<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h2 id="3fe5f50a-2808-4b25-9ad9-1fedb8127402" data-toc-id="3fe5f50a-2808-4b25-9ad9-1fedb8127402">Introduction</h2>Strike Finance is the first perpetuals platform to launch on Cardano. Bringing in leverage trading natively. A perpetuals platform allows traders to take a long or short position with leverage. Traders will be able to control a large position with a small upfront collateral.We are pioneering an open-source protocol built on the Cardano blockchain, designed to provide users with a secure, transparent, and user-friendly platform for trading derivatives. Leveraging Cardano’s robust infrastructure, Strike Finance ensures high scalability, low transaction fees, and enhanced security for its users.The protocol aims to democratize access to sophisticated financial instruments by offering intuitive interfaces and comprehensive educational resources, empowering both novice and experienced traders. We aspire to become the go-to platform for decentralized derivatives trading, contributing to the broader adoption and evolution of decentralized finance.Derivatives Derivatives are financial instruments whose value is based on an underlying asset. There are many different kinds of derivative products for distinct use cases. Traders can use derivatives to hedge against their current position or speculate on an asset’s price movements.Motivation Current DeFi derivatives protocols are plagued with UX problems. They are hard to use for new traders and often lack the necessary features experienced traders need. They also typically offer only one or two derivatives products, limiting the options for traders seeking diverse trading opportunities. While some platforms do offer a broader range of derivatives, they are typically centralized.Solution Strike Finance will offer a decentralized platform with three major derivatives products: options, forwards, and perpetual futures. It will be available to anyone with a wallet.We have 3 key goals for our protocol:1. Create a seamless and intuitive trading experience for users of all expertise levels.2. Drive innovation within the Cardano ecosystem and contribute to the growth of decentralized finance.3. Create a platform that empowers traders to gain significant profits and protect their portfolios against volatile markets.

Introduction

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h3 id="934e9388-ef58-4774-b08d-e4d0c5390940" data-toc-id="934e9388-ef58-4774-b08d-e4d0c5390940">Forwards Contract</h3>How it Works Options contracts give traders the right, but not the obligation, to buy or sell an asset at a predetermined price before a specific date. There are call options and put options.<ol><li>Call/Buy position: Betting that the price of the asset will increase. The holder has the right to buy an asset at a predetermined price.</li><li>Put/Sell position: Betting that the price of the asset will decrease. The holder has the right to sell an asset at a predetermined price</li></ol>Hedging Options can hedge against losses. For instance, a trader holding large amounts of ADA can buy a put option to sell ADA at the current market price. If the market value of ADA drops in two weeks, the holder can exercise the option and sell at above current market price, potentially mitigating a huge loss in the portfolio.Sales and Commission Options can be bought and resold, with each sale earning a commission for the issuer. The issuer of the option may potentially earn huge profits from the commission, even if a holder exercises it for a profit.Example Scenario<ol><li>Call/Buy Scenario: A trader buys a call option on the market to have the right to purchase 1 ADA for $10 anytime within 1 month. In two weeks ADA rises to $15. The trader exercises his option and buys ADA at $10, making a $5 profit.</li><li>Put/Sell Scenario: A trader buys a put option on the market to have the right to sell 1 ADA for $10 anytime within 1 month. In two weeks ADA drops to $5. The trader exercises his option and sells ADA at $10, protecting his portfolio from a potential $5 loss.</li></ol>

Options Contract

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h3 id="934e9388-ef58-4774-b08d-e4d0c5390940" data-toc-id="934e9388-ef58-4774-b08d-e4d0c5390940">Forwards Contract</h3>How it Works A forward contract is an agreement between two parties to exchange assets at a predetermined price at a future date. Unlike an options contract, both parties must fulfill the contract at the specified date.Forwards and futures contracts are similar, the main difference is the terms of forward contracts are customizable and the settlement only happens at the end of the agreement. Futures are non-customizable and are settled daily until the end of the agreement.Price Certainty Forwards contract both parties involved to protect themselves against unfavorable market movements. By locking in the price of exchange right now, businesses can plan their finances and manage risk, knowing exactly what they’ll pay or receive for an asset at a specified future dateExample Scenario With the emergence of real-world assets on Cardano (projects like Butane), Strike Finance can facilitate commodity forward contracts.A jewelry manufacturer looking to buy large quantities of gold in 3 months when their current gold supply runs out could use such a contract. The forward contract will lock in the price of the gold at a fixed rate, thereby safeguarding the jewelry manufacturer from potential increases in gold prices during the 3-month period.

Forwards Contract

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h3 id="816b18d8-9aa9-4e07-a459-45cc4924cfd2" data-toc-id="816b18d8-9aa9-4e07-a459-45cc4924cfd2">Perpetual Futures Contract</h3>How it Works In traditional futures contracts, there is an expiration date. The settlement of the contract happens every day until the expiration date. Perpetual futures have no expiration date, meaning traders can hold their position indefinitely. There are two positions a trader can take:<ol><li>Long/Buy position: Betting that the price of the asset will increase. Buy the underlying asset at a predetermined price.</li><li>Short/Sell position: Betting that the price of the asset will decrease. Sell the underlying asset at a predetermined price.</li></ol>High Profitability With frequent payouts, traders will be able to realize their profits quickly. There are also two positions that they can take. Therefore, they can take profits in both rising and falling markets. Profitability can be amplified with leverage. By utilizing leverage, traders will be able to earn multiples of their current capital.PS: Traders should exercise caution when using leverage and implement proper risk management strategies.Example Scenario<ol><li>Long/Buy Scenario: A trader opened a long position on 1 ADA at $10, giving him the right to buy 1 ADA at $10. In one day, the price of ADA reached $11. They realized a profit of $1. If a 5x leverage was used, they would realize a profit of $5.</li><li>Short/Sell Scenario: A trader opened a short position on 1 ADA at $10, giving him the right to sell 1 ADA at $10. In one day, the price of ADA drops to $9. They realized a profit of $1. If a 5x leverage was used, they would realize a profit of $5.</li></ol>

Perpetuals Future Contract

Perpetual contracts allow traders to open a long or short position with borrowed funds to increase their position indefinitely. Traders who think an asset will go up in value will open a long position, and traders who think an asset will go down in value will open a short position. We use an on-chain oracle to ensure that large positions do not cause price impact and to eliminate slippage.Liquidity for the platform can be provided by anyone. The liquidity pool can provide high yields for liquidity providers. 100% of utilized funds go towards the liquidity providers as well as the interest traders pay to open a position.Traders will have to pay opening and closing fees for their positions. While their position is open, there is an hourly borrowing rate charged against their position.<img src="https://docs.strikefinance.org/~gitbook/image?url=https%3A%2F%2F3104501468-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fl6nT3DjbRRXrBD1ATav2%252Fuploads%252F0WdLN0ucE9W1Q8okFUd9%252FScreenshot2025-03-09at4.04.12AM.png%3Falt%3Dmedia%26token%3D177638fb-5d6d-4972-865b-296b2dd6be5d&amp;width=768&amp;dpr=4&amp;quality=100&amp;sign=8142a072&amp;sv=2">There is a TradingView chart that displays the most up-to-date price of the underlying asset. The chart also provides drawing tools and the entire history of price data. It updates every second, allowing you to make informed decisions.To create a position, navigate to the left-hand side. Simply enter your initial collateral and select your leverage. Once these fields are completed, you can click the “Open Long” or “Open Short” button to establish your position. The tab at the top lets you switch between a long or short position. Below this, you can view:<ul><li>The fees you will pay to open your position</li><li>The liquidation price</li><li>The price at which you opened the position</li><li>The total value of your position.</li></ul>After creating your position, you can manage it from the bottom left side. There are three tabs to navigate:<ol><li>Positions Tab: Here, you can:<ul><li>Add more collateral</li><li>Update your stop loss or take profit</li><li>Close your position</li><li>See your current profit or loss and your liquidation price.</li></ul></li><li>Open Orders Tab: This displays all your limit orders. You can have multiple limit orders active simultaneously.</li><li>History Tab: This shows all your previous trades.</li></ol>

