Introduction
Diving into the world of digital trading, we stumble upon a remarkable platform that seems to be setting new standards: Flash.Trade. This isn’t just another entry in the vast sea of Decentalized Exchanges; it’s a game-changer. Built on the powerful Solana blockchain, Flash.Trade cleverly merges the efficiency we’ve come to expect from centralized exchanges with the security and transparency of blockchain technology.
At its core, Flash.Trade is designed with today’s trader in mind, offering features like leverage up to 100x, reduced price impact, and competitively low fees. It’s an inviting arena for both the experienced trader looking to maximize their strategies and the beginner eager to dip their toes into the cryptocurrency waters. What sets Flash.Trade apart is its unique approach to liquidity – a pool-to-peer model that effortlessly bridges the gap between trading and liquidity provision.
As we delve deeper into Flash.Trade, we uncover the thoughtful integration of technologies such as the Pyth Oracle for real-time pricing and an innovative use of NFTs that not only engage but also rewards users. Flash.Trade isn’t merely a platform for trading; it’s a vibrant ecosystem aimed at redefining what we thought possible in the realm of decentralized crypto trading.
Join me as we take a closer look at Flash.Trade, exploring its foundations, how it operates, and its bold vision for the future of DeFi.
Getting Started
To start, you’ll need a digital wallet specific to Solana, like Phantom or Backpack, to store your digital assets securely. This wallet will have a secret recovery phrase and a private key. It’s extremely important that you DO NOT share this with anyone as they can control your funds should they gain access to this information.
Once you have your wallet set up, you can connect it to Flash.Trade and begin trading with supported assets like BTC, ETH, SOL, and USDC. All these assets can be used to provide liquidity to trade. We should note that a small amount of SOL will be required for every transaction on Flash.Trade as it is an on-chain DEX.
Once you have funded your wallet, you can visit their official website to begin exploring the platform or sign up using this referral link to save 5% on fees.
Hit ‘Get Started!’, connect your wallet and you’re ready to trade, it’s that simple.
Flash Beast NFTs
A Flash Beast is a special type of digital collectible, known as an NFT. Each Flash Beast is one-of-a-kind and does a lot more than just look cool.
It acts as your personal trading account on Flash.Trade, keeping track of your trading stats and earning you rewards as you use the platform. The more you trade, provide liquidity, or invite friends through referrals, the more points you earn, which they call Voltage Points (VP). These points help your Flash Beast level up and unlock new benefits for you, like lower fees when you trade.
When you refer friends, you receive a percentage of their trading fees as rebates. Rebates from trades made by referees linked to a Beast will be sent directly to the Beast holder as those trades happen. The amount of fees you get from these rebates is tied to your Beast’s level. So, as your Beast grows and reaches higher levels, the percentage of fees you earn from those rebates will increase, even for referees who joined under your referral when your Beast was at a lower level.
Your Flash Beast NFT isn’t locked down to your account forever. If you ever decide to sell or transfer it, all the trading benefits and the identity of the account go with it. Rewards remain attached to the Flash Beast, regardless of owner, meaning that the new owner will receive the benefits after purchase.
So how do you level up your Beast? Check out the table below!
NFT holders can earn VP in the following way:
- $10 of Crypto or Non-Crypto Trading Volume = 1 VP Earned
- $1 Generated as LP = 50 VP Earned
- $1 Generated as a Referrer = 250 VP Earned
Note: No VP will be awarded for positions that are closed using a Take Profit or Stop Loss.
The Pool-to-Peer Model
When you trade on Flash.Trade, you’re participating in what’s called a Pool-to-Peer model. This model is made up of Liquidity Providers and Traders. Here’s what that really means:
- Liquidity Providers (LPs): These are people who put their digital currencies, like Bitcoin or Ethereum, into a big shared digital pool. Think of it as a communal pot where everyone’s contributions are mixed together.
- Traders: Traders use this pool to make their trades. Whether you want to bet on the price of a digital currency going up (long) or down (short), you use this communal pot to take that bet, with the flexibility of using different assets as your collateral.
