💹Derivatives Trading (V2)

Decentralized trading platforms facilitate the trading of financial tools referred to as decentralized crypto derivatives. These derivatives derive their value from underlying assets, specifically cryptocurrencies. Taking part in trading or owning decentralized crypto derivatives allows you to interact with the asset's movements without the need to directly possess it.

We see derivatives as a conjunction between P2P lending and Spot Swaps, which can be achieved by introducing/altering these parameters:

• Position. An ongoing agreement between two parties. Same as a loan in P2P lending, just with different terms.

• Shorting. Betting that asset price will go down, and getting benefit from it. Defined by position with specific rules, depends on Spot Swap pool ratios (price).

• Longing. Betting that asset price will go up, and getting benefit from it. Defined by position with specific rules, depends on Spot Swap pool ratios (price).

• Leverage. Multiplying the Spot Swap ratios with a multiplier specified by position initiator, stored in a position.

• Take profit. A parameter in position datum, which defines on what ratios (having leverage in mind), position can be liquidated. Liquidations will be performed by decentralized 3rd party bots for a small incentive fee, thus they will be instant for the end user. Ratios are supplied by Spot Swap.

• Stop loss. A parameter in position datum, which defines on what ratios (having leverage in mind), position can be liquidated. Liquidations will be performed by decentralized 3rd party bots for a small incentive fee, thus they will be instant for the end user. Ratios are supplied by Spot Swap.

By enhancing our current smart contracts with features defined previously, we arrive at a derivatives product.