Product Walkthrough

<div data-youtube-video=""><iframe width="640" height="480" allowfullscreen="true" autoplay="false" disablekbcontrols="false" enableiframeapi="false" endtime="0" ivloadpolicy="0" loop="false" modestbranding="false" origin="" playlist="" rel="1" src="https://www.youtube-nocookie.com/embed/a9R5rR3Oui8?controls=0&amp;rel=1" start="0"></iframe></div>In this video walkthrough, the Strike Finance team showcases the Perpetuals Protocol in action and covers the core product offerings for new users to try out for the first time!

Video Walkthrough

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h3 id="67ae9528-f537-4207-b967-a52a3e967ba0" data-toc-id="67ae9528-f537-4207-b967-a52a3e967ba0">Calculation Formula</h3>The settlement amount is calculated as follows:<pre><code class="language-js">Settlement Amount (in tokens) = (Collateral USD Value + PnL USD Value) / Current Asset Price</code></pre>Where:<ul><li>Collateral USD Value = Initial collateral amount × asset price at entry</li><li>PnL USD Value = Current position value - Entry position value</li><li>Current Asset Price = Current USD price of the asset</li></ul><h3 id="cd3001f5-eec4-414d-8ad8-89ad873af8cc" data-toc-id="cd3001f5-eec4-414d-8ad8-89ad873af8cc">Example Scenarios</h3><h4 id="95c195da-0494-4e56-81f3-b768a1f36f92" data-toc-id="95c195da-0494-4e56-81f3-b768a1f36f92">Long Position Example</h4>Setup:<ul><li>Asset: ADA</li><li>Entry Price: $0.50</li><li>Current Price: $0.60</li><li>Collateral Deposited: 1,000 ADA</li><li>Position Size: $2,000 (4,000 ADA equivalent at entry)</li></ul>Calculation:<ol><li>Collateral USD Value: 1,000 ADA × $0.50 = $500</li><li>PnL Calculation (Long):<ul><li>Current position value: 4,000 ADA × $0.60 = $2,400</li><li>Entry position value: 4,000 ADA × $0.50 = $2,000</li><li>PnL: $2,400 - $2,000 = +$400 profit</li></ul></li><li>Total USD Value: $500 (collateral) + $400 (PnL) = $900</li><li>Settlement Amount: $900 ÷ $0.60 = 1,500 ADA</li></ol><h4 id="840d14db-1038-4d94-96ed-fa1cb5a268f7" data-toc-id="840d14db-1038-4d94-96ed-fa1cb5a268f7">Short Position Example</h4>Setup:<ul><li>Asset: ADA</li><li>Entry Price: $0.50</li><li>Current Price: $0.60</li><li>Collateral Deposited: 1,000 ADA</li><li>Position Size: $2,000 (4,000 ADA equivalent at entry)</li></ul>Calculation:<ol><li>Collateral USD Value: 1,000 ADA × $0.50 = $500</li><li>PnL Calculation (Short):<ul><li>Entry position value: 4,000 ADA × $0.50 = $2,000</li><li>Current position value: 4,000 ADA × $0.60 = $2,400</li><li>PnL: $2,000 - $2,400 = -$400 loss</li></ul></li><li>Total USD Value: $500 (collateral) + (-$400) (PnL) = $100</li><li>Settlement Amount: $100 ÷ $0.60 = 166.67 ADA</li></ol><h3 id="1d439c02-ab97-47e4-9fcf-1dc7863d0dc3" data-toc-id="1d439c02-ab97-47e4-9fcf-1dc7863d0dc3">Key Points</h3><ul><li>Long positions profit when the asset price increases</li><li>Short positions profit when the asset price decreases</li><li>The settlement amount can be less than the original collateral if the position incurred losses</li><li>All calculations are performed in USD terms before converting back to the asset amount</li><li>The current market price is used for the final conversion to determine the actual token amount returned</li></ul>

Position Settlement

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC">On Strike, you get liquidated when your remaining collateral falls below the maintenance margin requirement as a percentage of your total position value.Important: When you get liquidated, you don't get any funds back - your entire initial collateral is forfeited. This means you lose both your unrealized losses from the position's negative performance and your entire original collateral deposit.<h3 id="4db594c5-13e4-45eb-ae14-5ef84df3b84a" data-toc-id="4db594c5-13e4-45eb-ae14-5ef84df3b84a">Position Example: ADA Liquidation</h3>Position Details:<ul><li>Underlying Asset: ADA</li><li>Position Size: 5,050 ADA</li><li>Entry Price: $0.5214</li><li>Current Price: $0.5502</li><li>Initial Collateral: $275</li><li>Total Position Value: 5,050 ADA × $0.5502 = $2,778.60</li></ul>Liquidation Calculation:<ol><li>Position P&amp;L: 5,050 ADA × ($0.5214 - $0.5502) = -$145.44</li><li>Remaining Collateral: $275 - $145.44 = $129.56</li><li>Margin Ratio: $129.56 ÷ $2,778.60 = 0.0467 = 4.67%</li><li>Result: 4.67% &lt; 5% Maintenance Margin Requirement → LIQUIDATION TRIGGERED</li></ol>Outcome: Position closed immediately, $0 returned to trader (total loss of $275 initial collateral).

