Frequently Asked Questions

Do you have any questions regarding Babylon DEX? If so, here are some frequently asked questions that may help

What is a Decentralized Exchange?

A decentralized exchange (DEX) is an exchange platform that allows users to trade cryptocurrencies and other digital assets directly, without the need for a central authority or third party. Unlike traditional centralized exchanges, DEXs operate autonomously on the blockchain, meaning they are not subject to the regulations of a single entity. This provides users with more control over their funds and security against potential hacks or malicious actors.

How secure is a Decentralized Exchange?

The main advantage of using a DEX is the increased security and privacy when compared to centralized exchanges. With a DEX, users can trade without having to trust a third party with their funds. Additionally, since DEXs are built on blockchain technology, they also offer more transparency than centralized exchanges, as all transactions are recorded on the blockchain and can be verified by anyone.

What are crypto Perpetual Contracts?

First of all, crypto perpetual trading pairs like BTC-USDT, ETH-USDT, ETH-USDC, etc., tell you about the asset you can use as margin to open your long/short positions. So, BTC-USDT suggests that you must deposit margin in USDT stablecoin to open a long/short BTC perpetual contract. Notably, a perpetual contract is a derivative similar to a futures contract but without an expiry date. The trading pairs vary from exchange to exchange.

This feature enables traders to hold onto their positions, even if the market moves against them, without being forced to take losses. By maintaining sufficient maintenance margin, traders can keep their positions open and wait for prices to turn in their favor again.

While perpetual contracts offer great flexibility, traders need to be mindful of the funding rate which ensures that the perpetual asset price remains closely aligned with the underlying asset price. To trade perpetual contracts successfully, it is crucial to practice careful risk management and gain an understanding of the associated risks.

What is a Crypto Funding Rate?

Unlike traditional futures contracts, which automatically move closer to the spot price as the expiry date approaches, crypto perpetual contracts don't have an expiry date. As a result, their prices may deviate from spot prices based on market conditions.

To ensure that perpetual contract prices remain closely aligned with spot prices, crypto exchanges implement a funding rate system. This involves paying or receiving a tiny percentage of your position's value to your counterparty at regular intervals, usually every 1, 4, or 8 hours. Typically, when the market sentiment is bullish, the price of the perpetual contract is higher than the spot price, and vice versa.

Funding Rate in Perpetual Contracts

What are DEX aggregators?

DEXs are the foundation of DeFi, while DEX aggregators are the power tools for heavy users, since they allow for more cost-effective large transactions.

The emergence of DEXs and automated market makers (AMMs) in the cryptocurrency space has created a need for tools to assist traders in finding the most efficient and cost-effective routes for their trades. To address this need, DEX aggregators have been developed. These solutions scan live exchange rates across multiple DEXs and liquidity sources, and present traders with a list of the best options for the specific asset pair they are looking to trade.

Currently, DEX aggregators have reached a point where they possess their own liquidity pools, making it difficult to differentiate between them and DEXs. This emphasizes the composability of DeFi, as DEX aggregators are built on top of DEXs to cater to diverse user needs, bringing about a whole array of creative solutions, thanks to the competitive and interdependent environment.

Why are DEX aggregators essential?

For larger trades, DEX aggregators can be invaluable in providing the best possible price execution across the various DEXs. By grouping together multiple liquidity sources, these aggregators are able to find the most cost-efficient routes for a single transaction. This way, traders can benefit from gas savings and minimize the price slippage that can be caused by low liquidity. To assess the performance of a DEX aggregator, four key elements need to be taken into account: routing algorithm, sources of liquidity, current market state, and transaction size. Babylon is on the brink of revolutionizing the DEX space with its distinctive decentralized approach.

What types of digital assets can I trade on Babylon?

Babylon supports a wide range of digital assets across 30+ blockchains ( including Bitcoin, Ethereum, BSC, Dogecoin, Avalanche, Arbitrum, CosmosHub, Thorchain, Maya, Kujira and more) including native assets and tokens. The platform is constantly expanding its selection of supported assets, so be sure to check back regularly for updates.

Babylon: + Pioneer Derivative DEX Aggregator

Crypto derivatives such as perpetual contracts have gained popularity among traders due to their flexibility and lack of expiry dates, but it's hard to track the best trading options with various perpetual exchanges.

A perpetual DEX aggregator solves this by combining multiple perpetual DEXs' assets and scanning live funding rates. This provides a comprehensive view of the market, enabling traders to identify the best opportunities across different exchanges and make informed decisions. A perpetual DEX aggregator is essential for maximizing profits, giving traders a competitive edge in the perpetual trading landscape.

What fees does Babylon charge?

Babylon Finance charges 0.25% affiliate fee, that is decreasing with transactions' sum. Also, be aware of fees that are applicable to each transaction on decentralized exchanges, contingent upon the network employed and the sum being transferred.

How do I get started with trading on Babylon?

To get started with trading on Babylon, simply create a Web3.0 wallet account such as Metamask if you don't have one. Once your account is created, you can then deposit funds into your wallet. Once this is done you can start executing trades and managing your portfolio as desired.

How to Swap? A Guide

Whether you're a beginner or an experienced trader, our platform provides a seamless experience for managing your crypto portfolio across multiple blockchains. This guide will walk you through.

Step 1: Setting Up Your Wallet

Install a Wallet: For this guide, we're using XDEFI as an example. Download and install it from its official website (https://www.xdefi.io/). Secure Your Wallet: Safeguard your recovery phrase and ensure your wallet is secure. Add Funds: Deposit your preferred cryptocurrencies into your wallet. Babylon supports a wide array, including BTC, ETH, AVAX, BSC and more.

Step 2: Connecting to Babylon

Navigate to Babylon: Open your web browser and go to app.babylonswap.io Connect: Click on "Connect Wallet" on Babylon's homepage. Select your wallet from the available options and authorize the connection. Authorize Connection: A pop-up from your wallet will appear, requesting permission to connect to Babylon. Confirm to proceed.

Step 3: Navigating Babylon

Cross-Chain Swaps: Thanks to our integrations, like Maya & Thorchain, move effortlessly across 9+ blockchains. Optimized Trading: Enjoy trading at optimized costs and zero affiliate fees making your DeFi experience not just versatile but also economical. Dashboard: View your portfolio's current value, asset distribution, and recent activity (soon).

Step 4: Making a Trade

Select Assets: In the trade section, choose the asset you want to swap from and the asset you want to receive. Enter Amount: Type in the amount you wish to trade. Babylon will automatically calculate the equivalent amount of the receiving asset. Review & Confirm: Choose a route, check the transaction details, including fees (slippage & gas). Babylon supports multiple blockchains, so ensure you're using the correct address format for the asset you're transferring. If everything looks good, confirm the trade. Wallet Confirmation: Wallet will prompt you to authorize the transaction. Review and approve to finalize the trade.

Step 5: Managing Your Portfolio

Portfolio Overview: Get a snapshot of your current holdings and their performance. Adjust Your Investments: Based on your strategy, easily adjust your portfolio by trading different assets.

Need Help?

Got questions? Stuck on something? Babylon's customer service is available 24/7 on discord via support tickets to answer any questions you may have about using the platform or trading digital assets in general.

Does Babylon have any mobile apps?

Not yet, but Babylon is taking the necessary steps to ensure their platform is accessible anytime, anywhere. By developing iOS and Android applications, users will gain access to all the features of the desktop version, including portfolio management tools and passive income capabilities, enabling them to manage their finances from anywhere.