🚰For Liquidity Providers

As trading volume in perpetual futures markets is heavily constrained by the amount of liquidity available, the protocol is heavily geared towards the liquidity provider to make it as safe, and lucrative as possible.

Here's how:

• Delta Neutral Markets: As trader's profit / loss is settled through the liquidity pool, the closer markets are to a 50:50 ratio of long and short positions, the lower the risk of impermanent loss. As a result, we have implemented a dynamic funding rate system, and price impact mechanism designed to incentivize harmony between longs and shorts.

• 70% Fee Rebates: In total, 70% of all of the fees accumulated by a market are distributed directly back to liquidity providers.

• Borrowing Fees: When traders use leverage, they are essentially borrowing liquidity from the liquidity pool. This has the downside of taking up a portion of available liquidity that could potentially be used by other traders. As a result, to circumvent traders sitting idly in positions and taking up excessive portions of the available liquidity, we've implemented a borrowing rate system, through which traders pay a fee based on the amount of time their position remains open. This has the added effect of maximizing fee generation by the liquidity pool, which is ultimately value that redirects back to liquidity providers.

• Dual-Sided Liquidity: Each liquidity pool, no matter which market the liquidity is for, consists of ETH / WETH, which backs long positions, and USDC, which backs short positions. Under the assumption that crypto-assets are generally correlated in direction, when prices of assets rise and long positions become profitable, the value of the liquidity backing those long positions also increases proportionally, to accomodate the payout of long profits. Conversely, when prices decrease and short positions become profitable, the value of the short liquidity remains stable, ensuring their isn't a correlated decrease in the value of the underlying liquidity.

• Auto Deleveraging: In extreme scenarios, when traders become very profitable due to favourable price movements, it's possible that a large portion of the liquidity pool is owed to active traders, which would result in the liquidity providers taking on excessive losses. To combat this potential scenario, our markets implement auto-deleveraging, where once a specific PNL:Pool ratio is reached (usually ~ 45%), profitable traders are automatically forced to realize profits, subject to slippage, until the health factor of the market is reduced to a suitable level.

• Maintenance Margin Requirements: As crypto assets can be volatile, to safely offer high leverage while minimizing the risk of bad debt accruing to the liquidity pool, we've implemented a dynamic maintenance margin system. Where the higher the leverage that is used, the higher the required maintenance margin percentage of the position. At 1000x leverage, a position has a required maintenance margin of 20%, where at 1x leverage, it's just 1%. The scale is linear, with the formula: maintenaceMarginPercentage = 1 + (19% * (leverage / maxLeverage))

• Trust Score System: To ensure liquidity providers are as aware as possible of the potential risks associated with supplying liquidity to a specific market, we have implemented a boutique trust score system, where markets are scored on scale of 0 - 100 based on a number of factors, such as: market cap, time since conception, price volatility and more.

• Robust Pricing Mechanism: Pricing assets is a notoriously difficult problem for AMM-based perpetual futures protocols, especially for longer-tail assets, as prices can be easily manipulated. Due to this, all of the asset prices are aggregated from a list of reputable sources, and weighted by reliability, to ensure they're as tamper-proof as possible.