Brokerage services have gone through important evolutions that have provided customers with more innovations and security. But even with this progress, transparency problems remain a significant threat in the industry, which can potentially put investors’ funds and lucrative opportunities at risk. This is where Shield is trying to make a difference.
As a solution, a decentralized finance (DeFi) platform was created to bring forth fast and trustless transactions that can finally eliminate the ‘trust issues’ hounding the brokerage industry.
What is Shield?
Shield is a decentralized derivatives trading protocol that sits on a fully non-cooperative game network and is comprised of traders, brokers, liquidators, public pool LP, and private pool LP.
The platform believes that blockchain technology and the non-cooperative game system will be the future of the derivatives protocol and would soon be adopted by the global derivatives tradings markets.
SLD Token serves as the utility token of the Shield platform and is intended to incentivize the platform’s decentralized autonomous organization or DAO. The platform distributes 100% of the revenue generated from the trading fees to the value creators or everyone involved in maintaining the network’s decentralized nature.
Roles That Power The Shield Network
Every role within the Shield network is designed to benefit both the participants and the entire network, and while value creators work for their specific interests, they all contribute to the stability and security of the platform, which, in the end, is beneficial for everybody.
Here are the roles that interested participants can play in the Shield network.
They open long or short positions both for hedging and speculative purposes, and they are equipped with the ability to adjust their risk exposure based on the current market conditions through Shield’s fixed funding fee cost approach.
They pay trading fees and funding fees for their trading transactions and they serve as the “buyers” of the platform.
They provide liquidity to the Shield’s public pool and focus on retail liquidity mining participants and profit from the percentage of Funding Fees and token incentives. The public pool also serves as the senior tranche, which provides limited market risk exposure to participants and only gets over liquidated positions from the platform’s private pool.
This pool is utilized when the whole private pool hits insufficient liquidity, or the liquid provider’s order margin is inadequate. Platform users can earn LP rewards in SLDs by participating in liquidity mining.
They provide liquidity to the platform’s private pool and are focused on taking orders and operating their net position through various hedging strategies. A large percentage of the LP2 or the private pool are institutions and derive their profits from market-making strategy and funding fee accounts.
The people who comprise this pool contribute liquidity to Shield’s private pool by using their skills and capabilities in professional market-making capabilities.
For their contributions, they earn an order taking liquidity bonus in the form of SLD and trader’s funding fee.
They can earn up to 40% commission for bringing new traders that finally trade on the Shield network. The platform’s “Broker Campaign” commission program encourages brokers to introduce and bring new traders to the Shield Network.
Their task is to trigger a liquidation contract when a funding fee account or liquidity margin hits an insufficient balance. Liquidators receive 150% of the gas expenses as arbitrage rewards.
Perpetual Options is the platform’s derivative tool that features long-term on-chain options and eliminates the big risks involved in rolling options.
Here are the major features of the Shield Perpetual Options:
- Easy accessibility: A stable internet connection and a crypto wallet is all needed to get started
- Round-the-clock on-chain trading in a non-custodial and trustless environment
- Eliminates email requirements and KYC registration
- Provides strong liquidity through Dual Liquidity Pool using a Peer-to-peer model
- Daily funding fee comes from maximum trading loss
- Referrals are incentivized through a decentralized brokerage
- Gas fee and competition-based incentives are provided for external liquidators
How To Start Trading on Perpetual Options?
Step 1: Go to the Shield website and hit the ‘Start Trading’ button.
Step 2: Connect the MetaMask wallet and switch to the Binance Smart Chain or BSC network.
Step 3: Enter the funding amount, click the ‘Deposit’ button, and sign the transaction on the wallet.
Step 4: Choose a preferred trading pair, select between a long or short order, enter the amount and click the ‘Open’ button.
Step 5:Open the long position, thoroughly check the funding fee locked, and verify the order.
Step 6: The process is finished, and the order status can now be checked.
Reminders on Perpetual Options
The Perpetual Option Contract is equipped with a funding-fee mechanism. In case there is an unfavorable price movement in the market, participants wouldn’t be hit by any loss and can keep an open position as long as they maintain enough funds in their prepaid funding fee.
If a participant’s funding fee balance hasn’t reached the fees required to maintain an open position, liquidation will be activated, shutting down his position as a result.
Steps on How To Provide Liquidity in Public Pool
Step 1: Visit Shield’s website and connect the wallet.
Step 2: Choose the preferred liquidity, enter the amount of assets, review the details, and click the ‘Confirm’ button to finish the transaction.
Step 3: Once the reTOKEN, which corresponds to the token deposited, has been received, check the share in the pool.
Step 4: Go to the Shield MINING page, enter the reTOKEN, and press the ‘lock’ button.
Step 5: SLD real-time rewards can now be checked.
Providing Liquidity on Private Pool
Shield’s private pool is specifically designed for professionals with a higher appetite for risk and has a long experience and thorough understanding of hedging positions.
Participants will be required to provide USDT, USDC, and DAI, and in return, they will receive SLD tokens based on the transaction fee of their order.
This pool comes with a higher risk but provides significant rewards for investors, and the benefits they will receive will come in the form of SLD tokens.
Here’s a quick look at how rewards are calculated in this pool:
SLD amount = Transaction Fee of the investor’s order*15%0.05 SLD.
How To Earn As Shield’s Broker
The Shield network utilizes a decentralized brokerage system that encourages brokers to provide education and consulting services to traders they bring in the network in exchange for incentives.
Referral and affiliation rewards will all be on-chain, meaning this mechanism will virtually turn brokerage into a trustless process; as a result, Shield can finally solve the transparency issues that usually arise in the non-blockchain brokerage system.
The platform uses a competition-based ‘grading’ system to provide rewards on referrals made by brokers. Shield divides brokers into three categories, and each category will be based on their performance and will provide different levels of commission.
The top 20 performers will be identified as Level A, top 21-50 as Level B, top 51-100 as Level C; and the remaining brokers outside the Top 100 brokers will be classified as Level D.
For the Commission Rate, both Level A and B will have a 40% cut, and 30% for Level C. When it comes to Rewards Pool Distribution, Level A will enjoy 60% commission, Level B, 40%, and Level C -10%
Shield’s innovative rewards system and its full use of blockchain technology provide traders, brokers, liquidators, and pools the privilege to earn in a secure and trustless environment that will enable them to finally grow their wealth further and tap new opportunities.