Next-Gen Trading Engine — Narwhal Deep Dive #1

Designed by traders, every single aspect of Narwhal reflects our vision of how trading should be in an ideal world. We are thrilled to present the beta launch in a series of 3 articles, where we will introduce you to all the available trading features.

Ensuring a seamless trading experience ranks among the top priorities of an exchange, and that’s precisely where our focus lies. Our aim is to offer a comprehensive range of functionalities while maintaining a minimalist approach. Let’s dive into the key features:

Order Types

• Market Order — This type opens the position immediately at the prevailing market price. It is the default option for those who are content with the current price and wish to open the position without delay.
• Limit Order — This type opens the position when the price reaches a more favorable level. It is the go-to choice for those who are willing to wait for a better price.
• Stop Order — This type opens the position when the price reaches a less favorable level. While it may seem unusual to those unfamiliar, it is a powerful tool for breakout trades.

Leverage

Upon launch, Narwhal offers a leverage of 100x on ALL assets available on the platform.

Take Profit / Stop Loss

Keeping it simple, you can specify a specific price for taking profits or setting stop-loss orders as you open the position, eliminating the need for manual price monitoring.

Open Interest

To manage the risk of NLP (Narwhal Liquidity Provider) even under extreme circumstances, there is a cap on the maximum outstanding trades for each asset on both sides. If this cap is reached, users cannot open additional positions of that specific asset and side until older positions are closed, freeing up the quota. For instance, if too many traders take a long position on DOGE coin, new DOGE long positions will be temporarily disabled, while all other trades remain unaffected.

Funding Fee

The funding fee plays a crucial role in platform stability. As Narwhal is not an order book exchange, there is no direct counterparty for each trade, and NLP bears all the PnL (Profit and Loss) incurred by traders. To avoid significant fluctuations in NLP, the funding fee is implemented to maintain a healthy balance between long and short positions.

When a high number of traders take the long side, the fee for holding a long position increases, and traders who take the short side receive the funding fee incurred by the long side, and vice versa. This incentivizes traders to take the opposite side when sentiment becomes one-sided, ultimately balancing the trades on Narwhal and keeping NLP relatively risk-neutral.

Borrow Fee

The borrow fee simulates borrowing costs, as the Narwhal platform provides synthetic leverage and maintains robust risk management for the protocol.

Price Oracle

Powered by Pyth, Narwhal provides lightning-fast and accurate prices to traders at an extremely low fee. Pyth collects market data from over 70 top publishers, including some of the world’s largest exchanges and market-making firms like Binance. Our prices update multiple times per second, providing a reliable and robust aggregate of publisher prices.

Price Chart

Narwhal uses the top-notch chart provider familiar to every trader — TradingView. The sky’s the limit when it comes to analyzing and working on your charts with TradingView, offering almost no restrictions.