Asymmetric impact · shadowpaper Docs

Winning closes are scaled by a factor that depends only on the size of the price move; losing closes are never adjusted.

All trades settle at an index mid-price with no spread or slippage, which favours traders. The protocol offsets this only on winning closes, through an asymmetric impact adjustment: a haircut that depends on the size of the price move and never on position size. Losses are never haircut.

Step 1: deadband#

The exit is treated as 0.2 bp (entry ÷ 50,000) less favourable. A win smaller than that pays zero; the margin is returned.

Step 2: holdback band#

For raw moves between 0.75 bp and 6 bp, the move is reduced further along a smooth curve, by at most about 1.2 bp (near a 3.4 bp move). One standard curve applies at all hours.

Step 3: impact scale#

The remaining gain is multiplied by a scale factor:

scale = (1 − baseRate) / (1 + 1 / (move × rateMultiplier) + referenceNotional / (10⁶ × move × positionMultiplier))

← Scroll sideways for long formulas

movePrice move after Steps 1–2, as a fraction of entry

baseRate10%; caps the scale at 90%

rateMultiplier15,000

referenceNotional100,000

positionMultiplier814.598 (BTC), 483.979 (ETH); a per-market constant, not the position size

The scale never exceeds 90% and approaches it as the move grows.

BTC move	Scale at that move
0.1%	≈ 75.7%
1%	≈ 88.3%
5%	≈ 89.7%

Step 4: win fee#

A 2% win fee is deducted from the scaled gain.

Example#

Alice holds a BTC long with 100 USDT margin at 100× leverage (10,000 USDT notional), entered at 80,000. The table shows her result for four exit prices.

BTC move	Raw gain	After deadband	Scale	Scaled gain	Win fee	Net profit
+0.1%	10.00	9.80	0.7542	7.39	0.15	7.24
+0.5%	50.00	49.80	0.8670	43.18	0.86	42.31
+1%	100.00	99.80	0.8832	88.15	1.76	86.38
+5%	500.00	499.80	0.8966	448.12	8.96	439.16

+1% case (exit 80,800):
deadband     = 80,000 / 50,000                          = 1.6
move         = (800 − 1.6) / 80,000                     = 0.998%
gain         = 10,000 × 0.998%                          = 99.80 USDT
scale        = 0.9 / (1 + 1/(0.00998 × 15,000)
                    + 100,000/(10⁶ × 0.00998 × 814.598)) ≈ 0.8832
scaled gain  = 99.80 × 0.8832                           ≈ 88.15
net profit   = 88.15 × 98%                              ≈ 86.38 USDT

← Scroll sideways for long formulas

Small moves retain the least of the raw gain; beyond roughly 1%, close to 90% of the move is retained, regardless of position size.