Margin Trading
Unstoppable DEX offers an alternative to the common margin trading practices found in most exchanges. Instead of relying on derivatives like perpetual contracts, our platform utilizes actual asset trades. This approach aligns more closely with the market's real-time conditions, avoiding the pitfalls of derivative-based trading.
Key Features
Leveraged Spot Trading: Utilizing real assets for leverage, trades are executed directly in the spot market, tapping into deep liquidity pools of existing DEXs for optimal pricing.
100% Asset-Backed Trades: very position is fully backed by on-chain assets, ensuring transparency and security.
Aligned Interests: Our system aligns traders and lenders, avoiding zero-sum scenarios and aiding spot market price discovery.
No Position Limits: We aren't limited by open interest caps and punishing funding rates, allowing greater flexibility for traders.
Dynamic Borrowing Rates: Interest rates for borrowing adjust in real-time, reflecting market utilization.
The Unstoppable Margin DEX is currently in Early Access.
Want to try it? Sign up here: https://forms.unstoppable.ooo/waitlist
Getting Started
Deposit to the Margin Engine
Before opening trades, users must deposit assets to the Margin Engine. The Margin Engine takes care of managing and monitoring positions. Users can withdraw their account balances at any given time, if those funds are not currently utilized in an open order.
At the moment, the following assets can be deposited to the Margin Engine:
| Ticker | Contract ID |
|---|---|
wETH* | |
USDC | |
wBTC |
*ETH can be deposited and will be wrapped to wETH automatically
Opening Orders
Users can place limit or market orders with their desired leverage on the Unstoppable Margin DEX. Here's a more detailed breakdown of the process:
Order and Asset Type Selection: Users choose the asset they want to take a position in and decide between a limit order (which executes at a specified price or better) or a market order (which executes at the current market price).
Leverage Selection: Users select their desired leverage level for the position. The higher the leverage, the greater the potential profits and risk of liquidation.
Order Confirmation: Upon confirming the order details, the Margin Engine steps in to facilitate the borrowing of funds to leverage the trade.
Funds Borrowing: The Margin Engine borrows the necessary funds from the lending pool to open the position. The amount borrowed is determined by the user's selected leverage and the total order size.
Collateral Management: The user's deposited assets serve as collateral for the borrowed funds. The Margin Engine locks up the required collateral and maintains it throughout the life of the position.
Order Execution: The Margin Engine executes the order in the underlying spot market, ensuring the best possible price for the user. By tapping into the deep liquidity pools of the deepest spot markets, the Unstoppable Margin DEX offers efficient and cost-effective trade execution.
Continuous Monitoring: Once the position is open, the Margin Engine continuously monitors it to ensure the leverage ratio remains within permissible limits. This involves real-time tracking of the position's value and the user's collateral.
Position Management: Users have the flexibility to manage their open positions in several ways:
Partial Closure: Users can choose to close a portion of their position, reducing their exposure and locking in profits or limiting losses.
Collateral Addition: Users can add more collateral to their position, effectively reducing the leverage ratio and decreasing the risk of liquidation.
Full Closure: Users can close their entire position at any time, settling the trade and reclaiming their collateral (minus any fees or interest).
Liquidation Prevention: If the market moves against the user's position and the leverage ratio approaches the permissible limit, the Margin Engine will alert the user and may initiate a partial liquidation to bring the leverage ratio back within acceptable levels. This helps protect the user's collateral and the stability of the platform.
By leveraging the power of smart contracts and real-time monitoring, the Unstoppable Margin DEX provides a seamless and secure trading experience for users seeking to trade with leverage in the spot market.
Cross-Collateral Trading
Cross-Collateral is a unique feature offered by the Unstoppable Margin DEX that allows traders to use the same asset they're trading as collateral. This means you can open leveraged positions without having to use a different asset, such as stablecoins, as collateral.
Benefits of Cross-Collateral Trading
Increased Flexibility: Cross-Collateral enables you to trade with leverage using the assets you already hold, without the need to convert them into other assets.
Increased Exposure: By using the same asset as collateral, you can maintain your exposure to the asset you're trading, potentially benefiting from its price appreciation.
Streamlined Trading: Cross-Collateral simplifies the trading process by eliminating the need to manage multiple assets for collateral purposes.
How It Works
Long Positions: Traditionally, when opening a long position on an asset like ETH, you would need to use a stablecoin like USDC as collateral. With Cross-Collateral, you can directly use your ETH holdings as collateral, allowing you to maintain your exposure to ETH while trading with leverage.
Short Positions: When opening a short position, you typically need to hold the asset you're shorting. However, with Cross-Collateral, you can use stablecoins as collateral instead, reducing your direct exposure to the asset you're shorting.
Stop Loss & Take Profit Orders
Stop Loss (SL) and Take Profit (TP) orders are essential risk management tools that allow you to automatically close your positions when certain price conditions are met. On the Unstoppable Margin DEX, you can set up these orders easily and flexibly.
