Perpetual Pool

A Perpetual Pool refers to a liquidity pool designed to support and market-make in perpetual markets. Unlike traditional markets with fixed expirations, perpetual markets operate continuously. The Perpetual Pool employs an Automated Market Maker (AMM) to automatically quote prices in these perpetual markets, using deposited funds to place bids and asks on the order book. This mechanism facilitates seamless trading, allowing users to enter or exit positions swiftly with minimal spread.

The Quoting Strategy within a Perpetual Pool involves configuring how the AMM operates in each market. This includes parameters like marketId, quoting mode, maximum liquidity utilization (maxLiquidityRatio), and the structure of quotes (quoteShape). These settings dictate the adaptive quoting of prices and quantities, ensuring responsiveness to market dynamics.

Derived from the Quoting Strategy, the Quote Price and Quantity calculations determine the actual levels at which prices and quantities are quoted on the order book. The price for each quote is influenced by the previousPrice, adjusted based on specific attributes in the quoting strategy. Simultaneously, the quote quantity takes into account available balance, maxLiquidityRatio, position size, and quoteAmountRatio, resulting in a flexible and dynamic quoting system.

Efficiency is a hallmark of Perpetual Pools, demonstrating effective Capital and Liquidity Efficiency. Utilizing an AMM that quotes prices across multiple perpetual markets, these pools optimize the allocation of liquidity. This not only enhances capital utilization but also provides ample opportunities for liquidity providers to earn yields in a continuous trading environment.