Liquidation

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h2 id="01d8c856-76ee-4e30-b44f-ec390f2f3c33" data-toc-id="01d8c856-76ee-4e30-b44f-ec390f2f3c33">Rebalancing Position</h2>STRIKE employs rebalancing mechanism similar to f(X). To ensure a stable trading experience, when traders position falls beneath a certain threshold, their position is rebalanced to prevent liquidation. Their leverage will be automatically lowered and some borrowed funds will be sent back to the liquidity pool. This mechanism can be ran more than once on a single position, continously resizing the trader’s position when they fall beneath a certain threshold.Traders have the option to opt out of rebalancing if they choose to.<h4 id="6186cb2e-0c8e-458b-aa57-f4493c0a799a" data-toc-id="6186cb2e-0c8e-458b-aa57-f4493c0a799a">​Example</h4>Alice wants to trade Cardano (ADA) using leverage, which allows her to control a larger position than the amount she invests. She opens up a position with 5x leverage and 3k collateral. Giving her a total position size of 15k.<table style="min-width: 150px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1">ADA Price</td><td colspan="1" rowspan="1">Collateral (USD)</td><td colspan="1" rowspan="1">Position Size (USD)</td><td colspan="1" rowspan="1">Debt (USD)</td><td colspan="1" rowspan="1">PnL (USD)</td><td colspan="1" rowspan="1">LTV</td></tr><tr><td colspan="1" rowspan="1">$1.00</td><td colspan="1" rowspan="1">$3,000</td><td colspan="1" rowspan="1">$15,000</td><td colspan="1" rowspan="1">$12,000</td><td colspan="1" rowspan="1">$0</td><td colspan="1" rowspan="1">80%</td></tr></tbody></table>​Step 1: ADA Price DropsThe market changes, and ADA’s price falls by 10% to $0.90. Her position is losing value, and the debt is becoming riskier compared to what she owns. She now risks getting liquidated.<table style="min-width: 150px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1">ADA Price</td><td colspan="1" rowspan="1">Collateral (USD)</td><td colspan="1" rowspan="1">Position Size (USD)</td><td colspan="1" rowspan="1">Debt (USD)</td><td colspan="1" rowspan="1">PnL (USD)</td><td colspan="1" rowspan="1">LTV</td></tr><tr><td colspan="1" rowspan="1">$0.90</td><td colspan="1" rowspan="1">$1,500</td><td colspan="1" rowspan="1">$13,500</td><td colspan="1" rowspan="1">$12,000</td><td colspan="1" rowspan="1">-$1,500</td><td colspan="1" rowspan="1">88.89%</td></tr></tbody></table>​Step 2: Rebalancing to Stay SafeBecause the position value dropped, Alice’s debt is too high compared to her position. To avoid losing everything (liquidation), the system steps in to ‘rebalance’ her position by lowering her leverage.<table style="min-width: 150px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1">ADA Price</td><td colspan="1" rowspan="1">Equity (USD)</td><td colspan="1" rowspan="1">Position Size (USD)</td><td colspan="1" rowspan="1">Debt (USD)</td><td colspan="1" rowspan="1">PnL (USD)</td><td colspan="1" rowspan="1">LTV</td></tr><tr><td colspan="1" rowspan="1">$0.90</td><td colspan="1" rowspan="1">$1,500</td><td colspan="1" rowspan="1">$12,500</td><td colspan="1" rowspan="1">$11,000</td><td colspan="1" rowspan="1">-$1,500</td><td colspan="1" rowspan="1">88%</td></tr></tbody></table>​Step 3: Market RecoversNow, imagine ADA’s price goes back up to $1.00. Alice benefits from the price increase because she didn’t get liquidated.<table style="min-width: 150px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1">ADA Price</td><td colspan="1" rowspan="1">Collateral (USD)</td><td colspan="1" rowspan="1">Position Size (USD)</td><td colspan="1" rowspan="1">Debt (USD)</td><td colspan="1" rowspan="1">PnL (USD)</td><td colspan="1" rowspan="1">LTV</td></tr><tr><td colspan="1" rowspan="1">$1.00</td><td colspan="1" rowspan="1">$2,889</td><td colspan="1" rowspan="1">$13,889</td><td colspan="1" rowspan="1">$11,000</td><td colspan="1" rowspan="1">-$111</td><td colspan="1" rowspan="1">79.20%</td></tr></tbody></table><h4 id="165eead2-645a-4281-be87-b70b2885129a" data-toc-id="165eead2-645a-4281-be87-b70b2885129a">​Why Rebalancing Matters</h4>Rebalancing does not replace stop loss or adding more collateral. It is an automatic mechanism that prevents a trader’s position from being liquidated. Crypto assets are volatile, and there are always sudden large price movements. Rebalancing protects the trader’s downside when there are sudden movements not in their favor. When the price recovers, the trader will be able to recover some of their losses instead of being completely liquidated with no funds left.<h3 id="e43b09ad-163c-4b4b-b742-1444b6d59f82" data-toc-id="e43b09ad-163c-4b4b-b742-1444b6d59f82">​Cross Margin</h3>Cross-margin uses your entire account balance to act as collateral for all your trades at once. Instead of locking up separate money for each trade (isolated margin), all your funds work together to keep your positions open. If one trade is losing money but another is making money, they balance each other out. This lets you use your money more efficiently, but it also means if your total account value drops too much, all your positions could get liquidated at once rather than just individual losing trades.

Re-Balancing Position

Tutorial

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC">Market making is one of the most lucrative businesses in crypto, and Strike Finance decentralizes this opportunity, allowing anyone to become a market maker and earn profits. Anyone can provide liquidity on our platform and earn yield.<h3 id="4aeed576-c0a6-49fa-981b-27451f8bd399" data-toc-id="4aeed576-c0a6-49fa-981b-27451f8bd399">How It Works</h3>When someone opens a long position on Strike Finance, they are essentially borrowing funds from liquidity providers. For example, if a trader deposits 100 ADA as collateral and opens a 10x long position, their total position size becomes 1,000 ADA. They are effectively borrowing 900 ADA from the liquidity providers.<h3 id="be4d7bc3-3be2-47d4-91db-9bcd513bfac0" data-toc-id="be4d7bc3-3be2-47d4-91db-9bcd513bfac0">Full Asset Backing</h3>We back all positions 1:1 with the underlying assets. This means if there are 1,000,000 ADA worth of long positions on the platform, we maintain 1,000,000 ADA in the liquidity pool to support these positions.<h3 id="6f92f42c-2188-4a89-bce4-deb8c5cdf49b" data-toc-id="6f92f42c-2188-4a89-bce4-deb8c5cdf49b">Synthetic Trading Model</h3>Unlike traditional perpetuals exchanges, no assets are bought or sold on the market when someone opens a position. These are simply synthetic bets between liquidity providers and traders. As a result, large buy or short orders have no effect on market prices, and there is no slippage

Liquidity Provision

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h3 id="0ce9835a-0868-4d47-8c77-91b2a4c7c184" data-toc-id="0ce9835a-0868-4d47-8c77-91b2a4c7c184">Revenue Sources</h3>As a liquidity provider, you earn revenue from four primary sources:<ul><li>100% of liquidated collateral from positions that get liquidated</li><li>100% of trader losses when positions close at a loss</li><li>100% of hourly borrow fees paid by traders (calculated as a percentage of total position size, not just the borrowed amount)</li><li>Percentage of opening fees charged when traders open new positions (this percentage is configurable and may be adjusted in the future)</li></ul><h3 id="96fd7857-85f7-4d8d-ad75-46e5ceb77a4d" data-toc-id="96fd7857-85f7-4d8d-ad75-46e5ceb77a4d">How Liquidity Provision Works</h3>When you deposit assets as collateral, you receive LP tokens in return that represent your share of the pool. To withdraw your funds, you'll need to deposit these LP tokens back to the protocol.<h4 id="a0624266-072b-4f18-a526-38ed7721c57c" data-toc-id="a0624266-072b-4f18-a526-38ed7721c57c">Withdrawal Process</h4>You can withdraw your liquidity anytime when sufficient assets are available in the pool. However, there may be scenarios where all assets are currently lent out to traders, temporarily preventing withdrawals.If assets aren't immediately available for withdrawal, you can submit a withdrawal transaction. Your funds will be automatically sent to your wallet as soon as sufficient assets become available in the pool.<h3 id="13e534a2-dac8-4ab1-8da0-f44a305473f8" data-toc-id="13e534a2-dac8-4ab1-8da0-f44a305473f8">Automatic Compounding</h3>You begin earning profits immediately upon depositing liquidity. All earned profits are automatically redeployed into the protocol, increasing your potential returns through compound growth without requiring any additional action from you.