- Matching Orders: On a CEX, you need someone to take the opposite side of your bet to make a trade. Here, your orders are matched against the pool directly, thanks to the Pyth pricing system that uses reliable sources to set fair prices.
- Always Available: Because of this pooled approach, you can always make a trade, anytime you want—no waiting for someone else to match your order.
- Earn by Providing: If you decide to be a liquidity provider, you’re rewarded with a share of the fees from all the trading that happens. It’s a way to earn something extra on the side.
So, the Pool-to-Peer model is a way for you to trade with freedom, without worrying about finding someone to take the other side of your trade, and for those providing the liquidity, it’s a chance to earn from the platform’s activity.
Pyth Oracle Pricing Engine and Fee Distribution
The Pricing Engine on Flash.Trade uses a system powered by Pyth to determine the current prices of assets being traded. Pyth is a network that collects price information from various sources to ensure that the prices used on Flash.Trade are accurate and up to date. The system helps protect against price manipulation by using this aggregated data to set the trading prices.
Fee Distribution on Flash.Trade involves sharing the fees collected from trading activities with those who provide liquidity to the platform. When trades are made, small fees are charged. These fees are then divided as follows:
- 70% of the fees go to the liquidity providers (those who have contributed their assets to the pools), rewarding them for their contribution.
- 30% is allocated to the Flash.Trade protocol itself, supporting the development and maintenance of the platform.
- Flash Beast NFT holders receive 100% of the fees generated from the mint funds that were provided as liquidity in the FLP.
Advantages of Pyth Oracle in Trading:
- Real-Time Data: The Pyth network updates prices frequently, which is crucial in the fast-paced world of cryptocurrency trading, ensuring that every live trade is executed at the most accurate price possible.
- Broad Market Coverage: By aggregating data from multiple sources, Pyth provides a comprehensive view of the market, reflecting true market conditions rather than isolated data points.
- Trust and Reliability: The system’s design to counteract price manipulation enhances trader confidence in the platform’s pricing mechanism, ensuring a fair-trading environment for all participants.
Liquidity Pools and Token Balances
Flash.Trade has something called liquidity pools. These pools are like shared funds where people add their digital currencies. Why? So that there’s always enough for everyone to trade with when they want to. This availability is crucial for a smooth trading experience.
Within these pools, you’ll find a mix of different digital currencies like Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and USDC. Flash.Trade has set specific proportions, or ‘balances,’ for each currency in the pool. Think of it as a recipe – there’s a ‘target ratio’ for how much of each currency should be in the mix for the perfect balance. There’s also a ‘min ratio’ to show the least amount and a ‘max ratio’ for the most of each currency allowed in the pool.
The platform manages two main types of pools: FLP.1 and FLP.3. FLP.1 is the primary pool with the four main currencies, while FLP.3 is like a special beta version for trying new things on Solana.
Providing liquidity on Flash.Trade means adding your cryptocurrency to the pool. When you add your currency to the pool, you get FLP tokens. These tokens are like receipts showing your share of the pool and they also track the value of the currencies inside. If the pool’s mix changes because people are trading or the value of the currencies changes, your FLP tokens adjust to reflect this. In return for contributing your assets, you earn a portion of the fees that traders pay when they make trades using the pool.
When the pool has reached maximum deposit, you will not be able to add to that pool until liquidity becomes available or the team increases the limit which they will announce via their Discord.
When you want to take your share out, you ‘burn’ your FLP tokens. There are fees for adding (minting) and removing (burning) your share, which depend on the pool’s current mix and are there to keep everything running smoothly. By providing liquidity, you’re supporting the trading ecosystem on Flash.Trade and earning income in the form of trading fees, which is a way to generate passive income from your digital assets.
