🌊Why use OTSea?

OTSea brings a new, valuable use case to the defi landscape. In short, trades can be made with another user, or with multiple users, that bypass liquidity pools which can be listed at any price.

OTSea Solves the Trust Issue

One of the primary motivations for the team to create OTSea was to alleviate glaring issues we were seeing in telegram and video calls in defi throughout the years. Countless times, we heard the repeated sentiment - "If you're a whale, either sell slowly or sell your tokens to someone else," which would be consistently and unanimously followed by nods and agreement.

The problem, of course, is that you cannot do this unless you deeply trust the person you are trading tokens with. Unfortunately, in defi, we have to take a plethora of safety precautions, and while many of us would love to sell some tokens over the counter, there just hasn't been a safe way to do it.

OTSea solves the above issues by offering a smart contract as the intermediary for these peer-to-peer transactions, and an intuitive, easy to use frontend to interact with. When creating an order, the tokens are deposited in the smart contract, and held there until a buyer sends ETH to fill your order in exchange for the full order or a portion of it.

While there are many benefits to using OTSea, we believe this is the most important one, and allowing peer-to-peer, over the counter trades to be executed trustlessly has been the goal all along.

Exit Positions Quietly Without Disturbing the Charts

OTSea offers investors in any ERC20 token the option to exit their position without having any impact on the charts. The implications of this potential is obvious. Every token in every project will have incentive to convince their whales and large holders to sell their tokens on OTSea rather than dumping them on the chart, for the health of the project.

Our order crowd-funding feature is especially useful for this use case, as whales will be able to sell a large position to a number of smaller buyers.

Avoid Buy/Sell Token Taxes

In the ERC20 tokens landscape, many projects discourage buying and selling by imposing taxes when interacting with liquidity pools. The absence of pools on OTSea lets users avoid these charges, and lets them exchange tokens freely and directly with other users willing to obtain them.

Maximize Returns When Selling Tokens

The opportunity for maximizing returns when selling tokens is mostly notable when using OTC in place of large sell transactions into liquidity pools that are too small to absorb the sell. In many defi protocols, especially ones that still sit at relatively low market caps, any moderately large sized holder who wants to exit their position will get a diluted amount of ETH as a result of high price impact. This loss in returns is due to the liquidity pool for that token not being big enough to absorb the sell without substantially impacting the ETH/Token ratio.

Since OTSea does not use liquidity pools, and simple holds the tokens in escrow until they are purchased by other users, order creators can offer their tokens for sale at full price, and as long as a buyer is found, will ensure that their tokens are not subjected to losses from low liquidity pools.

Run Promotions and Discounts

Sell tokens below market price while potentially still getting more ETH for your tokens if the liquidity pool of the token is small. Or, just sell tokens slightly below market price as a promotion to boost user engagement on your platform.

Example: You're an influencer selling a large position. Instead of selling on Uniswap, and losing 10% of your ETH due to high price impact, just sell your tokens at a 5% discount on OTSea. You will get more money for your tokens, while giving a discount to your users, and simultaneously boosting engagement.

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The team will constantly be researching new avenues and new use cases for OTC trades in Defi!