Vision
Building the World Market
Virtue aims to build the on-chain derivative infrastructure enabling deep liquidity for a wide-range of assets, becoming the go-to marketplace for perpetual futures launch and aiding existing protocols to hyper scale their listings and liquidity hence, boosting the overall growth of the decentralized finance.
Liquidity Fragmentation is Common.
While DeFi has billions of dollars of TVL, the actual TVL available for on-chain perps has much less. Furthermore, it is deeply segregated across different protocols, deployed on different chains. Derivatives are no doubt complex to get started, but accessibility to the derivatives market should not be.
Virtue will employ a novel approach to counter this by implementing cross-chain liquidity movement unlocking access to deep liquidity from Day 1.
Collateral Assets are Very Limited.
Inspite of having $2T+ worth of market capitalization, the maximum open interest of on-chain derivatives never exceeds few billions any day and majority of it is captured by blue-chip assets.
By allowing any on-chain asset to be unlocked as collateral for a perpetual futures trade or supply as an LP to any perpetual futures market, Virtue will enable trillion dollar liquidity flow into on-chain derivatives, scaling open interest capacity to a trillion in future. This way, all existing on-chain assets unlock a new use-case: to be used as collateral in perps.
Listings on the Existing Perpetual Futures Markets are Limited.
Currently, most of the on-chain perpetual futures markets have limited listings available for an end-user to trade on. The risk and complexity in launching a perpetual futures market of an asset is yet to be resolved by the current ecosystem.
By enabling isolated and risk-managed perpetual futures market to be created on the fly, Virtue will make on-chain perpetual futures market accessible for any asset at any point of time, reducing the burden and pain for projects looking to unlock a liquid perps market for their tokens.
Devs or Governance is Essential.
None of the on-chain protocols allow truly permissionless listing primarily due to the complexity and risk it brings to the protocol and asset. Since on-chain derivatives are still on their training wheels, this is expected. But this process is not valid for experienced or mature projects looking for a new perpetual futures market or collateralization to unlock bigger opportunities for their token holders.
Virtue will resolve this by deploying a two-step process for asset whitelisting and creation of market. This allows end-users such as projects or protocols looking for new use-cases to get into the perpetual futures market faster than ever. No need for devs or governance, just on-chain requests will start the process.
Democratization is Important.
Even if governance vote is needed, there are several cases where the market needs to adjust risk and asset parameters or enable/disable asset listing, which requires stakeholders votes which is completely separate from token holder voting.
Virtue will introduce Market-based Voting Mechanism to allow all LPs of the market to vote on important decisions of their Market, transferring control from the market creator to the stakeholders.
No Control on Market Economics.
Existing protocols operate in a singleton manner. In such a methodology, all the crypto assets may have the same fees and other important economical parameters are often under the control of developers.
Virtue will allow market creators to have complete control on the economics of the market, such as, borrowing fees, funding fees and trading fees at the time of creation. Furthermore, at any point of time, the LPs can decide if they want to change the economics, and do so by governance voting for an isolated market.
No Control on Market Risks
Similar to control of market economics, important risk parameters are often determined by the developers or a governance (if any) of the protocol, which may result in systematic risk for the protocol. Ability to manage the market if handed over to the market creator and the stakeholders who are taking majority of the risk, is a double-edged sword, but if exercised with caution can allow proper and democratic risk management enabling responsibility and awareness.
Virtue will allow market creators to have full control on the risk parameters to the maximum possible extent at the time of creation of the market, which may include, max leverage, max profit factor, buffer amount and several others, empowering stakeholders to ensure sustainable operation of their market.
Periodic Monitoring is a Necessity.
Since perpetual futures markets have a unique set of risk parameters, they often require periodic monitoring to ensure smooth and sustainable operation. Usually, this role is often taken by developers or a group of risk analysts, yet it requires governance voting and other processes, to ensure proper and systematic updates.
Virtue will deploy a risk management dashboard available to all LPs of their respective markets. In an event where an LP identifies some issue, they can alert the other stakeholders and the protocol developers immediately allowing the personnel involved to act quickly. However, developers will still act as gate-keeper to ensure no malicious intent has been validated for update.
User Experience is a Nightmare.
The user experience of currently available on-chain perpetual futures is a nightmare to a new user. While experienced users are able to handle themselves with ease, novice users need to be educated and improved to unlock the next billion users into derivatives. While the underlying technology is complex, the user experience doesn't need to be.
Virtue will simplify user-experience of on-chain perpetual futures by deploying clean user interface, proper documentations and video-walkthroughs which will allow anyone to understand and use the protocol from Day 1.
Targeting Users not Communities.
Derivatives protocols in DeFi, usually target the users directly, instead of targeting the communities where stakeholders can be the potential users who will use the protocols. It is important to work with such communities and build long-term sustainable relationships.
Virtue will work with several projects and protocols in the ecosystem to build a vibrant community where each member is either LPs earning native yield or traders to long or short the market.
With our vision, we are looking towards building more liquid derivatives for DeFi and scaling DeFi to match with TradFi's capacity, by working together with all protocols and projects across DeFi.
Let's build the World Market, Together.