Staking FLP Tokens
Staking FLP tokens on Flash.Trade means locking up your FLP tokens to participate in the platform’s operations and earn rewards. When you stake your FLP tokens, you are essentially depositing them into a specific part of Flash.Trade that tracks your contribution. There are three states for your staked FLP tokens:
- Unstaked FLP: These tokens are not yet participating in staking, so they don’t earn rewards.
- Pending Stake FLP: Your tokens are in the process of being staked. They are not earning rewards yet, but they will soon. The platform will add to the pool, all Pending Staked FLP at 8.00am UTC every day.
- Staked FLP: These tokens are fully staked and start earning rewards based on trading fees generated on the platform.
By staking FLP tokens, you support Flash.Trade’s liquidity and trading ecosystem. In return for staking your tokens, you receive a portion of the trading fees as rewards. These rewards are distributed daily, and you can claim them as additional income.
Crypto Asset-Backed – Pool 1 (FLP.1)
The assets in the FLP.1 pool consist of BTC, ETH, SOL and USDC.
Asset-backed trading is a way for traders to make trades without actually owning the asset upfront. It works with something called “Perpetual Swaps,” which are a kind of trade agreement that doesn’t expire.
What Is It? Traders can essentially “borrow” the value of an asset, like Bitcoin or Ethereum, from a collective pool. This means you’re trading based on the asset’s current market price, and you don’t need to own the asset directly.
Trade Settlement: Because the trading position is backed by real assets in the pool, traders can be confident that they can settle their trades anytime. This setup also means less need for a big insurance fund since there’s always enough in the pool to cover trades.
Payouts in Real Assets: When you make a profit, you’re paid in the actual asset you were trading with. For example, if you opened a long on SOL and you closed out your trade in profit, you would be paid in SOL.
How Collateral Works? If you want to make a leveraged trade (meaning you’re trading with more than you own, by borrowing), you need to provide some form of collateral. For example, if you’re betting that the price of SOL will go up, you need to provide SOL as collateral. If you don’t have SOL but want to trade it, the platform can swap your other assets into SOL for the trade which would cost you a small swap fee. Any long trade you enter into will require the same collateral as the asset you are trading.
Example: If you bring $1,000 in USDC wanting to bet on ETH going up and use 10x leverage, the platform swaps your USDC for the equivalent in ETH and opens a trade as if you’re trading with $10,000 worth of ETH.
For shorting, if you think an asset’s value will drop, you use stablecoins like USDC as your collateral. If you have a different asset, the platform swaps it for a stablecoin to open your position. Any short trade you enter into will require USDC as collateral.
Asset-Backed Pool: This is the pool that holds the actual assets you’re trading with. It ensures that whether you’re making a long or short trade, there’s always a real asset backing your trade. This means there’s always a way to settle your trade, whether you’re winning or losing.
Asset-backed trading on platforms like this makes trading more direct and secure, letting you trade with confidence knowing that every trade is backed by real assets.
Synthetic – Pool 2 (FLP.2)
In the Synthetic Pool, you can trade different types of assets like the Euro (EUR), British Pound (GBP), Australian Dollar (AUD), Gold (XAU), and Silver (XAG). This pool is special because it uses stablecoins like USDC as the base for all trades. This means when you trade, you’re essentially using these stablecoins to back your trades, ensuring stability and reducing risk.
What Can You Trade: You can trade currencies and precious metals against their value in USD within this pool.
How It Works: Whether you want to trade gold or euros, you can start any trade using the stablecoins in the pool as your backing.
Profit Limits: There’s a limit to how much profit you can make on these trades. Right now, the most you can gain is equal to the amount you initially put in. This is likely to change in the future.
Trading Hours: The times you can trade these assets follow the official market hours, and you can’t trade when the market is closed.
Example: If you’re trading with $100 of USDC and decide to go long on XAU with 10x leverage, the highest profit you can make is $100. Once you hit this limit, your trade closes automatically, and you get your profit.
USDC is used as collateral in this pool for both longs and shorts.
Note: You can only trade or provide liquidity when the markets for these assets are open. If the market is closed, you can’t open or close positions or change your investment in the pool.
