Product Offerings
Delivering what DeFi needs the most. Unlocking massive liquidity flow for protocols.
Ecosystem Requirements
Decentralized Finance (DeFi) is built on two crucial components:
Liquidity: The provision of surplus liquidity is essential for facilitating various activities and transactions.
Framework/Processes: A well-structured framework is required to effectively utilize the liquidity and generate meaningful outcomes or value—that is, to engage in productive markets or processes.
In essence, a protocol must be designed to support both surplus liquidity at any market conditions and mechanisms or process to leverage this deep on-chain liquidity in a capital-efficient manner. Such a protocol lays the groundwork for scaling DeFi to its full potential which is essential for ensuring the long-term sustainability and growth of the DeFi ecosystem.
Our Solution
Keep this above in mind, Virtue will offer following products to its end users in its first iteration of the protocol to fulfil the crucial needs of DeFi:
Spot or Swap Market - Enabling multi-collateral trades and supply of liquidity.
Futures Market - Allowing end-users to leverage their portfolio like never-before.
Liquidity Market - Unlocking the flow of bloodline of DeFi for multi-million capital-efficient trade executions.
Summary
The core fundamental products offered by Virtue can be summarized as:
RollMarkets: Deploy Perps Markets collateralized by any Asset.
RollPerps: Deploy Perps of any Asset or Data Stream.
RollSwitch: Switch between Perps and Spot Market anytime.
Spot or Swap Market
The Spot or Swap Market allows users with the ability to engage in multi-collateral trades and supply liquidity. This component enables effortless asset trading by facilitating swaps between various tokens listed on the protocol. By offering multi-collateral support, Virtue reduces the need for users to interact with multiple dapps to find the suitable collateral or asset to open trades or provide liquidity, thereby improving their trading experience.
Spot Market enables Virtue to deliver the best end-user experience by:
unlocking wide varieties of ever-growing list of tokens or assets available on-chain to scale collateralization supported by the Futures Market,
enabling new users to have their first hands-on experience on first entry point of DeFi,
delivering the best possible spot pricing,
facilitating NFT trades in similar manner as tokens or assets,
allowing new users to have flexibility to provide liquidity in the asset of their choice or holding,
and granting ability to execute spot-futures arbitrage or similar trades.
Virtue is actively working towards the democratization of financial markets by potentially allowing users to create various spot market types, including those for real-world assets, forex, commodities, and fractionalized NFTs.
Virtue aims to unlock the next billion dollar liquidity flow for DeFi through its Spot Market.
Futures Market
Virtue offers Perpetual Futures under its Futures Market, allowing end-users to trade on price action of an asset without holding the actual asset. Since this market has no expiry, it is mostly used to get exposure to price or hedge risk. Users can go long (buy upside of the asset) or short (sell downside of the asset) depending on their risk appetite.
The perpetual futures market enables DeFi to enabling next billion trades by:
allowing for unlimited potential listings through the utilization of reference assets and price oracles, obviating the need for physical settlement,
catering to various user preferences by allowing the creation and participation in multiple futures market types, including stablecoins, real-world assets, foreign exchange (FX) assets and others,
prioritizing responsible trading practices by implementing a comprehensive risk management framework for perpetual markets which includes parameters to limit individual positions per asset and market, alongside other futures-specific parameters;
enabling multi-million dollar trades via diversified collateral options through Spot Market,
unlocking billions of dollars of open interest via comprehensive collateral listings and
novel architecture to provide non-custodial trade execution.
Types of Futures Markets
The Futures Market can be further broken down into two types based on the assets and their market timings:
Crypto Assets: These assets are available for trading 24x7x365 without pausing.
Timed Assets: These assets are available for trading on specific timing such as FX, Commodities etc.
The market design has been carefully built to ensure unhindered operation of either assets in terms of trade execution and liquidation especially during opening and closing hours.
Improving Capital Efficiency: Enabling Synthetic Leverage
While synthetic leverage introduces additional risks to the market and its users, AlphaX acknowledges the massive potential of synthetic leverage. Since AlphaX, provides full autonomy to its end-users to create a market of their own choice, they can unlock synthetic leverage by simply requesting a market update to the Market Engine.
Market creators have complete control over enabling synthetic leverage through the Reserve Factor (RF) parameter. This parameter dictates the portion of the market reserved to act as a counterparty for all positions, mitigating potential losses. By setting the RF to 100%, synthetic leverage is disabled, while values below 100% allow it, requiring increased risk management responsibility from the market creators, which is handled by default in the underlying smart contracts.
This could be illustrated with an example:
Non-Synthetic Market (RF = 100%)
Market's Total Liquidity: $100M
Market's Available Liquidity for Futures: $60M
Maximum Open Interest Allowed: $60M (combined across all pairs)
Non-Synthetic Market (RF = 50%)
Market's Total Liquidity: $100M
Market's Available Liquidity for Futures: $60M
Maximum Open Interest Allowed: $120M (combined across all pairs)
Liquidity Market
Liquidity, the lifeblood of Decentralized Finance, fuels the intricate network of transactions that underpin its vast potential. As more liquidity pours into the DeFi ecosystem, we can expect a massive upscaling of its capabilities, transforming a nascent financial paradigm into an unstoppable force shaping the future of finance.
AlphaX leverages a community-driven liquidity model, enabling users to actively participate in shaping the DeFi's market dynamics.
Inspired from Uniswap's approach, AlphaX unlocks massive liquidity influx in the space for all protocols to utilize by :
allowing anyone to add or remove liquidity from any market after its creation to foster a decentralized and community-driven market ecosystem for anyone to deploy capital into,
incentivizing Liquidity providers (LPs) to act as market makers collect fees and share the profit/loss (PnL) generated by traders within the market they have provided liquidity into resulting in active participation and contribution scaling DeFi to next trillion dollar liquidity;
granting LPs the option to choose the specific asset they want to contribute to the markets, allowing them to strategize their liquidity provision based on their individual preferences and risk tolerance allowing their portfolio to unlock new yield opportunities;
offering LPs flexibility in withdrawing their share from the market in which they can choose to withdraw either:
Individual assets: Each LP can withdraw their original contribution or
Proportional withdrawal: LPs can withdraw a combination of assets proportionate to their contribution allowing them to adjust their liquidity exposure as needed; and
protecting LP against market manipulation, price oracle attacks with powerful reconstructed oracle design.
Tailored Liquidity Roles:
AlphaX empowers LPs to choose their role and optimize their participation within the platform:
Swap Market LP: Participate in the swap market and benefit from fees while mitigating impermanent loss. This option is suitable for LPs seeking stable and predictable returns.
Futures Market LP: Engage in the futures market and share the PnL generated by traders. This option caters to LPs with a higher risk tolerance who seek potential for amplified returns.
Dual Market LP: Contribute to both markets simultaneously, maximizing their potential returns while also diversifying their exposure. This option is ideal for LPs who wish to capitalize on both swap and futures market activity.
By fostering a decentralized and user-driven approach to liquidity, AlphaX empowers individuals to actively participate in shaping the platform's market dynamics. This, coupled with the flexibility of choosing an LP role and managing contributions, creates a robust and dynamic DeFi environment that caters to diverse user preferences and risk tolerances.