Customizable Order Size
With the Unstoppable Margin DEX, you have full control over the size of your SL and TP orders. You can set different percentages of your total position size to be closed at each price point. This allows you to create more complex risk management strategies tailored to your needs.
Automated Execution
Once you've set up your SL and TP orders, the Margin Engine will continuously monitor the market price. When the specified price conditions are met, the Margin Engine will automatically execute the orders on your behalf. You don't need to worry about manually closing your positions or constantly watching the market.
Seamless Settlement
After your SL or TP orders are executed, the Margin Engine will automatically settle the trades and return any realized profits or remaining collateral back to your Unstoppable Margin DEX account. You can then use these funds to open new positions or withdraw them as you see fit.
Setting Up SL & TP Orders
When Opening an Order: You can set up SL and TP orders right when you open a new position. Simply specify the price levels at which you want your SL and TP orders to trigger.
Managing Existing Orders: If you already have an open position, you can add or modify SL and TP orders at any time by managing your position in the 'Open Positions' overview.
Example: Let's say you have an open long position on ETH with a total size of 10 ETH. You could set up the following SL and TP orders:
Stop Loss: Close 100% of the position (5 ETH) if the price drops below $3,500.
Take Profit 1: Close 50% of the position (2.5 ETH) if the price reaches $4,000.
Take Profit 2: Close the remaining 50% of the position (2.5 ETH) if the price reaches $4,500.
With these orders in place, the Margin Engine will automatically manage your position based on the specified price levels, helping you limit your potential losses and lock in profits when the market moves in your favor.
SL and TP orders on the Unstoppable Margin DEX provide a powerful and flexible way to manage your risk and automate your trading strategies.
Soft Liquidation
Unstoppable employs a unique soft liquidation mechanism to manage positions that exceed the permitted leverage ratio. Unlike traditional platforms that often liquidate entire positions at once, our system incrementally liquidates a position until the leverage ratio is brought back within acceptable limits.
This approach offers several benefits:
Collateral Preservation: Soft liquidations aim to minimize the impact on traders by liquidating only a portion of the position, giving the market a chance to recover and potentially preserving some of the trader's collateral.
Lender Protection: By promptly addressing high-risk positions, the soft liquidation mechanism helps to safeguard lenders' funds and maintain the stability of the platform.
Open Market Execution: Liquidations are executed on the open market, ensuring a fair price discovery process and reducing the risk of manipulation.
To learn more about how soft liquidations work and see a detailed example, please visit our Soft Liquidations page.
Borrow Rate
The Unstoppable Margin DEX employs a dynamic borrow rate system that adjusts based on the current market demand for borrowing. As a trader, understanding how the borrow rate works can help you make informed decisions when using leverage.
How the Borrow Rate works:
Market-Driven Rates: The borrow rate is directly tied to the lending pool's utilization rate. As more traders borrow funds to open leveraged positions, the borrow rate increases, reflecting the higher demand for borrowing.
Real-Time Adjustments: The borrow rate is calculated and adjusted in real-time, on a per-block basis. This ensures that the rates you pay for borrowing are always competitive and reflective of the current market conditions.
Balancing Supply and Demand: When borrow rates are high, it attracts more lenders to supply assets to the lending pool. This helps to balance the utilization rate and ensures that there are sufficient funds available for traders to borrow.
Impact on Traders
Cost of Leverage: The borrow rate directly impacts the cost of opening and maintaining leveraged positions. Higher borrow rates mean you will pay more in interest over time, while lower rates can make leveraged trading more cost-effective.
Risk Management: When planning your trades, it's essential to factor in the potential impact of borrow rates on your overall profitability. Be aware that borrow rates can fluctuate based on market conditions, so it's crucial to monitor these rates and adjust your strategies accordingly.
Liquidation Risk: Higher borrow rates can also increase the risk of liquidation, as the interest paid on borrowed funds can accumulate more quickly. Make sure to maintain sufficient collateral and keep an eye on your position's health to avoid unexpected liquidations.
Benefits for the Ecosystem
While dynamic borrow rates may seem like an additional cost for traders, they play a crucial role in maintaining a healthy and sustainable trading ecosystem on the Unstoppable Margin DEX.
Incentivizing Lenders: Attractive borrow rates encourage lenders to supply assets to the platform, ensuring that there is sufficient liquidity available for traders to borrow.
Balancing Risk and Reward: By adjusting rates based on market demand, the system helps to balance the interests of traders and lenders, ensuring that both parties are fairly compensated for their participation.
As a trader on the Unstoppable Margin DEX, understanding how the dynamic borrow rate system works can help you make more informed decisions when using leverage. By factoring in the impact of borrow rates on your trading costs and strategies, you can better manage your risk and optimize your potential returns.
Fee Structure
| Action | Execution Fee | Recipient |
|---|---|---|
Opening Trades | 0.1% | $UND / $eUND Stakers |
Closing Trades | Free | -/- |
Soft Liquidation | 1.0% | $UND / $eUND Stakers Third Party Liquidators |
*Fee policies are flexible to maintain ecosystem health and balance.
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