Liquidity Providers

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h3 id="99c6f091-82c5-4f2a-93b4-705fa0f8159f" data-toc-id="99c6f091-82c5-4f2a-93b4-705fa0f8159f">How the System Works</h3>Liquidity providers essentially take the opposite side of all trader positions. When traders profit, they withdraw funds from the liquidity pool, resulting in losses for liquidity providers. Conversely, when traders lose, liquidity providers gain.When a user provides liquidity to a pool, they receive LP tokens proportional to their contribution, representing their share of the pool. For instance, if a user contributes liquidity at a 1:1 ratio, they receive LP tokens reflecting that proportion.LP token value fluctuates based on pool dynamics. Liquidity providers earn rewards from hourly borrow fees, liquidations, and trader losses, which increase the value of LP tokens. also when traders close positions at a profit, liquidity providers incur losses, reducing the value of LP tokens.In the case where traders are on profit but haven't closed their position (this is an unrealized loss for the LPers) and for example LP token value still reflects the initial 1:1 conversion rate, a liquidity provider can decide to withdraw his own share of liquidity provided at the conversion rate of 1:!, unaffected by the unrealize losses.However, if traders close their positions in profit (Realized loss for LPers) causing the LP token value to decrease, the conversion rate adjusts accordingly. Any liquidity provider withdrawing at this point will realize the associated loss based on the updated conversion rate.<h3 id="a11e50cb-ee7c-4148-82de-2235daf952cd" data-toc-id="a11e50cb-ee7c-4148-82de-2235daf952cd">Long-Term Profitability</h3>Historical data from other perpetual trading platforms shows that traders collectively lose money over extended periods. While there may be short-term periods where traders are profitable, liquidity providers consistently come out ahead over the long term due to this fundamental market dynamic.<h3 id="3b8f7ddb-8e0f-477e-9e85-cc4df3ad250f" data-toc-id="3b8f7ddb-8e0f-477e-9e85-cc4df3ad250f">Fee Structure and Incentives</h3><h4 id="3d635a6a-f5a5-4a39-a8f7-96fd5ce3e810" data-toc-id="3d635a6a-f5a5-4a39-a8f7-96fd5ce3e810">Hourly Borrow Fee</h4>We implement an hourly borrow fee that functions similarly to funding rates on other platforms. Key features include:<ul><li>Dynamic rates: The fee adjusts based on the ratio of long vs. short positions, helping maintain market balance</li><li>Position prevention: This mechanism discourages traders from all taking the same side of a trade</li><li>Full position coverage: Unlike some platforms, our fee applies to the entire position size, not just the leveraged portion</li><li>Anti-coasting measure: Prevents traders from using minimal leverage to avoid fees while waiting for profitable opportunities</li></ul><h4 id="13fc66e5-14f4-4be8-82b9-1f2daf7ad039" data-toc-id="13fc66e5-14f4-4be8-82b9-1f2daf7ad039">Balanced Incentive System</h4>The fee structure dynamically balances the market by:<ul><li>Increasing costs for the overrepresented side (long or short)</li><li>Making the underrepresented side more attractive</li><li>Ensuring continuous revenue flow to liquidity providers</li></ul><h3 id="0254c2de-e3a8-4ee2-9740-67f1dd21de35" data-toc-id="0254c2de-e3a8-4ee2-9740-67f1dd21de35">Risk Considerations</h3>While the system is designed to favor liquidity providers over time, short-term volatility can occur. During periods of strong directional market movements, traders may temporarily profit at the expense of the liquidity pool. If a user provided LP today, and a trader closes a position in profit today, but that position was opened yesterday when this user haven’t provided LP yet, this user will incur that loss too.

Risk Management

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC">Any CNTs can be supported on our platform as long as someone is willing to provide the liquidity for them, regardless of the market cap or volume of the CNTs. Projects looking to list their tokens on our platform can contact us directly via X or Discord. Projects must understand that providing liquidity is not risk-free, especially with low market cap coins. These coins can be easily manipulated, and projects that provide liquidity for their own tokens might suffer large losses.

Partnerships

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC">The following lessons has information about the parameters of each contract. It contains things such as max leverage, max positions, and fees. Please note these can be updated through a governance vote and are not final. Each asset has different parameters based on the volatility of the asset and current status of the pool. There are two kinds of fees traders pay when opening a position. An opening fee which is based on total position size, and an hourly borrow fee. The hourly borrow fee is based on market imbalance. We calculate dominance% (the higher of Long% or Short%) and apply an exponential curve so the fee starts low in a balanced market and increases progressively as imbalance grows. Both Long and Short pay the same rate. This is to help liquidity providers mitigate risks when positions are one sided.If pool utilization exceeds 90%, the fee increases by 25%.APR is calculated by multiplying the hourly rate by 24 hours × 365 days.

