@AlpacaFinance
The wait is over! Our Perpetual Futures Exchange is ready for launch on Thur, March 9th.
Read our launch details article now to discover all the earning opportunities our new product will offer!
https://medium.com/alpaca-finance/perpetual-futures-exchange-launch-details-88bf24a8e360…
#DeFi #BNB #BNBChain #Perp #blockchain
Huacayachief
https://preview.redd.it/dwoneefsqfma1.png?width=1200&format=png&auto=webp&v=enabled&s=adbba952e3f21da21269aa4f2e23e376471bd82c
Perpetual Futures Exchange Launch Details
Dear alpacas,
The wait is over. The launch date for our Perpetual Futures Exchange (“Perp”) is set. We hope you are as excited as we are about this major product release. This article will walk you through all the key details of the launch as well as the important parameters, so you are ready to take advantage of all the earning opportunities our new product will offer.
🚀Launch Plan
The Perp product will launch on Thur, 9 March 2023 with the following sequences.
Beta (soft) launch phase
The beta launch phase will last for 2 weeks from March 9th — March 22nd. Given that the Perp product is very different from leveraged yield farming, we believe a beta launch will give our users a chance to try out the product and for our team to work on feedback received and make any necessary changes before the full-scale launch.
The following functionalities will be available at launch:
- Up to 50x leverage trading, supporting market, limit, stop entry, stop loss, and take profits orders. *Please note that trading will be temporarily 0-fee, more info later below\*
- Deposit / Withdraw liquidity to the ALP pool
- Staking ALP token for ALPACA incentive rewards
- Swap between the five assets in the ALP pool
- Flash loan
- Referral program; anyone can start generating and entering referral codes. However, note that referral rewards tracking will only start after the 0-fee trading campaign is over (more details below.)
Note: For ALPACA investors, don’t expect TVL to be too high during the beta phase, which is intentional. We will start promoting the product more at the end of this phase, and increase rewards to attract more TVL.
Liquidity pool opens for deposit: 9 March, 9.00 AM UTC.
Users will be able to start depositing assets into the liquidity pool. To attract initial liquidity, we are turning off the deposit fee (see details below in the parameter section) during the beta launch. So make sure to set your alarm and don’t be late!
ALPACA Emissions start: 9 March, 10.00 AM UTC.
ALPACA rewards emissions will start approximately 1 hour after we open the LP pool. You will be able to stake your LP tokens to earn ALPACA rewards on the Stake Page which you can claim anytime with immediate liquidity.
We are providing a lower emission rate during the beta phase and will increase the rate at the start of the full-scale launch in week #3.
Rewards details
A total of 680k ALPACA (~$210k) will be distributed to Liquidity providers over a 10-week period
- Rewards Start Date: 9 Mar 2023 10.00 AM UTC
- Rewards End Date: 18 May 2023 10.00 AM UTC
Distribution Schedule:
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Trading starts: 9 March 2023, 12.00 PM UTC
- Users will be able to open long/short positions up to 50x leverage on BTCB, ETH, and BNB.
- Users will also be able to swap between any of the five assets (BTC, ETH, BNB, USDT, USDC) in the liquidity pool.
- At launch, we will support market, limit, stop entry, stop loss, and take profit orders.
🆓0-fee trading promotion
For the first four weeks of launch (9 March 2023–11.59 PM UTC 5 April 2023), users will be able to open and close leveraged trading positions for FREE, as long as the positions are opened for longer than 15 minutes.
Note: You will pay trading fees when you execute trades. However, all the qualified fees paid will be rebated back to you in full on a weekly basis every Thursday. You will be able to claim the rebates directly on the website.
🙌Trading Fee Discount Program
After the 0-fee trading promotion ends, the standard trading fee on the Perp Exchange will be 0.09% of the trading position size.
To reward our loyal users, we have structured a discount scheme based on your trading volume OR your xALPACA locked in the Governance Vault. The benefit you receive will be the higher of the two.
Trading Discount Tiers
Tier1:
- Benefits: 5% discount
- Requirement: At least $50k total trading volume in the immediately preceding 4 weeks OR Holding at least 5,000 xALPACA in the governance vault
Tier2:
- Benefits: 10% discount
- Requirement: At least $500k total trading volume in the immediately preceding 4 weeks OR Holding at least 50,000 xALPACA
Tier3:
- Benefits: 12.5% discount
- Requirement: At least $2.5Mn total trading volume in the immediately preceding 4 weeks OR Holding at least 250,000 xALPACA
https://preview.redd.it/7vkqyupyqfma1.png?width=1400&format=png&auto=webp&v=enabled&s=71dae183ff3cfd91e2ca9d1c52c5ec1a2331b417
Note:
- Your xALPACA balance for Tier determination is based on a weekly snapshot on Thursdays.
