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.

  • Leveraged Spot Trading: Utilizing real assets for leverage, trades are executed directly in the spot market, tapping into deep liquidity pools for optimal pricing.

  • 100% Asset-Backed Trades: Every position is fully backed by on-chain assets, ensuring transparency and security.

  • Aligned Interests: Our system aligns traders and liquidity providers (LPs), 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

Deposit to the Margin Engine

Before opening trades users have to deposit to the Margin Engine. The Margin Engine takes care of effectively 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 following assets can be deposited to the Margin Engine

*ETH can be deposited and will be wrapped to wETH automatically

Opening Orders

After depositing into the Margin Engine, users can initiate a limit or a market order in the available markets. Here's how the process unfolds:

  1. Order Placement: The user selects the desired market and specifies the order type – limit or market with the desired leverage. The limit order is set at a predefined price, while the market order is executed at the current market price.

  2. Borrowing Mechanism: Upon order confirmation, the system borrows the total order amount from the liquidity pool, depending on the user’s collateral and the chosen level of leverage. The Margin Engine then keeps the user's collateral as security.

  3. Execution and Monitoring: The order is then executed in the underlying spot market. The Margin Engine continuously monitors the position, ensuring that the leverage ratio remains within the permissible limits.

  4. Position Management: The user can manage the position by partially closing it, adding more collateral to reduce the leverage ratio, or closing the position as a whole. If the market moves against the position and the leverage ratio exceeds the limit, a liquidation process is initiated.

This streamlined process allows for efficient trading while maintaining a focus on security and leverage management.

Cross-Collateral Trading

Cross-Collateral enables traders to utilize the same asset they're trading as collateral, enhancing their trading leverage without the need to convert into stablecoins or other assets. This method offers increased flexibility and efficiency, streamlining the trading process by eliminating the necessity for multiple asset types as collateral.

Traditionally, for a long position on ETH, traders need to use stablecoins like USDC for collateral. Unstoppable's Cross-Collateral feature, however, allows direct use of Ethereum as collateral, enabling traders to leverage their existing ETH holdings. This feature allows traders to maintain maximum exposure to their long positions.

Similarly, for short positions, where traditionally one would need to hold the asset they're shorting, Unstoppable permits the use of stablecoins as collateral, reducing direct exposure to the asset being shorted.

Stop Loss & Take Profit Orders

Users can set up both Stop Loss and Take Profit orders when opening an order or any time by managing the order. Users can add as many SL and TP orders as they want and set variable percentages of the order size to close at any given price point.

The Margin Engine will automatically execute these trades when the price condition is met and return the amounts back to user account.

Liquidation

When an order on Unstoppable:DEX exceeds the permitted leverage ratio, the Margin Liquidation Engine becomes operational. This process is automated and is designed to minimize risk for both the trader and the platform. Here's how it functions:

  1. Monitoring Leverage Ratio: The system continuously monitors each open position's leverage ratio in real time.

  2. Trigger for Liquidation: If the leverage ratio of any position crosses the predefined threshold, it triggers the liquidation process.

  3. Liquidation Process: The Margin Liquidation Engine automatically initiates the sale of the trader's position in the market. This is done to reduce the leverage back to a safe level, and to ensure that the borrowed funds can be repaid.

  4. Recalculating Position: After liquidation, the trader's position is recalculated, including any remaining collateral and adjustments for liquidation fees, if applicable.

  5. Return of collateral: Any excess collateral that is left over after the liquidation process will be returned to the trader's Margin Engine account.

This automated system ensures the stability of the platform and protects liquidity providers from excessive risk due to highly leveraged positions.

Borrow Rate

The Unstoppable Margin DEX implements a dynamic borrow rate system for traders and liquidity providers when they engage in leveraged trading. This rate is intrinsically linked to the liquidity pool’s utilization rate, meaning it's responsive to changes in borrowing demand:

  • Demand-Responsive Rate: As borrowing demand escalates, the interest rate correspondingly increases. This mechanism ensures a fair compensation for liquidity providers (LPs) commensurate with the risk involved.

  • Incentivization and Balancing: High borrow rates act as a signal, incentivizing new LPs to add liquidity. This addition helps in balancing the utilization rate and can lead to a reduction in borrow rates, benefiting traders.

  • Real-Time Adjustment: The rate is computed and adjusted in real-time, on a per-block basis, ensuring up-to-date and competitive conditions for trading.

  • Ecosystem Contribution: Through these borrow rates, traders not only access necessary funds for leveraging but also play a crucial role in maintaining the health and sustainability of the ecosystem.

This system is designed to strike a balance between the needs of traders for accessible leverage and the requirement of LPs for appropriate risk compensation, thus promoting a healthy and efficient trading environment.

Fee Structure

*Fee policies are flexible to maintain ecosystem health and balance.

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