Parameters

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h1 id="6c5e3240-c5e7-4980-9568-6f0acf7d75f7" data-toc-id="6c5e3240-c5e7-4980-9568-6f0acf7d75f7">ADA Parameters</h1><table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Fee/Threshold Type</td><td colspan="1" rowspan="1">Value/Description</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Opening Fee</td><td colspan="1" rowspan="1">0.35% of total position size (Note: Additional fees may apply based on pool utilization and position ratio)</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Hourly Borrow Interest Rate</td><td colspan="1" rowspan="1">0.0025% per hour</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Liquidation</td><td colspan="1" rowspan="1">97% LTV (3% maintance margin</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Max Position Size</td><td colspan="1" rowspan="1">$100,000</td></tr></tbody></table><h3 id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc" data-toc-id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc">Dynamic Fees Based On Directional Imbalance</h3>Directional imbalance measures the percentage skew between long and short positions (e.g., 60% long / 40% short = 60% imbalance). Hourly borrow fee and opening fee increases as the imbalance gets higher.<h3 id="680ea5c5-1757-413a-9a4d-b6a78dc99c2b" data-toc-id="680ea5c5-1757-413a-9a4d-b6a78dc99c2b">Opening Fee Utilization Parameters</h3>Note: LPs take roughly ~50% of opening fee and Strike stakers take roughly ~50%<table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Directional Imbalance</td><td colspan="1" rowspan="1">Opening Fee</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;60%</td><td colspan="1" rowspan="1">0.500% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;65%</td><td colspan="1" rowspan="1">0.550% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;70%</td><td colspan="1" rowspan="1">0.575% of total position size</td></tr><tr><th colspan="1" rowspan="1" colwidth="464">&gt;75%</th><th colspan="1" rowspan="1">0.575% of total position size</th></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;80%</td><td colspan="1" rowspan="1">0.625% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;85%</td><td colspan="1" rowspan="1">0.650% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;90%</td><td colspan="1" rowspan="1">0.675% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;95%</td><td colspan="1" rowspan="1">0.700% of total position size</td></tr></tbody></table><h3 id="6e5583f5-3592-41e5-92f7-b2b13a6cf3f9" data-toc-id="6e5583f5-3592-41e5-92f7-b2b13a6cf3f9">Hourly Borrow Fee Parameters</h3><h4 id="d511ef43-8a86-4c42-8fa3-59cfbad7065f" data-toc-id="d511ef43-8a86-4c42-8fa3-59cfbad7065f">Base Hourly Borrow Fee (Based on Directional Imbalance)</h4>The dominant side will have the hourly borrow fee specified here. The non dominate side will have a base hourly fee of 0.0025%.<table style="min-width: 125px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><th colspan="1" rowspan="1">Dominance</th><th colspan="1" rowspan="1">Hourly Fee</th><th colspan="1" rowspan="1">APR</th><th colspan="1" rowspan="1">Hourly Fee @ Utilization &gt;90%</th><th colspan="1" rowspan="1">APR @ Utilization &gt;90%</th></tr><tr><td colspan="1" rowspan="1">50%</td><td colspan="1" rowspan="1">0.00781%</td><td colspan="1" rowspan="1">68.44%</td><td colspan="1" rowspan="1">0.00977%</td><td colspan="1" rowspan="1">85.55%</td></tr><tr><td colspan="1" rowspan="1">60%</td><td colspan="1" rowspan="1">0.01333%</td><td colspan="1" rowspan="1">116.78%</td><td colspan="1" rowspan="1">0.01666%</td><td colspan="1" rowspan="1">145.98%</td></tr><tr><td colspan="1" rowspan="1">70%</td><td colspan="1" rowspan="1">0.01924%</td><td colspan="1" rowspan="1">168.53%</td><td colspan="1" rowspan="1">0.02405%</td><td colspan="1" rowspan="1">210.68%</td></tr><tr><td colspan="1" rowspan="1">75%</td><td colspan="1" rowspan="1">0.02176%</td><td colspan="1" rowspan="1">190.64%</td><td colspan="1" rowspan="1">0.02720%</td><td colspan="1" rowspan="1">238.30%</td></tr><tr><td colspan="1" rowspan="1">80%</td><td colspan="1" rowspan="1">0.02382%</td><td colspan="1" rowspan="1">208.67%</td><td colspan="1" rowspan="1">0.02978%</td><td colspan="1" rowspan="1">260.87%</td></tr><tr><td colspan="1" rowspan="1">85%</td><td colspan="1" rowspan="1">0.02541%</td><td colspan="1" rowspan="1">222.62%</td><td colspan="1" rowspan="1">0.03177%</td><td colspan="1" rowspan="1">278.27%</td></tr><tr><td colspan="1" rowspan="1">90%</td><td colspan="1" rowspan="1">0.02657%</td><td colspan="1" rowspan="1">232.79%</td><td colspan="1" rowspan="1">0.03322%</td><td colspan="1" rowspan="1">291.03%</td></tr><tr><td colspan="1" rowspan="1">95%</td><td colspan="1" rowspan="1">0.02740%</td><td colspan="1" rowspan="1">240.07%</td><td colspan="1" rowspan="1">0.03426%</td><td colspan="1" rowspan="1">300.10%</td></tr><tr><td colspan="1" rowspan="1">98%</td><td colspan="1" rowspan="1">0.02778%</td><td colspan="1" rowspan="1">243.33%</td><td colspan="1" rowspan="1">0.03472%</td><td colspan="1" rowspan="1">304.17%</td></tr></tbody></table><h4 id="e0f8b72b-9c23-4252-99d8-d9962fa99426" data-toc-id="e0f8b72b-9c23-4252-99d8-d9962fa99426">Pool Utilization Multiplier</h4><ul><li>Pool utilization ≤90%: 1.0x (no multiplier)</li><li>Pool utilization &gt;90%: 1.25x (25% increase)</li></ul>

ADA Parameters

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Fee/Threshold Type</td><td colspan="1" rowspan="1">Value/Description</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Opening Fee</td><td colspan="1" rowspan="1">0.35% of total position size (Note: Additional fees may apply based on pool utilization and position ratio)</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Hourly Borrow Interest Rate</td><td colspan="1" rowspan="1">0.0025% per hour</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Liquidation</td><td colspan="1" rowspan="1">97% LTV (3% maintance margin</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Max Position Size</td><td colspan="1" rowspan="1">$50,000</td></tr></tbody></table><h3 id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc" data-toc-id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc">BTC is not native on Cardano. This is a wrapped version by Wanchain. <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.wanchain.org/">https://www.wanchain.org/</a>.</h3><h3 id="8ce914d0-c6f9-4d93-a48f-c66cddfb6907" data-toc-id="8ce914d0-c6f9-4d93-a48f-c66cddfb6907">Dynamic Fees Based On Directional Imbalance</h3>Directional imbalance measures the percentage skew between long and short positions (e.g., 60% long / 40% short = 60% imbalance). Hourly borrow fee and opening fee increases as the imbalance gets higher.<h3 id="9c7619ef-1828-4ac6-bace-7846c3316b8a" data-toc-id="9c7619ef-1828-4ac6-bace-7846c3316b8a">Opening Fee Utilization Parameters</h3>Note: LPs take roughly ~50% of opening fee and Strike stakers take roughly ~50%Note: LPs take roughly ~50% of opening fee and Strike stakers take roughly ~50%<table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Directional Imbalance</td><td colspan="1" rowspan="1">Opening Fee</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;60%</td><td colspan="1" rowspan="1">0.500% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;65%</td><td colspan="1" rowspan="1">0.550% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;70%</td><td colspan="1" rowspan="1">0.575% of total position size</td></tr><tr><th colspan="1" rowspan="1" colwidth="464">&gt;75%</th><th colspan="1" rowspan="1">0.575% of total position size</th></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;80%</td><td colspan="1" rowspan="1">0.625% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;85%</td><td colspan="1" rowspan="1">0.650% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;90%</td><td colspan="1" rowspan="1">0.675% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;95%</td><td colspan="1" rowspan="1">0.700% of total position size</td></tr></tbody></table><h3 id="480fd5fc-02ce-4fae-819e-749cf37c0f19" data-toc-id="480fd5fc-02ce-4fae-819e-749cf37c0f19">Hourly Borrow Fee Parameters</h3><h4 id="6acdd85e-a046-488e-a5ac-3012285ab856" data-toc-id="6acdd85e-a046-488e-a5ac-3012285ab856">Base Hourly Borrow Fee (Based on Directional Imbalance)</h4>The dominant side will have the hourly borrow fee specified here. The non dominate side will have a base hourly fee of 0.0025%.<table style="min-width: 125px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><th colspan="1" rowspan="1">Dominance</th><th colspan="1" rowspan="1">Hourly Fee</th><th colspan="1" rowspan="1">APR</th><th colspan="1" rowspan="1">Hourly Fee @ Utilization &gt;90%</th><th colspan="1" rowspan="1">APR @ Utilization &gt;90%</th></tr><tr><td colspan="1" rowspan="1">50%</td><td colspan="1" rowspan="1">0.00781%</td><td colspan="1" rowspan="1">68.44%</td><td colspan="1" rowspan="1">0.00977%</td><td colspan="1" rowspan="1">85.55%</td></tr><tr><td colspan="1" rowspan="1">60%</td><td colspan="1" rowspan="1">0.01333%</td><td colspan="1" rowspan="1">116.78%</td><td colspan="1" rowspan="1">0.01666%</td><td colspan="1" rowspan="1">145.98%</td></tr><tr><td colspan="1" rowspan="1">70%</td><td colspan="1" rowspan="1">0.01924%</td><td colspan="1" rowspan="1">168.53%</td><td colspan="1" rowspan="1">0.02405%</td><td colspan="1" rowspan="1">210.68%</td></tr><tr><td colspan="1" rowspan="1">75%</td><td colspan="1" rowspan="1">0.02176%</td><td colspan="1" rowspan="1">190.64%</td><td colspan="1" rowspan="1">0.02720%</td><td colspan="1" rowspan="1">238.30%</td></tr><tr><td colspan="1" rowspan="1">80%</td><td colspan="1" rowspan="1">0.02382%</td><td colspan="1" rowspan="1">208.67%</td><td colspan="1" rowspan="1">0.02978%</td><td colspan="1" rowspan="1">260.87%</td></tr><tr><td colspan="1" rowspan="1">85%</td><td colspan="1" rowspan="1">0.02541%</td><td colspan="1" rowspan="1">222.62%</td><td colspan="1" rowspan="1">0.03177%</td><td colspan="1" rowspan="1">278.27%</td></tr><tr><td colspan="1" rowspan="1">90%</td><td colspan="1" rowspan="1">0.02657%</td><td colspan="1" rowspan="1">232.79%</td><td colspan="1" rowspan="1">0.03322%</td><td colspan="1" rowspan="1">291.03%</td></tr><tr><td colspan="1" rowspan="1">95%</td><td colspan="1" rowspan="1">0.02740%</td><td colspan="1" rowspan="1">240.07%</td><td colspan="1" rowspan="1">0.03426%</td><td colspan="1" rowspan="1">300.10%</td></tr><tr><td colspan="1" rowspan="1">98%</td><td colspan="1" rowspan="1">0.02778%</td><td colspan="1" rowspan="1">243.33%</td><td colspan="1" rowspan="1">0.03472%</td><td colspan="1" rowspan="1">304.17%</td></tr></tbody></table>

