Perpetual Futures

Leverage your trading with Deriverse's perpetual futures, featuring isolated margin, autonomous funding, and up to 10x leverage.

Overview

Perpetual futures allow you to trade with leverage without worrying about expiry dates. Each position is independently collateralized using an isolated margin model, providing predictable risk management and preventing cross-asset contagion.

Key Features

Isolated Margin System

  • Each position collateralized independently

  • Risk confined to allocated capital

  • No cross-asset contamination

  • Simplified collateral management

Built-in Leverage

  • Up to 10x leverage available

  • No external funding required

  • Internal settlement token system

  • Automatic liquidation protection

Autonomous Operation

  • No administrative intervention

  • Algorithmic funding rate calculation

  • Automatic margin monitoring

  • Self-contained risk management

How Perpetual Futures Work

Position Mechanics

When you open a perpetual futures position:

  1. Deposit Collateral: Fund your position with USDC

  2. Select Leverage: Choose leverage up to 10x

  3. Trade Exposure: Gain exposure to underlying asset price movements

  4. Manage Risk: Monitor funding rates and funding payments

Leverage Example

Opening a Position:

  • Deposit: $1,000 USDC collateral

  • Leverage: 5x

  • Exposure: $5,000 worth of underlying asset

  • Funding Requirement: 20% (1/5x)

Profit/Loss Calculation:

  • Asset price increases 10%

  • Position value: $5,500 ($5,000 + $500)

  • Your profit: $500 (50% return on $1,000 collateral)

Funding Mechanism

Funding Rate Index (FRI)

Deriverse uses an innovative funding system to keep perpetual prices aligned with spot markets:

FRI = FRI + ((current_time - last_update) / 86400) × (P_perp - P_asset)

Components:

  • FRI: Current Funding Rate Index

  • P_perp: Perpetual futures price

  • P_asset: Spot/oracle price of underlying asset

  • 86400: Seconds in one day

Funding Payments

Funding payments are calculated for each trader based on their position:

Funding Payment = -Q_perp × (FRI - LFR)

Components:

  • Q_perp: Position size (positive for long, negative for short)

  • FRI: Current Funding Rate Index

  • LFR: Last Funding Rate recorded for the trader

Payment Direction:

  • Negative value: Trader pays funding

  • Positive value: Trader receives funding

Automatic Updates

Funding rates update automatically through a chained processing system:

  1. Trigger Events: Any active operation on perpetual instrument

  2. Active Client: Trader initiating the operation gets updated first

  3. Queue Processing: Next 25 clients in queue get updated

  4. Time-Based: Clients updated if >300 seconds since last update

Margin Management

Position Evaluation

Your position health is continuously monitored using:

evaluation = (perps + in_orders_perps) × price + funds + in_orders_funds

Components:

  • perps: Your perpetual futures position size

  • in_orders_perps: Futures locked in open sell orders

  • funds: Available USDC balance

  • in_orders_funds: USDC locked in open buy orders

Leverage Check

New orders must satisfy the leverage requirement:

evaluation × leverage ≥ -min(perps × price, funds)

If this condition fails, you'll receive an "insufficient funds" error.

Account Data

Your account displays key metrics:

Metric
Description

perps

Current position size

in_orders_perps

Futures in open sell orders

funds

Available USDC balance

in_orders_funds

USDC locked in buy orders

full_position

perps + in_orders_perps

full_funds

funds + in_orders_funds

Liquidation System

Margin Calls

The system calculates a critical price where your evaluation would reach zero:

For Long Positions:

if total_funds ≥ 0 && total_perps ≥ 0: critical_price = 0
else if total_perps > 0: critical_price = -total_funds / total_perps  
else: critical_price = MAX_PRICE

For Short Positions:

if total_funds ≥ 0 && total_perps ≤ 0: critical_price = MAX_PRICE
else if total_funds > 0: critical_price = -total_funds / total_perps
else: critical_price = 0

Liquidation Triggers

Long Position Liquidation: Market price drops below: critical_price × 33/32

Short Position Liquidation: Market price rises above: critical_price × 31/32

Liquidation Process

  1. Automatic Detection: System monitors all positions continuously

  2. Forced Closure: Underwater positions closed immediately

  3. Penalty Fee: 1% additional commission charged

  4. Insurance Fund: Penalty goes to protocol insurance fund

  5. Loss Distribution: If insurance insufficient, losses shared proportionally

Fund Management

Deposits and Withdrawals

Deposits:

  • Direct from your main Deriverse account

  • Immediate availability for trading

  • USDC settlement currency

Withdrawals: Available funds calculated as:

available = min(
    ((perps + in_orders_perps) × price + in_orders_funds) × (leverage-1) / leverage + funds,
    (perps + in_orders_perps) × price + in_orders_funds + perps × price / leverage + funds
)

Withdrawal Restrictions:

  • Must maintain minimum margin requirements

  • Complex calculation during margin calls

  • Uses conservative pricing during stress events

Risk Management

Position Limits

Leverage Limits:

  • Maximum 10x leverage in current implementation

  • Governance can adjust limits

  • Higher leverage = higher margin requirements

Capital Requirements:

  • Isolated margin per position

  • No cross-collateralization

  • Clear risk boundaries

Insurance Fund

Funding Sources:

  • 1% penalty on liquidated positions

  • Additional protocol revenues as allocated

Coverage:

  • Protects against liquidation shortfalls

  • Covers system losses during extreme events

  • Socialized loss mechanism if depleted

Trading Strategies

Directional Trading

Long Positions:

  • Profit from price increases

  • Pay funding when premium to spot

  • Risk: downside price movement

Short Positions:

  • Profit from price decreases

  • Receive funding when discount to spot

  • Risk: upside price movement

Best Practices

Risk Management

Position Sizing:

  • Start with lower leverage

  • Never risk more than you can afford to lose

  • Monitor margin levels continuously

  • Keep emergency funds for adverse moves

Margin Monitoring:

  • Check critical price regularly

  • Maintain buffer above liquidation levels

  • Add margin during volatile periods

  • Set up alerts for margin calls

Technical Details

Price Discovery

Price Sources:

  • External oracle feeds (v1 – Pyth)

  • Transition to on-chain Deriverse spot markets

  • Solana ecosystem price feeds

  • Arbitrage-maintained accuracy

Chained Processing

Position Updates:

  • Sequential client evaluation

  • Automated funding calculations

  • Efficient batch processing

  • Real-time margin monitoring

Common Questions

Q: What happens if I get liquidated? A: Your position is automatically closed, you pay a 1% penalty, and any remaining collateral is returned to your account.

Q: How often do funding payments occur? A: Funding is calculated continuously and applied whenever you or other traders interact with the market.

Q: Can I increase my position size? A: Yes, as long as you have sufficient margin and don't exceed leverage limits.

Q: What if the insurance fund is depleted? A: Losses are shared proportionally among traders with positions opposite to the liquidated position.

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