Pool Details
In this section, we will go through the details of each Perpetual Liquidity Pool.
Philosophy
Perpetual Liquidity Pool parameters are carefully created and assigned to curated perp markets. The idea is to assign markets with similar market cap, liquidity, volatility, and price correlations, as much as possible.
This helps liquidity providers achieve a few goals:
Simplify Choices for LPs: By aligning similar markets, we enable liquidity providers (LPs) to easily select pools matching their risk profiles, eliminating the complexity of analyzing each market individually. This creates a more coherent and predictable environment for LPs.
Efficient Portfolio Management: Grouping similar markets allows LPs to manage their portfolios more effectively, balancing risk and potential returns without needing constant adjustments.
Adapt to Market Dynamics: Our pools can be adjusted, ensuring they remain aligned with the changing market conditions, preserving their relevance and effectiveness.
Notice Period
Demex adheres to a transparent and predictable approach for adding or removing markets as well as any changes in parameters or liquidation utilization rates linked to Perpetual Liquidity Pools.
Demex aims to provide notice to all liquidity providers by issuing a 48 hours notice via community channels and within the Demex application before any changes regarding the addition or removal of assigned markets to any perp pool is enacted.
This notice period is essential for maintaining trust and ensuring that LPs have adequate time to adjust their strategies in response to any upcoming changes.
Quoting Strategy Explained
Perp Pool employs a dynamic quoting strategy to optimize market liquidity. This strategy is based on two possible quote price types:
Price Ticks: Denominated in $1 increments.
Ratio: Denominated in percentage (%).
Each quote value represents the distance from the previous quote, with the first quote being set relative to the oracle price. The 'quote amount ratio' dictates the proportion of liquidity allocated to each quote.
Let's take a look at an example below.
The first quote will be $1 away from the oracle price with 30% of the liquidity, while the second quote will be $3 away from the previous quote, with 70% of the liquidity.
Example:
| Quote Strategy | Details |
|---|---|
Quote | 1 |
Quote price type (price_ticks or ratio) | price_ticks |
Quote price value | $1.00 |
Quote amount ratio | 0.3 |
Quote | 2 |
Quote price type (price_ticks or ratio) | price_ticks |
Quote price value | $3.00 |
Quote amount ratio | 0.7 |
Quick Links
All perp pools details, such as the denom, vault address, supply cap, borrow fee, and quote strategy can be found here: https://api.carbon.network/carbon/perpspool/v1/pools
Fee structure of the pool can be found here: https://api.carbon.network/carbon/market/v1/fee_structures/[swth address of the pool]
Example for Celestia ecosystem perp pool: https://api.carbon.network/carbon/market/v1/fee_structures/swth1hf6ngj0t76tl45hnjy5zcjzj4wcnuvcwj580uf
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