BTC Parameters

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Fee/Threshold Type</td><td colspan="1" rowspan="1">Value/Description</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Opening Fee</td><td colspan="1" rowspan="1">0.35% of total position size (Note: Additional fees may apply based on pool utilization and position ratio)</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Hourly Borrow Interest Rate</td><td colspan="1" rowspan="1">0.0025% per hour</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Liquidation</td><td colspan="1" rowspan="1">95% LTV (5% maintenance margin)</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Max Position Size</td><td colspan="1" rowspan="1">$20,000</td></tr></tbody></table><h3 id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc" data-toc-id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc">Dynamic Fees Based On Directional Imbalance</h3>Directional imbalance measures the percentage skew between long and short positions (e.g., 60% long / 40% short = 60% imbalance). Hourly borrow fee and opening fee increases as the imbalance gets higher.<h3 id="e9ab3fdf-3f80-4dc9-a2da-79edec423b72" data-toc-id="e9ab3fdf-3f80-4dc9-a2da-79edec423b72">Opening Fee Utilization Parameters</h3>Note: LPs take roughly ~50% of opening fee and Strike stakers take roughly ~50%. The opening fee that LPs take will all be in ADA, while the rest is in ADA, paid to Strike.<table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Directional Imbalance</td><td colspan="1" rowspan="1">Opening Fee</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;60%</td><td colspan="1" rowspan="1">0.500% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;65%</td><td colspan="1" rowspan="1">0.550% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;70%</td><td colspan="1" rowspan="1">0.575% of total position size</td></tr><tr><th colspan="1" rowspan="1" colwidth="464">&gt;75%</th><th colspan="1" rowspan="1">0.575% of total position size</th></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;80%</td><td colspan="1" rowspan="1">0.625% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;85%</td><td colspan="1" rowspan="1">0.650% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;90%</td><td colspan="1" rowspan="1">0.675% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;95%</td><td colspan="1" rowspan="1">0.700% of total position size</td></tr></tbody></table><h3 id="480fd5fc-02ce-4fae-819e-749cf37c0f19" data-toc-id="480fd5fc-02ce-4fae-819e-749cf37c0f19">Hourly Borrow Fee Parameters</h3><h4 id="d77feef2-d5c3-41a3-9e6b-fc4e2cfcf174" data-toc-id="d77feef2-d5c3-41a3-9e6b-fc4e2cfcf174">Base Hourly Borrow Fee (Based on Directional Imbalance)</h4>The dominant side will have the hourly borrow fee specified here. The non dominate side will have a base hourly fee of 0.00313%.<table style="min-width: 286px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="width: 186px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><th colspan="1" rowspan="1">Dominance</th><th colspan="1" rowspan="1">Hourly Fee</th><th colspan="1" rowspan="1" colwidth="186">APR</th><th colspan="1" rowspan="1">Hourly Fee @ Utilization &gt;90%</th><th colspan="1" rowspan="1">APR @ Utilization &gt;90%</th></tr><tr><td colspan="1" rowspan="1">50%</td><td colspan="1" rowspan="1">0.00781%</td><td colspan="1" rowspan="1" colwidth="186">68.44%</td><td colspan="1" rowspan="1">0.00977%</td><td colspan="1" rowspan="1">85.55%</td></tr><tr><td colspan="1" rowspan="1">60%</td><td colspan="1" rowspan="1">0.01502%</td><td colspan="1" rowspan="1" colwidth="186">131.51%</td><td colspan="1" rowspan="1">0.01877%</td><td colspan="1" rowspan="1">164.39%</td></tr><tr><td colspan="1" rowspan="1">70%</td><td colspan="1" rowspan="1">0.02315%</td><td colspan="1" rowspan="1" colwidth="186">202.97%</td><td colspan="1" rowspan="1">0.02893%</td><td colspan="1" rowspan="1">253.72%</td></tr><tr><td colspan="1" rowspan="1">75%</td><td colspan="1" rowspan="1">0.02694%</td><td colspan="1" rowspan="1" colwidth="186">236.01%</td><td colspan="1" rowspan="1">0.03368%</td><td colspan="1" rowspan="1">294.97%</td></tr><tr><td colspan="1" rowspan="1">80%</td><td colspan="1" rowspan="1">0.02996%</td><td colspan="1" rowspan="1" colwidth="186">262.87%</td><td colspan="1" rowspan="1">0.03745%</td><td colspan="1" rowspan="1">328.61%</td></tr><tr><td colspan="1" rowspan="1">85%</td><td colspan="1" rowspan="1">0.03243%</td><td colspan="1" rowspan="1" colwidth="186">284.99%</td><td colspan="1" rowspan="1">0.04054%</td><td colspan="1" rowspan="1">356.23%</td></tr><tr><td colspan="1" rowspan="1">90%</td><td colspan="1" rowspan="1">0.03436%</td><td colspan="1" rowspan="1" colwidth="186">301.05%</td><td colspan="1" rowspan="1">0.04295%</td><td colspan="1" rowspan="1">375.99%</td></tr><tr><td colspan="1" rowspan="1">95%</td><td colspan="1" rowspan="1">0.03587%</td><td colspan="1" rowspan="1" colwidth="186">314.92%</td><td colspan="1" rowspan="1">0.04483%</td><td colspan="1" rowspan="1">393.64%</td></tr><tr><td colspan="1" rowspan="1">98%</td><td colspan="1" rowspan="1">0.03660%</td><td colspan="1" rowspan="1" colwidth="186">321.54%</td><td colspan="1" rowspan="1">0.04575%</td><td colspan="1" rowspan="1">401.93%</td></tr></tbody></table><h4 id="8d679232-88ed-45bc-8e67-3a3f63f1dc30" data-toc-id="8d679232-88ed-45bc-8e67-3a3f63f1dc30">Pool Utilization Multiplier</h4><ul><li>Pool utilization ≤90%: 1.0x (no multiplier)</li><li>Pool utilization &gt;90</li></ul><h4 id="357b5807-6988-46c6-b6a3-391df751a263" data-toc-id="357b5807-6988-46c6-b6a3-391df751a263">Pool Utilization Multiplier</h4><ul><li>Pool utilization ≤90%: 1.0x (no multiplier)</li><li>Pool utilization &gt;90%: 1.25x (25% increase)</li></ul>

