Hybrid Liquidity

Both our PLP-β (Multi-Asset Liquidity) and PLP-α (Synthetic Liquidity) models utilize a Peer-to-Pool approach, which enables users to take positions either in favor of or against the market. In this system, the liquidity pool acts as the counterparty, and all liquidity providers share the profits and losses (PnL) as well as fees accumulated from user transactions. When the open interest surpasses the total value locked within the liquidity pool, users will be unable to open new positions.

PLP-β: Multi-Asset Liquidity

This model takes native tokens as collateral and tokens can open long positions to their tokens only( BTC token can only be used to long BTC), and USD stables can open short positions only. Any other collateral used to open a position will be swapped to the respective token they are trading with (e.g. opening a 50x Long on ETH with $1000Usdc will first swap the collateral into $1000 equivalent of ETH, then opening up the position)

Whenever users take a long position on a market, the equivalent amount of tokens to the position size is reserved to payback to the trader when the position is closed (e.g. When opening a 10 ETH long, 10 ETH in the vault will be reserved and "utilized". So if the trader closes the position in profit, the profit will be paid towards the trader from the utilized ETH and the rest goes back to the pool).

Conversely when users take a short position on a market, the equivalent amount of USDC will be reserved and "utlilzed" before the close the position.

PLP-α: Synthetic Liquidity

This model takes USDC stablecoin as collateral only for all users to take any positions on any market. Since LP is no longer limited to a particular market thus it makes more capital efficient, it also opens up a lot of market opportunities which the other model can not enable since not all coins can be included in a ‘crypto index product’. However this engine can not support swapping because it only takes USD stables as collateral.