Perpetuals
Perpetual contracts in Vanna allow traders to access highly leveraged positions on the price movements of cryptocurrencies, without the expiry dates typically seen in traditional futures markets. Traders can borrow margin balance with up to 10x leverage from Vanna’s lending pool, which can then be deployed across perpetual markets like GMX, MUX on Arbitrum, Perp on Optimism, Avantis on Base and other platforms to be added in the future. Traders can further amplify their exposure by taking additional leverage up to 100x, significantly increasing their potential gains on crypto assets.
How Perpetuals Work
1. Borrow with Leverage from the Lending Pool:
Traders start by borrowing margin balance from Vanna’s lending pool, using their collateral to unlock leverage up to 10x. This borrowed margin acts as the trader’s initial capital for trading in the perpetual markets.
2. Further Leverage in Perpetual Markets:
After borrowing the margin balance, traders can enter perpetual isolated margin markets on platforms such as GMX and MUX. Here, they can apply additional leverage up to 100x on their margin, significantly amplifying their positions. This means traders can start with 10x leverage from Vanna and then apply up to 100x leverage for larger exposure in perpetual markets, allowing for massive returns on well-placed trades.
Note: These are isolated margin contracts only; no cross-margin contracts are available.
3. Flexible Long and Short Positions:
Traders have the flexibility to take both long (betting on price increase) and short (betting on price decrease) positions. This allows traders to profit from both bullish and bearish market conditions, giving them strategic control over how they want to approach market movements.
4. Trading on Supported Perpetual DEXs Based on Chain:
Traders can choose which perpetual DEX they want to trade on, but only within the chain where their margin balance was borrowed. For example, if a trader deposits their collateral and borrows margin on Arbitrum, they can only trade on perpetual DEXs supported on Arbitrum, such as GMX or MUX. This ensures that margin balances are deployed within the same ecosystem to minimize cross-chain risks.
5. Hedge Mode:
Vanna is introducing hedge mode in DeFi for the first time. This feature allows traders to simultaneously hold both long and short positions for the same trading pair, providing unparalleled flexibility for managing market volatility. Hedge mode enables traders to effectively balance their exposure, reduce risk, and execute more sophisticated strategies without closing any existing positions.
6. No Expiry:
Unlike traditional futures contracts, perpetuals on Vanna have no expiration date, so traders can hold their positions as long as they wish, provided they maintain sufficient margin in their accounts. This offers traders the flexibility to manage their risk and market exposure without being forced to settle their positions at a fixed date.
Key Benefits of Perpetual Contracts on Vanna:
High Leverage Potential: By combining the initial margin borrowing from Vanna’s lending pool (up to 10x leverage) with the additional 100x leverage on perpetual platforms like GMX and MUX, traders can significantly amplify their positions for maximum profit potential.
Hedge Mode Flexibility: With hedge mode, traders can hold both long and short positions on the same pair, providing enhanced control over their risk management and allowing for advanced trading strategies in volatile markets.
No Expiration: The absence of expiry dates in perpetual contracts means traders can hold positions as long as their margin account remains healthy, allowing for longer-term strategies without forced liquidation due to contract expiration.
Dynamic Risk Management Using Greeks Dashboard: Traders can utilize the Greeks Dashboard in Vanna to optimize their trades in real-time. The dashboard provides metrics like delta, gamma, and theta, enabling traders to adjust their perpetual positions, hedge their risks, and maintain a strong health factor on their margin accounts.
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