Traders
Trading Perpetual Futures on Lynx
In this section we examine the competitive advantage of trading on Lynx. To see a tutorial on How to Open/Close a Trade, see:
Key Features for Traders
Traders can use almost any token as collateral to open trades. Using their favorite tokens, traders can get exposure to blue-chip instruments without needing to sell their holdings. For example, a UNI holder who wants exposure to BTC could enter a long position on BTC/USD using UNI as collateral.
Wide and Ever-Expanding List of Collateral Assets (eg. Stablecoins, Governance tokens, LSDs)
Up to 100x leverage on tradeable instruments
Competitive fees
Self-custody trading with no sign-up
Guaranteed payouts for winning traders (read more here).
Selecting a Collateral Asset
Traders first select which collateral asset they want to use to open their position. This asset determines which liquidity pool the trader will be going against, as well as which asset their trade and trading fees will be settled in. For example, using TKN (a generic symbol representing any token) as collateral will result in any profit/losses being paid in TKN (see more here).
Regardless of the token used as collateral, the token's price has no impact on the health of the position. In other words, a drop in the token's price does not bring a trader closer to liquidation and an increase does not bring them farther from liquidation.
To learn more about how the price of the collateral asset is not relevant to the health of a position, read here.
The price of the collateral asset does not affect the health of a trader's position
Pricing
Lynx utilizes a high-performance, on-demand price oracle to determine the entrance/exit price for trades. The use of such an oracle offers two main benefits:
Accurately reflects the current spot price of the traded instrument
Prevents oracle front-running
While prices on Lynx are currently supplied by Pyth, Lynx looks to integrate with several reliable oracles so long as they possess the following features:
On-demand/pull model
Allow anyone to broadcast prices
Resiliency to Price Wicks (ie. by aggregating spot price data and effectively filtering irregular price movements on any given exchange)
Liquidations
In Lynx, liquidations occur when a trader's losses - as calculated by PnL - reach a threshold equating to 90% of their collateral (this will be increased in the future). At this point, all losses and accumulated fees are deducted from the trader's collateral and sent to the corresponding liquidity pool. Any remaining collateral has a small liquidation fee applied to it before the remainder is returned to the trader's wallet.
Since Lynx utilizes synthetic exposure, no assets are bought or sold during the liquidation process. Therefore, Lynx can operate with low liquidation fees for traders (liquidation fees may get removed altogether in the future).
The positionValue that triggers liquidation for a long position is defined as:
And the positionValue that triggers liquidation for a short position is defined as:
Last updated