AshPerp: The First Decentralized Perpetual Protocol on MultiversX
With a clear vision to establish ourselves as the One-stop DeFi hub on MultiversX, we’ve been at the forefront of pioneering solutions in the rapidly advancing world of DeFi.
Today, we’re ecstatic to announce our latest product: AshPerp — The First Decentralized Perpetual Trading Protocol on MultiversX. This marks yet another significant stride in our relentless pursuit of innovation.
1. The Need for a Decentralized Perpetual DEX
While popular, centralized perpetual exchanges like Binance or Coinbase come with their own limitations. From security concerns to lack of actual ownership, traders often find themselves at the mercy of centralized entities. That is why DeFi developers have tried to build decentralized perpetual trading platforms over the years, which promise self-custody, security, and transparency.
Since the FTX collapse and CEX exodus, the DeFi space has witnessed a surge in perpetual and derivatives trading on various blockchains. According to Defillama, the derivatives sector is clocking in for over $1.2 billion in combined TVL, attracting a growing traction of over $1.5 billion in daily trading volume.
However, a glaring gap remained on MultiversX: a decentralized platform supporting perpetual trades of non-ESDT tokens, forex, and other real-world assets.
AshPerp is our answer to this pressing need.
2. Introducing AshPerp
AshPerp is the first decentralized perpetual trading protocol built on MultiversX that offers a liquidity-efficient, powerful, and user-friendly trading experience. Our designed synthetic architecture makes AshPerp a robust platform for traders to trade on a wide range of assets at a high level of leverage.
AshPerp will be launched as a peer module with AshSwap, which signifies our vision to reposition AshSwap as The One-stop DeFi Hub on MultiversX.
3. AshPerp Mechanism: How Does It Operate?
At its core, AshPerp simplifies the on-chain trading process.
(1) Trades are initiated using stablecoin as collateral (USDC on Devnet), irrespective of the trading pair. The leverage is synthetic and backed by Perpetual Vault.
Note: Check the table at 6. AshPerp Key Features for more details on trading.
(2) Three off-chain oracle nodes are activated when a trader initiates an order. These self-developed oracles will source the median spot prices from leading centralized exchanges (CEXs) APIs to ensure the perps price is as close to the market spot price as possible before executing it.
(3) Matching bots are put into the exchange operation to monitor asset prices and execute orders such as Limit, Stop Limit, Take Profit, Stop Loss, and Liquidation.
(4) The Perpetual Vault plays the heart of AshPerp, acting as the counterparty for all trades to handle PnL distributions. Specifically, USDC is taken from the Perpetual Vault to pay the traders’ profits, and traders’ losses are directed to the vault. In return, Perpetual Vault will get a portion of the trading fees. These fees are then proportionally distributed among USDC liquidity providers (LPs), ASH Governance stakers, and the team as an incentive to stay in the vault.
A more detailed article about how the Perptual Vault works will be soon released!
4. AshPerp’s Edges: What Makes Us Stand Out?
Synthetic Architecture
AshPerp’s synthetic approach is its standout feature. The leverage in AshPerp is synthetic by Perpetual Vault, where the PnL of each trade is calculated within the platform’s smart contracts and settled against the vault to pay out or receive back from traders.
All trading pairs on AshPerp are supported by oracles and do not require the underlying tokens. This unique feature makes AshPerp versatile and suitable for MultiversX, mainly where on-chain crypto assets are limited. This means traders can seamlessly trade popular assets like BTC, ETH, and BNB, even forex and commodities.
Best Median Prices
Price accuracy is crucial for traders, especially in a volatile crypto market. AshPerp employs off-chain oracle nodes to fetch real-time median spot prices on-demand from 9 top CEX APIs without relying on order books or similar models, then cross-check with Hatom Price Feed to prevent outliers.
This practice effectively filters out any abnormal price actions that might occur on a sole exchange due to manipulation or a lack of liquidity. "Scam"wicks"—sudden price spikes or drops that can trigger stop losses or liquidations commonly seen on centralized exchanges—will be effectively eliminated on AshPerp.
Liquidity Efficiency
Unlike traditional perps DEXs which require separate liquidity for each trading pair, AshPerp utilizes a single liquidity pool for all its trading pairs, simplifying the listing management process and ensuring that every trading pair benefits from larger position sizes.