Solana Beta Asset-Backed – Pool 3 (FLP.3)
The assets in the FLP.3 pool consist of JUP, PYTH, JTO and USDC.
The Solana Beta Asset-Backed pool also utilizes Perpetual Swaps. It functions the same as Pool 1 in the sense that any long trade on an asset within the pool needs to use the same collateral. For example, if you open a long trade on JUP, you need to provide JUP as the collateral.
Shorting is the same as Pool 1 as well. For example, if you open a short trade on JUP, you need to provide USDC as the collateral.
Trading Fees
There are three types of fees a trader may have to pay that vary depending on which pool you are trading from. Let’s take a look:
Crypto Assets (Pool 1)
Open/Close Fee: You pay a small fee of 0.08% of your trade’s total value, whenever you open or close a trade with cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), or Solana (SOL).
Margin Fee: If you keep a trade open, there’s an ongoing fee based on how big your trade is and how much of the pool’s assets it uses. The pool has a usage cap of 90% to make sure there’s always enough for liquidity providers to withdraw their share.
Swap Fee: If you trade using a different asset than required for collateral, you’ll pay a small fee. This fee varies based on the current mix of assets in the pool.
Synthetic Assets (Pool 2)
Open/Close Fee: You pay a small fee of 0.08% of your trade’s total value, whenever you open or close a trade with FX currencies, and a 0.1% fee for Metals.
Margin Fee: There’s a continuous fee for keeping a trade open, also based on the trade’s size and the pools asset usage, with a maximum pool usage of 80%.
Swap Fee: Trading with an asset different from the collateral needed leads to a small fee, adjusted by the pool’s asset balance.
Solana Beta Assets (Pool 3)
Open/Close Fee: Opening or closing trades with Solana Beta assets (like JTO, PYTH, and JUP) costs 0.15% of the trade’s total value.
Margin Fee: An ongoing fee applies for open trades, dependent on the trade’s size and pool asset usage, with an 80% cap on usage.
Swap Fee: Using a different asset for collateral than what’s required incurs a small fee, which changes based on the pool’s asset distribution.
Trading fees are not deducted from your collateral or unrealized PnL as the trade is on-going but instead accrue in real time. If your collateral minus accrued fees falls below the minimum initial margin required to keep the trade open, you will be liquidated. It is important you keep an eye on the accrued fees to avoid this happening. You can add collateral to your position when required by clicking the ‘Manage’ button in your open position and selecting ‘Add Collateral’.
When trading on the platform, you’ll encounter fees for opening and closing trades, keeping trades open, and swapping assets for collateral. These fees vary by asset type and are designed to cover the costs of trading and maintaining liquidity in the pools.
Take Profit, Stop Loss and Liquidation
Ways to manage your trades more safely and effectively using Stop-Loss (SL) and Take-Profit (TP) orders:
Setting Up SL/TP Orders: Simply click on the “Manage” button for any of your open positions. You can then set up orders to limit your losses (Stop-Loss) or lock in your profits (Take-Profit) at prices you choose.
What Happens Next: Once you set these orders, they’ll show up under the “Orders” section. You can adjust them anytime if you change your mind about the trigger price.
How They Work: If your trade reaches the price you set for SL or TP, your position will automatically close at that price.
Cancellation: If you or a SL/TP order closes a position, any other SL/TP orders linked to that position are automatically canceled.
Liquidation: Your liquidation price is the price at which your trade will automatically close, and all collateral will be forfeited to the protocol.
The good thing about Flash.Trade is that when you are setting your leverage, a message will pop up on your screen underneath the Take Profit / Stop Loss menu, alerting you that your stop loss should be lesser than your liquidation price and preventing you from executing the trade until you rectify your leverage.
Note: Currently, no VP will be awarded for trade volume that uses SL/TP to exit trades.