- The discount do not stack. You will receive a discount only for the highest Tier you quality for.
- Traders pay the full 0.09% fee at the time of the trades. The discounts then become claimable on a weekly basis every Thursday.
- If you qualify for any Tier based on trading volume, your benefits will last for 4 weeks regardless of your trading volume in those weeks. See the example below for more details:
Example:
Let’s assume Alice has the following trading volume history (and does not hold any xALPACA)
- Week1: $10,000
- Week2: $200,000
- Week3: $5,000
- Week4: $300,000
- Week5: $20,000
- Week6: $10,000
- Week7: $50,000
- Week8: $30,000
- Week9: $60,000
- Week10: $5,000
In the example above, Alice qualified for a Tier1 discount starting in week3. Then in week5, she began enjoying Tier2 benefits. Her benefits in Tier2 lasted for 4 weeks (week5 — week8) regardless of her trading volume during those weeks. In week 6, her qualification for Tier2 also renewed (for week6 — week9) due to having sufficient trading volume from week2 — week5; In week10, since the immediately preceding 4 weeks’ volume was $111,000 (which is below the Tier1 requirement of $500k but higher than the Tier1 requirement), her benefits fell down to Tier1 for weeks 10–13.
https://preview.redd.it/ip0e0ps0rfma1.png?width=1400&format=png&auto=webp&v=enabled&s=34d2b035c63e2293805e68cb55f399176c127966
👬Referral Program
In order to help grow the user base of our perp exchange, we will create a referral program that rewards anyone who onboard new users. Referrers will receive cash rewards, paid weekly in USDT, as a percentage of trading fees paid by their referred users. We employ a Tier structure that rewards you proportionally higher as you bring more activity to the perp exchange.
Tier1:
- Benefits: 10% rebate on fees paid by referred users
- Requirement: Base tier (No requirement)
Tier2:
- Benefits: 15% rebate on fees paid by referred users
- Requirement: At least 15 active users used your referral code and had a weekly volume of $2.5 million
Tier3:
- Benefits: 20% rebate on fees paid by referred users
- Requirement: At least 30 active users used your referral code and had a weekly volume of $10 million
Anyone will be able to sign up and generate their personal referral code directly on the Referral section of the website when it goes live.
Any user of a referral code will enjoy a 5% discount on the trading fee for the first 4 weeks of their sign up. (If a user signs up during the 0-fee trading period, their discount benefit will start after the 0-fee trading period ends)
https://preview.redd.it/v930kz63rfma1.png?width=1400&format=png&auto=webp&v=enabled&s=d2d71ecbed95c5dc70942ecfe72ee376fe9c7a0c
Note:
- Referral Tiers are independent from Trading Tiers
- While you’ll be able to start creating / sharing your referral code right away, the referral rewards will only become available to you after the 0-fee trading promotion ends
- An active user is defined as a unique wallet address that makes at least 1 trade in a week (weekly cutoff on Thursdays)
- Rebate amounts are calculated before any trading discount is applied
- Borrowing interest and funding rate are not tracked under the referral program
Example:
Alice has 3 active referred users in a given week: Bob, Carol, and Dave.
- Bob’s trading volume: $30k
- Carol’s trading volume: $2Mn
- Dave’s trading volume: $100k
Since Alice has 3 active users using her referral code, she is in Tier1 and will receive a 10% rebate from the trading fees paid by her referred users (before any trading discount applied)
($30k + $2,000k + $100k) * 0.09% trading fees * 10% rebate = $191.70
https://preview.redd.it/3qv2yz45rfma1.png?width=1400&format=png&auto=webp&v=enabled&s=54ee0257a013afae70cb47f12be09e9cb8c80897
💰Revenue Distribution
All protocol revenue for the Perp will be distributed in the following ways:
70% to liquidity providers:
- Liquidity providers must stake their ALP token on the Stake page to receive the revenue share. Revenue collected each week will be distributed in the following week on a per block basis. Users will be able to claim their rewards at any time.
16% to the ALPACA token holders
- 10% to Governance Vault stakers — distributed weekly on the same schedule with other revenue streams
- 6% to buyback and burn — goes toward weekly buyback & burn together with other revenue sources
14% to dev fund
💧LP Pool Composition
Liquidity providers supply assets to one unified liquidity pool which serves as the market-making fund for traders. Providing liquidity can be considered as an investment into a type of index fund that holds a mix of major assets (BTCB, BNB, ETH) and stablecoins (USDC, USDT). The liquidity pool for perp will be comprised of five assets with the following target proportions:
- BTCB = 25%
- ETH = 15%
- BNB = 10%
- USDC = 25%
- USDT = 25%
Note: The designed composition is based on the expected relative open interests of each asset; we might adjust this in the future based on the actual usage of the platform.
