👍Perpetual Futures: The Basics
Perpetual Futures: The Basics
On-Chain Perpetual Futures Contracts on Vibe Vibe offers on-chain perpetual futures, contracts without an expiry date, allowing risk exchange on asset prices. Cash settlement is based on price differences from trade start to closure, influenced by leverage levels.
Key Features:
No Expiry Date: Hold positions indefinitely.
Continuous Monitoring: Track prices and funding rates for profitability.
Collateral & Cross-Margin Account Mechanics: Deposit collateral (usually USDC) into a cross-margin account before trading. This enhances liquidity and minimizes premature liquidations.
Highlights:
Pooled Margin Benefits: Balances unrealized profits and losses against market volatility.
Leverage Implications: Market shifts can impact gains or losses.
Future Updates: Isolated trade positions for added flexibility.
Understanding Funding Rates
Vibe’s funding rate mechanism aligns perpetual contract prices with the underlying asset’s spot price for a fair exchange between long and short positions.
Terms & Definitions
Unrealized Profit and Loss (UPNL): Potential gains or losses if a position is closed.
Open Interest (OI): Total value of active contracts, indicating market activity.
Account Health: Safety margin before liquidation.
Maintenance Margin (CVA): Security deposit to prevent liquidation.
Equity Balance: Total account value, including allocated balance and UPNL.
Allocated Balance: Funds set aside for margin in sub-accounts.
Initial & Locked Margin: Margins tied to active positions.
Available for Orders: Balance available for new trades.
Withdrawal & Proof of Time: 12-hour security measure against double spending, with expedited processes possible through third parties.
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