Leverage and Margin
On traditional exchanges, using leverage mainly reduces the amount of money (collateral) you need to put up for a trade; it doesn’t directly increase your profits. But on Flash.Trade, the game changes. Here, your collateral stays the same regardless of the leverage you use, but your potential profits can grow as you increase your leverage.
So, the trick to earning more on your trades is to find the sweet spot with your leverage — high enough to boost profits but not so high that you risk hitting your liquidation point before your stop loss. It’s wise to keep a safe distance between your stop loss and the point where you could be forced out of your trade (liquidation), just in case the market skips over your stop loss or if fees eat into your collateral, moving your liquidation point closer to your starting position.
If you find yourself in a position where price is creeping closer to your liquidation price, you can edit your position and choose to deposit more collateral which will move your liquidation price further away.
Security and Compliance
Security on Flash.Trade is taken very seriously to protect users and their assets. The platform undergoes thorough security audits by Halborn, an elite blockchain security solutions company which examines the system for vulnerabilities to ensure that all coding practices are safe and secure. This means experts check Flash.Trade’s technology to make sure it’s robust against attacks and that your digital assets are safe while you trade.
Compliance refers to how Flash.Trade follows laws and regulations. Although it operates in the decentralized finance (DeFi) space, Flash.Trade adheres to relevant legal standards to ensure it operates within legal boundaries. However, due to regulatory restrictions, Flash.Trade is not available to residents of the United States currently. This is an example of the platform’s commitment to compliance, as it respects the regulatory environments of different jurisdictions.
Flash.Trade focuses on protecting its users through rigorous security measures and adheres to legal standards, ensuring a secure and compliant trading environment.
Advantages and Disadvantages of Flash.Trade
Advantages:
Easy to Use: Flash.Trade offers a user-friendly platform, which means you won’t have to navigate complicated interfaces.
Low Costs: Trading on the platform comes with low fees, so you get to keep more of your earnings.
Leverage Options: You can trade with up to 100 times more money than you have, increasing your potential profits.
Decentralized: The platform operates on blockchain technology, which typically means higher security and transparency. Your funds stay in your control as opposed to sitting on a Centralized Exchange.
Minimal Price Impact: Your large trades are less likely to affect the asset’s price, which can happen on other platforms.
Liquidity: Because of the pool-to-peer system, there’s usually someone to trade with, making it easier to execute trades anytime.
Disadvantages:
Complexity of Features: While the platform is user-friendly, the advanced features like leverage and NFTs may require a learning curve for a beginner.
Risk of Leverage: Using leverage can amplify losses as much as it can increase profits, which might be risky for beginners. Ensuring that price will hit your stop loss before your liquidation level is crucial for preserving capital.
Cryptocurrency Volatility: During times of high volatility, the risk of being liquidated can become higher if the Pyth pricing engine switches to High Volatility Flag mode.
Stablecoin Depegs: If USDC depegs from $1 and you are in a short position, this will cause collateral to be valued at lower than $1 which could potentially cause a liquidation.
Wallet Requirement: You need a Solana blockchain wallet to participate, which might be an extra step if you don’t already have one.
Limited to Certain Assets: Currently, you can only trade a few assets like BTC, ETH, SOL, USDC and select tokens that are listed in the Solana Beta Pool 3 (FLP.3).
US Restrictions: If you’re in the United States, you won’t be able to use Flash.Trade due to regulatory limitations.
New Platform Risks: As with any new platform, there might be unforeseen issues that could affect your trading experience.
Conclusion
It’s safe to say that Flash.Trade has laid the foundations for something truly incredible in this space. Offering perpetuals, liquidity provision and holder benefits through their NFTs, they are quickly making a name for themselves in the world of defi.
Flash.Trade offers the tools, transparency, and potential to transform your trading voyage. Here’s to charting a course toward fruitful trading adventures, where the future of trading is bright and brimming with opportunity.
Note: Flash.Trade has hinted on a potential token with which holders of Flash Beasts will receive an allocation. Its safe to assume that if/when a token is released, the amount of trading volume you do through each wallet should also qualify you for an allocation.