High-level of Risk Management for Liquidity Providers
To protect the interests of LPs in Perpetual Vault, AshPerp has implemented specific risk management measures. These include a limit on the number of open trades per trading pair per wallet, a winning percentage cap on each trade collateral, and a withdrawal system that operates on an epoch-based schedule, with each epoch lasting 72 hours.
Moreover, when overall PnL is negative, the Vault creates a buffer with those funds, which makes our Vault an overcollateralized pool. This offers additional protection to LPs’ funds and the protocol.
Borrowing Fee Structure
Say goodbye to funding fees on CEXs. We are introducing a new fee model called Borrowing Fee. The old funding fee model struggles to balance OI on each trading pair and limits the vault’s PnL drawdown risks due to the challenges faced by funding fee farmers. Meanwhile, borrowing fees treat open trades of the dominant side as vault borrowers, enabling greater scalability of the maximum OI per pair without increasing vault TVL.
The new model allows for a more dynamic and adaptive fee structure and addresses the inefficiencies associated with funding fee arbitrage since borrowing fees are sent directly to the vault as negative PnL. This creates a significant edge for AshPerp in terms of better risk management and supporting traders to open larger positions without increasing fee APRs.
5. User Advantages with AshPerp
Robust Trading Experience
Traders can enjoy high-leveraged and asset-diversified futures trading with unparalleled capital efficiency, low price impact, and low trading fees. AshPerp is a perps DEX where traders truly have the reins.
The whole trading process is fully decentralized. When trading on AshPerp, you interact directly with smart contracts. We cannot make any alterations to your active trades without your approval through the smart contract to either a stop-loss or take-profit, except in cases where your position requires liquidation.
AshPerp improved interface will help maximize the user experience for both newcomers and seasoned traders. You can open long or short positions, set stop loss, and take profit with just a few clicks. Some supplemental features in the first version of AshPerp are:
- Live Charts powered by Trading view
- Position Monitoring Dashboard
- Perpetual Vault Dashboard
- One-click trading (1CT) — which removes the need to interact with a wallet when submitting transactions, thus reducing time to trade and more.
- Statistics and Leaderboard
Value-added Benefits
There’s a silver lining for LPs in our Perpetual Vault: Revenue-Sharing. A part of net PnL in the form of APR, a proportional share of total trading fees in a secure vault.
As AshPerp is a module running in parallel with AshSwap, the revenue-sharing scheme is applied to veASH holders simultaneously. veASH holders are entitled to receive a part of the total trading fee generated from AshPerp in stable LP. Together with AshSwap Aggregator v1.2, AshSwap, AshPerp are shaping a value-accrued ecosystem revolving around the $ASH token.
6. AshPerp Key Features
The first AshPerp version will be launched on MultiversX Devnet on October 18, while the Mainnet launch is planned for Q4 2023. Some expected features are listed below.
7. Conclusions
As we embark on this exciting journey with AshPerp, we can’t help but anticipate the transformative impact it will have on the MultiversX landscape. Its commitment to decentralization, security, inclusivity, and user-centered design aligns with what we aim for at the early step with AshSwap.
So, hear us and rejoice, AshSwapians! Join us at the AshPerp Devnet Launch coming on October 18, and don’t forget to stay tuned for the latest announcement on our social media.
8. FAQs
- What is AshPerp?
AshPerp is the first decentralized perpetual trading platform on the MultiversX blockchain, offering a seamless trading experience for a wide range of assets (crypto, forex, etc.) with high leverage.
In short, you can consider AshPerp a “decentralized version of futures trading platform on CEXs such as Binance, OKX, and Bybit…”
- How does AshPerp ensure accurate pricing?
AshPerp uses on-demand oracle nodes to fetch real-time spot prices from top centralized exchanges and cross-check them with Hatom Price Feed to ensure accuracy and transparency.
- What benefits do liquidity providers receive?
Liquidity providers in the Perpetual Vault share in the trading fees, ensuring consistent rewards for their contribution.
- Where can I read technical information about AshPerp?
You can read more details about Perpetual mechanism, trading flow, fee structure, and more in our docs: https://docs.ashswap.io/getting-started/understand-ashperp
- Are there any community events to kick off AshPerp?
Absolutely yes. We are harboring some exciting collaborative events, including but not limited to trading campaigns, quests, and feedback bounty. Make sure you follow our Twitter not to miss a thing.
