM models that use leverage to trade on DEX is the lack of delta neutrality. Liquidity providers face directional risk from traders' views of the market, which hinders scalable liquidity and trading. Bloom has a dynamic funding rate mechanism that incentivizes market participants to balance open interest on the platform, providing competitive commissions for traders and delta-neutral market-making for LPs.
Anyone can stake USDB in Bloom vault to receive bUSDB and provide Bloom with trading liquidity - in exchange, LPers receive a percentage of the fees generated by market-making in Bloom vaults. These fees are allocated proportionately to bUSDB shares. The vault acts as a counterparty for traders on Bloom - when traders win their bets, their winnings come from the vault. Conversely, when traders lose their bets, their losses are sent to the vault.
Once LPs deposit USDB, they receive back bUSDB, an ERC-4626 token representing their ownership in the vault. This mints an ERC721 NFT that tracks and represents the locked amount in the LP's wallet. ERC721 is a composite. The NFT accumulates real-time trading fees that can be claimed without unlocking the NFT. LPs can also choose to unlock their capital early for a fee.
