Rebalancing INJ/USDC Market on OraiDEX Futures
⚠️ Important Notice: INJ/USDC Pair on OraiDEX’s Futures
To enhance stability, we are rebalancing virtual liquidity for the INJ/USDC vAMM pool on OraiDEX Futures. As the existing trading pair will be undergo maintenance, we strongly advise all users to consider closing their current positions as a precautionary measure to prevent any foreseen incidents. We will inform the community promptly when maintenance is complete and trading activity can be resumed. Stay tuned for the next updates.
Introduction
After the launch of 10X leverage for the INJ/USDC market on OraiDEX Futures, the protocol experienced unprecedented volume. While celebrating the successes, we have also monitored protocol health, noting opportunities to improve OraiDEX Futures and enhance user experience. The maintenance of the INJ market aims to rebalance virtual liquidity in the INJ/USDC vAMM pool, aligning prices more closely with real-time data via oracle.
To understand this in depth, let’s delve into OraiDEX Futures and explore the functionality of Virtual Automated Market Makers (vAMMs).
What is vAMM?
Virtual Automated Market Makers (vAMMs) operate on a constant product formula, similar to traditional Automated Market Makers (AMMs). Unlike AMMs, vAMMs rely on “virtual assets” to simulate trading environments. This allows for effective price discovery without the capital intensive demands of traditional AMMs, requiring a significant deposit of user liquidity into pools to facilitate efficient trades. vAMMs heavily depend on oracle feeds to track the difference between spot and market prices, setting funding rates to keep the market honest.
Funding rates are a critical mechanism in perpetual futures markets, serving as a tool to anchor the futures prices to the spot market prices. In essence, funding rates are periodic payments made to or from traders based on the difference between the perpetual contract market and the spot price. On OraiDEX Futures, these rates are particularly important as they are settled and recalculated every hour. This frequent recalibration ensures that the futures market remains closely tied to the underlying asset’s market conditions, providing a fair and balanced trading environment.
How does rebalancing the INJ/USDC vAMM pool improve the user experience?
Market movements are primarily driven by trading against the vAMM pool, making the virtual liquidity particularly important for determining price impact with every order. The initial INJ/USDC vAMM pool was launched with substantial virtual liquidity, necessitating high trade volumes to impact price movements. As we witness a deviation between spot and market prices, we rebalance the vAMMs virtual liquidity to maximize efficiency, making it easier for price to naturally correlate to spot price.
What’s next?
We are confident that this maintenance will help to foster a more robust and healthy market. Additionally, we are diligently working on UI/UX updates that will significantly enhance the user experience. These updates will enable users to more effectively track funding rates and payouts in real time, leading to a more efficient market.
We urge all users with open positions in the INJ/USDC market to close their orders to avoid potential issues during the rebalancing and relaunch phase of the INJ/USDC market. Your proactive action is crucial for a smooth transition and will greatly contribute to the overall stability and efficiency of the market.
Stay tuned for more updates as we continue to refine and improve the OraiDEX Futures trading experience.
