📄️ Perpetual Futures
Perpetual Futures are cash (stablecoin) settled contracts that are non-expiry. Trading perpetual futures are similar to margin - based spot trading, except no interest rate is applied to you position.
📄️ Virtual AMM (vAMM)
A virtual Automated Market Maker (vAMM) is a system that provides synthetic (or virtual) liquidity, allowing traders to buy and sell derivatives entirely on the blockchain.
📄️ Funding Payment
Every hour, traders with open long or short positions will pay each other a funding payment, depending on market conditions. If the contract price is above the index price, longs will pay shorts. If the contract price is below the index price, shorts will pay longs. The size of the funding payment is a function of the difference between the contract price and the index price, as well as your position size. This incentivizes traders to take the unpopular side of the market.
📄️ Liquidation
Futures are a leveraged instrument, increasing both potential profit and losses. With vAMM you virtually borrow additional funds to increase you position size. Leveraged trading is a highly risky activity, with the possibility of being liquidated.
📄️ Insurance Fund
Leveraged trade inherently imposes some risks on both trader and protocol. During highly volatile market conditions, slippage and delayed execution can result in some accounts having a negative balance post-settlement.