“The shortest way to describe Primex Finance is that it is a leverage trading and leverage farming platform that has capabilities similar to CEXs, but in a fully decentralized manner,“ described the project VP of Growth Dmitry Tolok. He and his co-founder Vlad Kostanda discussed the features and future developments of the Primex Finance project during the recent Cointelegraph X Spaces.
Connecting traders and lenders
A non-custodial prime brokerage protocol, Primex Finance was created by a team of professionals who previously worked with Polkadot, Cosmos, and various DeFi protocols. Originally based in Ukraine, it attracted the attention of foreign investors such as Stratos and CoinFund before building a local community. The platform now boasts an international user base of one million.
Currently deployed on Polygon, Arbitrum and Ethereum, the team has plans to expand to other chains, such as Base and BNB Chain, to provide users with diverse leverage farming opportunities, as user demand plays a significant role in Primex Finance’s decisions.
“There are also some chain assets that people specifically want to enter,“ Kostanda said, “such as Avalanche and its LST protocols.“ Tolok added: “Purely from a technology perspective, I expect a lot of innovation from next-generation EVM-compatible chains like Monad. They will make transactions much faster and cheaper for the user, which is really important for the trading use case.“
Primex Finance is working on providing users with different investment strategies. Tolok clarified this point: “If we just think about the actual trade when we enter or exit a position, we support a lot of DEXs, Uniswap v2 and v3 for example. And depending on the chain, this DEX LP strategy that we are about to launch is something that we are supporting for Curve for the first time. It allows users to borrow an LP token from a stable Curve pool, which allows them to earn the pool’s APY plus the interest on their coins that are part of that pool.“
The app caters to different user roles, with lenders, farmers and traders each having dedicated sections within the app tailored to their specific needs. This includes support for different DeFi strategies, leveraged trading, and integrations with popular DEXs such as Uniswap. The platform also leverages the Keeper infrastructure to automate certain actions and incentivize participation.
With the launch of its own Telegram Mini App, Primex PricePulse, the project is exploring Telegram’s potential as an alternative interface for accessing DeFi. In their game, users predict the future prices of Bitcoin, Ethereum, and partner tokens, earning points for correct predictions.
“For me, the long-term goal for PricePulse is to introduce trading and investment capabilities and make them as simple as possible. Doing all these onchain actions in a custodial way is possible thanks to different solutions like Dynamic, for example. It’s not for Telegram, but it’s a wallet that simplifies onboarding for a lot of Web2 users,“ Tolok said.
Bringing RWA to DeFi
The potential for RWA tokenization in DeFi excites the Primex team. “The biggest value that blockchain and DeFi can bring to these assets is financial programmability because it’s not available in the real economy,“ Tolok shared, highlighting the limitations of traditional finance. “With smart contracts, all the financial logic can be much more transparent and decentralized.“
While the RWA sector may eventually reach the expected heights, integrating these assets into DeFi presents a number of challenges. “RWAs are all different architecturally and legally,“ Kostanda said. “And some of them are already onchain, tokenized in the contract, while others are only available through Web2 APIs that we have to call first and tokenize afterward.“
Currently, Primex supports assets such as Paxos Gold (PAXG), a gold-backed token, and USDY, a T-bill-backed stablecoin. “By supporting value-accretive stablecoins like USDY, it’s possible to essentially take a position as leverage to increase your APY through us. This is sometimes for the lending side if you’re on the borrowing side,“ Kostanda explained. “We plan to add a little bit more commodities and assets in the future. It’s important for us to essentially be a tool that enables both lending and borrowing for these assets.“
“We are going to implement an intermediary solution that will be able to actually do the KYC for an entity on behalf of the RWAs. It will be available to the user as a sort of index. We expect that legally it will be the right solution to be a partially licensed RWA,“ said Tolok.
One of the key benefits of accessing these assets through Primex is the removal of barriers to entry. “One of the key benefits that users will have when accessing these assets through Primex is that there will be little to no minimum requirements for users,“ Kostanda emphasized, contrasting this with the often high minimums imposed by protocols directly. “Through us, for example, even a small position of $100 is possible if you want to enter a T-bill-backed stablecoin.“
Cross-margin portfolios
The most anticipated feature of the next upgrade of Primex Finance will be the introduction of portfolio management. Portfolios will allow users to manage multiple positions under a single umbrella. “Currently, the positions that the trader or farmer can open are isolated margin positions. But in the next version, we plan to introduce portfolios, which are basically a bunch of positions with a common health factor. This cross-margin portfolio will allow the construction of more advanced financial instruments, even something similar to an option, for example,“ Tolok revealed. He also highlighted the potential for creating synthetic options by combining long and short positions within a portfolio and suggested other benefits such as rebalancing LP positions.
Ultimately, portfolios offer users greater flexibility and control over their DeFi activities. “Such a portfolio is an extension of a position we have now, and it will allow users to borrow multiple assets and take multiple positions, all with the same health factor,“ summarized Tolok. “It includes maintaining existing features such as automated liquidations and stop-loss or take-profit orders.“
While acknowledging the complexity of this undertaking, the Primex Finance team expressed confidence in their ability to deliver: “It’s not trivial to implement such a solution, but we see some great standards already available in Solidity and also in the blockchain space in general that can enable the implementation of such a solution.“
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