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FAQs

The most commonly asked questions from the Avantis community !

1. What are Perpetuals?

Perpetual contracts, also known as "perpetuals" or "perps" are a type of derivative contract that allow traders to speculate on the price of an underlying asset, such as a cryptocurrency, without actually owning the asset. These contracts are called "perpetual" because they do not have an expiration date and can be held indefinitely.

2. What is Base?

Base is an Ethereum Layer 2 (L2) network offering a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps or “dapps” onchain. Base is being developed by Coinbase, one of the most trusted full-stack exchanges in the cryptocurrency / blockchain sector. Avantis is built on Base, and the Base Ecosystem Fund is an investor in Avantis Labs, the parent entity of the Avantis protocol.

3. What is USDC?

USDC is a digital stablecoin created by Circle, and its value is pegged 1:1 to the US dollar. It is used as collateral for trades on Avantis, as well as for LPs looking to invest in our market-making vaults.

4. What is the best way to get started using Avantis ?

Our mainnet alpha is live at https://www.avantisfi.com/trade. You'll need an EVM-compatible wallet as well as USDC and ETH on Base. For more in-depth information on how to get started, check out our Tutorials.

5. Why is the coin/asset I want to trade not listed?

Coins and assets are listed when we can provide a reliable trading experience for them. This is determined based on the availability of a sufficient number of price sources as well as the trading volume and liquidity of the pair from the price sources.

6. Where does the collateral go when I close for a profit / loss?

If you close in profit you will always be paid out. You are paid out from the USDC vault which bears the risk as the counter-party to traders. If the trade is closed at a loss, you are paid out the remaining portion of your collateral from the contract and the portion which is your loss goes to the vault (unless you have been liquidated - in which case all collateral goes to the vault). The portion of the collateral which was your loss remains in the USDC vault to be used to pay out other traders or be used in the protocol's insurance fund.

7. What do TP/SL/LIQ mean ?

TP stands for take-profit, or the ability to close out your trade position at a certain profit % (or at a certain price). SL stands for stop-loss, which is the opposite of take profit (i.e., preventing any further downside from your trade position), and LIQ stands for liquidation price.
8. What are market and limit orders ?
a. Market orders are orders that are executed at market price ( + / - any price difference between opening and execution, i.e "price impact").
b. Limit orders execute a long position when the underlying asset reaches a lower price than the current price, and a short position when the underlying asset reaches a higher price than the current price.

9. Can I go into debt?

No, you cannot go into debt. You can only lose the collateral you stake. Naturally, if your position has reached a point where it must be liquidated (-90%) your loss will be all of your collateral. Otherwise, your gain or loss will be what is returned to you. Do not put up more collateral than you could afford to lose, and use stop losses and take profits to help manage risk better.

10. Can I use other stablecoins as collateral?

You cannot. Other stables can be easily converted to USDC within our in-app exchange tab. We plan to add native support for other stablecoins in the future.

11. Who has Avantis been audited by ?

We have been audited by Zellic and Zokyo! Additionally, we are working together with Chaos Labs to help set our genesis trading parameters. Learn more about our security partnerships on our Security page.

12. Where else can I find help if I have a problem or question?

Our discord is live! Post your questions and a community member or moderator will help you in the "General" channel. Please read the chat rules. If you need 1:1 help from a team member, please open a ticket.

13. Why is an hourly fee necessary?

This allows traders to use lower leverage while still allowing adequate risk management for the protocol. Without this, the entire maximum open interest (i.e., the sum of long / short trade volumes) possible for a pair could be taken up for a long time - entirely stopping other traders from even having the option to trade on these pairs. Hence, hourly fees allow for LP protection, and equitable trading. Our hourly fee is also dynamic based on the long-short skew, which protects LPs in a skewed (long only or short only) market

14. Why is price impact necessary?

Price impacts are necessary to prevent oracle manipulation, and to ensure we can still offer the best possible prices across CeFi and DeFi.