How Perpetual Works
Last updated
Last updated
To allow for leverage, traders borrow assets from the pool to create a larger position. To create a 2x long position WALEO-USD, the other 1x WALEO will be borrowed from the pool.
This borrow leads to a hourly borrow rate to be paid to the pool. Positions always pay borrow fees and are never paid funding.
Traders pay an hourly borrow fee to the pool based on the hourly borrow rate, position size, and token utilization percentage. This is computed for each token that a trader borrows.
hourly borrow fee = tokens borrowed/tokens in the pool * hourly borrow rate * position size
For example, suppose WALEO is at 50% utilization and assuming an hourly funding rate of 0.01%. Then a trader with a long position WALEO-USD of size 1000 USD will accumulate funding fees at a rate of 0.05 USD per hour.
The maximum allowed leverage is 100x. Positions where the trader's collateral less fees and less unrealized losses is less than 1% of the position size will be liquidated. Extra fund from position closure will be returned to the trader automatically.
AlphaSwap Perps use on the trading prices and chart data. For position changes, such as opening, closing or liquidating positions, we utilize Aleo Oracle's prices. In times of congestion, we will use the backup Aleo oracles. This improves reliability for traders to adjust their positions.