SNEK Parameters

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Fee/Threshold Type</td><td colspan="1" rowspan="1">Value/Description</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Opening Fee</td><td colspan="1" rowspan="1">0.35% of total position size (Note: Additional fees may apply based on pool utilization and position ratio)</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Hourly Borrow Interest Rate</td><td colspan="1" rowspan="1">0.0025% per hour</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Liquidation</td><td colspan="1" rowspan="1">95% LTV (5% maintenance margin)</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">Max Position Size</td><td colspan="1" rowspan="1">$20,000</td></tr></tbody></table><h3 id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc" data-toc-id="ddd5bdcb-3b0e-4682-9a04-f72872dfefcc">Dynamic Fees Based On Directional Imbalance</h3>Directional imbalance measures the percentage skew between long and short positions (e.g., 60% long / 40% short = 60% imbalance). Hourly borrow fee and opening fee increases as the imbalance gets higher.<h3 id="e9ab3fdf-3f80-4dc9-a2da-79edec423b72" data-toc-id="e9ab3fdf-3f80-4dc9-a2da-79edec423b72">Opening Fee Utilization Parameters</h3>Note: LPs take roughly ~50% of opening fee and Strike stakers take roughly ~50%. The opening fee that LPs take will all be in ADA, while the rest is in ADA, paid to Strike.<table style="min-width: 489px;"><colgroup><col style="width: 464px;"><col style="min-width: 25px;"></colgroup><tbody><tr><td colspan="1" rowspan="1" colwidth="464">Directional Imbalance</td><td colspan="1" rowspan="1">Opening Fee</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;60%</td><td colspan="1" rowspan="1">0.500% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;65%</td><td colspan="1" rowspan="1">0.550% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;70%</td><td colspan="1" rowspan="1">0.575% of total position size</td></tr><tr><th colspan="1" rowspan="1" colwidth="464">&gt;75%</th><th colspan="1" rowspan="1">0.575% of total position size</th></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;80%</td><td colspan="1" rowspan="1">0.625% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;85%</td><td colspan="1" rowspan="1">0.650% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;90%</td><td colspan="1" rowspan="1">0.675% of total position size</td></tr><tr><td colspan="1" rowspan="1" colwidth="464">&gt;95%</td><td colspan="1" rowspan="1">0.700% of total position size</td></tr></tbody></table><h3 id="480fd5fc-02ce-4fae-819e-749cf37c0f19" data-toc-id="480fd5fc-02ce-4fae-819e-749cf37c0f19">Hourly Borrow Fee Parameters</h3><h4 id="d77feef2-d5c3-41a3-9e6b-fc4e2cfcf174" data-toc-id="d77feef2-d5c3-41a3-9e6b-fc4e2cfcf174">Base Hourly Borrow Fee (Based on Directional Imbalance)</h4>The dominant side will have the hourly borrow fee specified here. The non dominate side will have a base hourly fee of 0.00313%.<table style="min-width: 291px;"><colgroup><col style="min-width: 25px;"><col style="min-width: 25px;"><col style="width: 191px;"><col style="min-width: 25px;"><col style="min-width: 25px;"></colgroup><tbody><tr><th colspan="1" rowspan="1">Dominance</th><th colspan="1" rowspan="1">Hourly Fee</th><th colspan="1" rowspan="1" colwidth="191">APR</th><th colspan="1" rowspan="1">Hourly Fee @ Utilization &gt;90%</th><th colspan="1" rowspan="1">APR @ Utilization &gt;90%</th></tr><tr><td colspan="1" rowspan="1">50%</td><td colspan="1" rowspan="1">0.00781%</td><td colspan="1" rowspan="1" colwidth="191">68.44%</td><td colspan="1" rowspan="1">0.00977%</td><td colspan="1" rowspan="1">85.55%</td></tr><tr><td colspan="1" rowspan="1">60%</td><td colspan="1" rowspan="1">0.01502%</td><td colspan="1" rowspan="1" colwidth="191">131.51%</td><td colspan="1" rowspan="1">0.01877%</td><td colspan="1" rowspan="1">164.39%</td></tr><tr><td colspan="1" rowspan="1">70%</td><td colspan="1" rowspan="1">0.02315%</td><td colspan="1" rowspan="1" colwidth="191">202.97%</td><td colspan="1" rowspan="1">0.02893%</td><td colspan="1" rowspan="1">253.72%</td></tr><tr><td colspan="1" rowspan="1">75%</td><td colspan="1" rowspan="1">0.02694%</td><td colspan="1" rowspan="1" colwidth="191">236.01%</td><td colspan="1" rowspan="1">0.03368%</td><td colspan="1" rowspan="1">294.97%</td></tr><tr><td colspan="1" rowspan="1">80%</td><td colspan="1" rowspan="1">0.02996%</td><td colspan="1" rowspan="1" colwidth="191">262.87%</td><td colspan="1" rowspan="1">0.03745%</td><td colspan="1" rowspan="1">328.61%</td></tr><tr><td colspan="1" rowspan="1">85%</td><td colspan="1" rowspan="1">0.03243%</td><td colspan="1" rowspan="1" colwidth="191">284.99%</td><td colspan="1" rowspan="1">0.04054%</td><td colspan="1" rowspan="1">356.23%</td></tr><tr><td colspan="1" rowspan="1">90%</td><td colspan="1" rowspan="1">0.03436%</td><td colspan="1" rowspan="1" colwidth="191">301.05%</td><td colspan="1" rowspan="1">0.04295%</td><td colspan="1" rowspan="1">375.99%</td></tr><tr><td colspan="1" rowspan="1">95%</td><td colspan="1" rowspan="1">0.03587%</td><td colspan="1" rowspan="1" colwidth="191">314.92%</td><td colspan="1" rowspan="1">0.04483%</td><td colspan="1" rowspan="1">393.64%</td></tr><tr><td colspan="1" rowspan="1">98%</td><td colspan="1" rowspan="1">0.03660%</td><td colspan="1" rowspan="1" colwidth="191">321.54%</td><td colspan="1" rowspan="1">0.04575%</td><td colspan="1" rowspan="1">401.93%</td></tr></tbody></table><h4 id="8d679232-88ed-45bc-8e67-3a3f63f1dc30" data-toc-id="8d679232-88ed-45bc-8e67-3a3f63f1dc30">Pool Utilization Multiplier</h4><ul><li>Pool utilization ≤90%: 1.0x (no multiplier)</li><li>Pool utilization &gt;90</li></ul><h4 id="357b5807-6988-46c6-b6a3-391df751a263" data-toc-id="357b5807-6988-46c6-b6a3-391df751a263">Pool Utilization Multiplier</h4><ul><li>Pool utilization ≤90%: 1.0x (no multiplier)</li><li>Pool utilization &gt;90%: 1.25x (25% increase)</li></ul>