⚙️Parameters Details
LP Deposit & Withdrawal Fees
The Fees for LP deposits and withdrawals will have two components
Total Fees = FixedFee + TaxFee
where , FixedFee = 0.30%
and TaxFee ranges from 0% — 0.5%
TaxFee is determined by how the deposit / withdrawal will move the pool closer / further away from the target composition. For a more detailed formula on how tax is calculated, please visit our Docs.
Note: During the beta launch, FixedFee will be set to zero.
Borrowing Fees
Borrowing fee is charged hourly based on the amount of the token you are borrowing through leverage. It accrues to your position and is settled when you make any changes to your position e.g., add/remove collateral, close, increase/decrease position size.
We will employ a single slope linear formula for borrowing fees where the max borrowing rate is 0.0035% / hour (~30% APR)
https://preview.redd.it/rrmc3639rfma1.png?width=600&format=png&auto=webp&v=enabled&s=1f4598f53dac7d7436aacdf218b07653f9b16bab
Note: the borrowing fee model is a dynamic variable; the initial value is set based on analyzing data of other platforms and expected user behaviors; in the first two months after launch, the team reserves the right to adjust this parameter without going through Governance to better optimize user experience.
Funding Rate
Funding rate is paid between longs and shorts to help reduce the skew between long and short OIs (exposure to LPs). The funding rate will be calculated using the following formula:
- Long Funding Rate: (LongOI — ShortOI) / Long OI * funding rate coefficient
- Short Funding Rate: (ShortOI- LongOI) / ShortOI * funding rate coefficient
Where the funding rate coefficient is set to 0.15
Example:
Long OI for BTCB is $1,000,000; BTCB borrowing rate is 15% APR
Short OI for Bitcoin is $400,000; Stablecoins borrowing rate is 12% APR
Long funding rate = (1,000,000–400,000) / 1,000,000 * 0.15 = 9%
Short funding rate = (400,000–1,000,000) / 400,000 * 0.15 = -22.50%
Long total fee = 15% + 9% = 24%
Short total fee = 12% - 22.5% = -10.5%
As we can see from the example above, traders with short OI can execute a carry trade at 10.5% APR
Note: the funding rate coefficient is a dynamic variable; the initial value is set based on analyzing data of other platforms and expected user behavior; in the first two months after launch, the team reserves the right to adjust this parameter without going through Governance to better optimize user experience.
Swap Fee
Total Swap Fees = FixedSwapFee + TaxFee
FixedSwapFee:
- Swapping between stablecoins: (USDC <> USDT) 0.01%
- All other pairs: 0.25%
TaxFee ranges from: 0% — 0.5%
Similar to LP deposit & withdrawal tax, TaxFee is determined by how the swap will move the pool closer / further away from the target composition.
Liquidation Fee
We will charge a fixed liquidation fee of $5.
Flash Loan Fee
On BNB Chain, flash loans are offered by UNIV2-type DEXs and are charged the same as swap fees. To make our rate the most competitive in the market, we will set our flash loan fee at 0.19%.
Note: Having this feature does not increase the risk of our platform. Alpaca Finance leveraged yield farming still DOES NOT accept flash loans. We are only making flash loans available to be used externally.
🔐Security
Security continues to be the first priority for every product we launch. The Perp’s smart contracts have been reviewed extensively through our internal code review process. It has also passed an audit by Inspex which has performed many audits for us in the past. We will share the final audit report prior to the launch date.
🙋“But I still want to know more!”
We’ve already created a step-by-step guide as well as added all the important information on the new Perp product to our Docs. So for those of you who are eager, you can review this new content to become familiar with the Perp’s new interfaces and features before the launch on March 9th!
It’s ok, we understand, we’re excited too! As the biggest platform of on-chain leverage products on BNB Chain, creating new and top of the line products like this is what we live for. Furthermore, Alpaca’s future possibilities will expand tremendously with the launch of this perp exchange. From attracting new users, to creating new use cases, and opening the door to countless new strategies and product synergies, this Perp exchange is the next step in Alpaca’s evolution, so how can we not be excited!
Finally, let’s not forget that AF2.0 is coming just around the corner…but we’ll save that good news for another day so everyone can catch their breath.
In any event, for launch updates on the perp, and other upcoming products, follow us and come talk to us at our socials below. We’ll see you soon!
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