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A practical introduction to Avantis

What are Perpetual Futures?

Perpetual contracts, also known as "perpetuals," 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.
Perpetual contracts differ from traditional futures contracts in that they do not have a fixed expiration date and do not require traders to physically settle the contract at a future date. Instead, traders are required to maintain a margin balance in their account, which is used to collateralize their position and ensure that they are able to meet their financial obligations under the contract

Trading Platform: Design Principles

Our trading platform has been designed with two parties in mind:

1. Traders

  • Trade perpetuals for crypto, forex and commmodities
  • Get up to 50x leverage on cryptocurrencies, and 100x on forex and commodities.
  • Hold custody of your funds (protocol never controls your funds)
    • We also offer native wallets powered by account abstraction, which combine the best of user safety with the best-in-class DeFi derivatives UX
  • Competitive fees on every order, with several incentives for traders who help balance protocol OI (open interest)
  • An unparalleled UI / UX experience for all protocol interactions

2. Liquidity Providers

  • Enable anyone to become a market maker
  • Traders bet against the trading pool that LPs deposit into
  • LPs get access to organic yield from trading activities (trading fee + trader losses), as opposed to yield based on token emissions or endogenous staking mechanisms
  • LPs get fine grained control over their risk preferences via dynamic risk tranches (see Risk Management : Tranches section) , allowing them to express their unique views on the market while being a passive LP

Trade Execution

Our trading engine is built in a way that protects LPs, while giving traders the best experience in DeFi.
  • Circle's USDC is the stablecoin LPs can deposit into the market making vault
  • Traders take leverage against the LP by posting collateral in USDC, and their fees adjust dynamically based on asset class, leverage, trade skew and duration
  • We've built a unique liquidation mechanism to protect users from large losses, and a system for automatically adjusting margin requirements based on market conditions
  • The platform supports various order types, including market, limit, and stop orders
Investing in the USDC vault is not risk-free. The risks involved include smart contract risks (i.e risk of a contract failure despite of audits) and losing money to profitable traders. Always invest responsibly, and reach out to the team / discord for any questions.