WMTX Parameters

IAG Parameters

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h2 id="1caf94ab-015e-475e-a303-a5a709404d49" data-toc-id="1caf94ab-015e-475e-a303-a5a709404d49">STRIKE Utility</h2>The Strike Token (STRIKE) offers a range of utilities within the Strike Finance ecosystem, making it a vital component for users. The key utilities of STRIKE include:<ol><li>Collateral: STRIKE can be used as an additional form of collateral in our forwards and perpetual futures contracts. Using STRIKE as additional collateral offers benefits such as discounted fees and access to higher leverage in perpetual futures contracts. In the event of liquidation, any STRIKE used as collateral will be burned.</li><li>Staking: STRIKE holders can stake their tokens and earn a percentage of protocol fees.</li><li>Governance: STRIKE holders can participate in the protocol’s governance, voting on important decisions such as upgrades, new feature implementations, and changes to fee structures.</li><li>Trading Fees: Holders of STRIKE will have discounted trading fees for using the platform. The discounted fee for STRIKE holders can be stacked on top of the discounted fee when using STRIKE as additional collateral.</li></ol>

STRIKE Utility

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h3 id="bebbc25e-163b-4839-85da-c46b23acc346" data-toc-id="bebbc25e-163b-4839-85da-c46b23acc346">Distribution</h3>STRIKE is the platform token for the Strike Finance protocol. There are a total of 25 million (25,000,000) STRIKE tokens. The allocation for STRIKE is detailed below from largest to smallest:<ul><li>Public Sale: 60% (15,000,000 tokens)</li><li>Team and Advisors: 15% (3,750,000 tokens)</li><li>Liquidity: 12% (3,000,000 tokens)</li><li>DAO: 13% (3,250,000 tokens)</li></ul>The total public allocation is 85%, with 15% for team and advisors.The distribution is as follows:<img src="https://docs.strikefinance.org/~gitbook/image?url=https%3A%2F%2F3104501468-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252Fl6nT3DjbRRXrBD1ATav2%252Fuploads%252FoBDcotmp8gcZNZ7mIZrS%252FScreen%2520Shot%25202025-06-02%2520at%25205.17.36%2520PM.png%3Falt%3Dmedia%26token%3D19c927de-346a-4d2e-837c-842abab88085&amp;width=768&amp;dpr=4&amp;quality=100&amp;sign=e4a53d65&amp;sv=2"><h3 id="c5c7ba2d-8a47-479e-abdc-9f3fe898a3c0" data-toc-id="c5c7ba2d-8a47-479e-abdc-9f3fe898a3c0">Emissions</h3>Emissions will be simple and concise. There will be 72% of tokens initially in circulation (public + liquidity). The additional 15% from team allocation will be fully unlocked after 30 months (full details below) for a circulating supply of 87%, and the final 13% (DAO treasury) will be decided by community members at a later time.<h3 id="e8f7c1b2-5e97-462a-9571-949fa057ec95" data-toc-id="e8f7c1b2-5e97-462a-9571-949fa057ec95">​Vesting</h3>DAO vesting will be entirely up to the voting of STRIKE holders. This can be used for anything the community sees fit such as incentives, initiatives, funding future development, etc.Team vesting is simple. Starting from the token generation event, there is a 6 month period where there are no unlocked tokens. After that, tokens will unlock linearly monthly over the span of 24 months (2 years).

Distribution & Emissions

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC">Stake $STRIKE to earn the revenue generated by the Strike platform. The main revenue source for Strike are the opening fees from opening perpetual positions. The opening fees are split amongst Strike and liquidity providers, the split may change. 100% of the opening fees that goes to Strike is distributed to stakers once every 3 epochs. You can stake on our platform here: <a target="_blank" rel="noopener noreferrer nofollow" href="https://app.strikefinance.org/staking">https://app.strikefinance.org/staking</a>To qualify for rewards, you must keep your $STRIKE staked for the entire duration of all 3 epochs. Any $STRIKE that is unstaked prior to distribution would not qualify for rewards. Staked $STRIKE and rewards can be withdrawn at any time, there is no locking.Staked $STRIKE are locked in a non-custodial contract. The contract is open-sourced here: <a target="_blank" rel="noopener noreferrer nofollow" href="https://github.com/strike-finance/staking-smart-contracts">https://github.com/strike-finance/staking-smart-contracts</a>

Platform Staking

Tokenomics

<img src="https://res.cloudinary.com/djcg0daie/image/upload/v1759403628/zjapk/Gy-E3hpXsAAUQYC.jpg" alt="Gy-E3hpXsAAUQYC" title="Gy-E3hpXsAAUQYC"><h2 id="6f7c47ca-8142-4dba-a8ec-5029b9f926bd" data-toc-id="6f7c47ca-8142-4dba-a8ec-5029b9f926bd">Congratulations, Trader! </h2>You've reached the end of this course, and what an incredible journey it's been! You've gained the knowledge and skills needed to navigate the exciting world of decentralized derivatives trading on Strike Finance.<h2 id="b1f95b12-6b00-4748-9bbb-7c724459c807" data-toc-id="b1f95b12-6b00-4748-9bbb-7c724459c807">What You've Mastered</h2>Throughout this course, you've learned about:The Strike Finance Vision You now understand how Strike Finance is pioneering decentralized derivatives trading on Cardano, offering a transparent, secure, and user-friendly platform that's accessible to everyone with a wallet.Three Powerful Trading Instruments<ul><li>Options Contracts – The right, but not the obligation, to buy or sell assets at predetermined prices, perfect for hedging and strategic trading</li><li>Forwards Contracts – Customizable agreements that lock in future prices, providing certainty and protection against market volatility</li><li>Perpetual Futures – Unlimited-duration positions that allow you to profit in both rising and falling markets with the power of leverage</li></ul>Risk Management &amp; Strategy You've learned how to use these instruments not just for speculation, but to protect your portfolio, hedge against losses, and capitalize on market opportunities with calculated precision.<h2 id="0107481d-0f3f-4990-acfd-965f283991f1" data-toc-id="0107481d-0f3f-4990-acfd-965f283991f1">The Road Ahead</h2>As Strike Finance continues to grow and evolve, you're now positioned at the forefront of DeFi innovation on Cardano. Remember:<ul><li>Start Small, Think Big – Apply what you've learned gradually, building confidence with each trade</li><li>Manage Your Risk – Always use proper risk management, especially when utilizing leverage</li><li>Stay Engaged – The DeFi landscape is always evolving; keep learning and adapting</li><li>Join the Community – You're now part of a movement, join us on Discord: <a target="_blank" rel="noopener noreferrer nofollow" href="https://discord.com/invite/SjH4NDeEGq">https://discord.com/invite/SjH4NDeEGq</a></li></ul><h2 id="01ff54ba-acec-4f3e-92a5-d736043d44f7" data-toc-id="01ff54ba-acec-4f3e-92a5-d736043d44f7">Your New Beginning</h2>This isn't just the end of a course, it's the beginning of your journey as an informed trader on Strike Finance. You now have the tools, knowledge, and understanding to navigate the derivatives markets with confidence.The Strike Finance platform was built with traders like you in mind: accessible, transparent, and powerful. Whether you're hedging your portfolio, speculating on price movements, or exploring new trading strategies, you're ready.Thank you for your dedication and commitment to learning. We're excited to see you put these skills into action and become part of the Strike Finance community.Here's to your success in the dynamic world of decentralized derivatives trading!Welcome to Strike Finance. Your future starts now. 🚀

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This Comprehensive Course covers Strike Finance, a Perpetuals Trading Platform on the Cardano blockchain.

Strike Finance: Deep Dive

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