Trading & pricing

Synthetic positions#

A synthetic position is a contract-level exposure between a trader and the protocol's liquidity pool (the LP). No order is routed to another exchange and nothing is hedged elsewhere. Gains are paid by the LP; losses are retained by the LP.

Settlement price#

Every open, close and liquidation settles at the Binance USDⓈ-M index price for BTCUSDT or ETHUSDT: a weighted index across major exchanges, quoted in USDT, the same currency used for settlement. The shadowpaper price signer signs each index update. The relayer includes the signed price in the same transaction as the trade, and the contract verifies the signature and its freshness before settling. See Pricing: signed index.

Execution#

Signed trades are collected and submitted in one batch per block. Within a batch, closes are processed before opens. Each item succeeds or fails independently; a failed item does not block the rest of the batch. There is no order book, no partial fill and no slippage at any size.

Position rules#

Open-interest caps. Each market has a long-side cap and a short-side cap. An open that would exceed the cap is rejected. Caps are adjusted to the available LP cash.

Stale prices. If no fresh signed price is available for a market, nothing in that market settles: no opens, closes or liquidations. Settlement resumes at the first fresh price.

Example: opening a position#

Alice deposits 100 USDT and opens a 100× BTC long while the signed index price is 80,000.

notional = margin × leverage      = 100 × 100        = 10,000 USDT
size     = notional ÷ entry price = 10,000 ÷ 80,000  = 0.125 BTC
checks   : margin 100 ≥ 10 · notional 10,000 within [500, 10,000,000] · leverage 100 within [1, 1000]

The position passes every sizing rule and opens at 80,000; there is no fee to open and no spread on the entry price.