Qilin: Liquidity at the heart of crypto derivatives
Putting Liquidity at the Heart of Crypto Derivatives
Original source: CoinDesk
DeFi's spot trading and swap markets have grown exponentially over the past year. But the DeFi derivatives market is still small and has yet to attract significant users. There are fundamental differences between the spot and derivatives markets, suggesting that there are more challenges to be addressed in making decentralised derivatives more widely available.
A key reason for the lack of traction in the decentralized derivatives market is the lack of a viable business model. Most of the current derivatives protocols are inspired by the Uniswap V2 spot market model, which means they have an unlimited liquidity pool and an automated market maker model. However, without an effective liquidity provider (LP) risk management system or LP bonus, LP has no incentive to provide liquidity for derivatives given the high risk.
Qilin Protocol Aimed at solving this problem. Qilin Protocol Is a permissionless, crypto-denominated, perpetual transaction protocol for all crypto assets. The essence of the protocol design lies in its understanding of the LP business, which has been active on the front lines of market-making services for projects and exchanges since 2017.
Qilin Protocol The first supporting feature for LP is the peer-to-Tranches liquidity model. This model allows LP to have private liquidity tiers/individual liquidity tiers so that they can control risk exposure and manage token inventory according to their own needs. LP can even be based on Qilin External contracts to develop their own front-end. The liquidity level that these LPS have is Qilin The point-to-pool counterpart is the main liquidity in the model, so returns are higher. Yield-seekers, on the other hand, can provide reserve liquidity using tiers with no public upper limit.
Qilin Another support feature for LP is the list of licensed margin contracts for tokens. This feature means that LP can trade on the index market without having to convert shanzhai coins into stable coins. Reverse pools of contracts with the tokens themselves as margin are available at Qilin Created in a license-free system. This improves the capital efficiency and accrual value of LP shanzhai coin inventory.
At the protocol level, Qilin Have liquidity protection mechanisms based on current LP exposure resulting from mismatched contract positions, including rebase fund rates paid to liquidity pools. There will also be companion engines that contain the latest information on market risk.
Qilin Our technical team has been active in the cryptocurrency market since 2017, has extensive experience in the development of public chains in several major blockchains, and has been involved in DeFi since 2018. Another part of the team has a market-making background. Over the years, after serving over 400 cryptocurrency projects, Qilin Key business cases for crypto assets are targeted and the importance of business models for exchanges is clarified. Based on commercial services for users and research at the protocol level, Qilin The agreement will eventually become the Uniswap of derivatives.
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
Related Articles
