Understanding Intent Based Trading
At the core of Star Perps lies an intent-based trading system that eliminates the need for traditional order books, virtual automated market makers (vAMMs), or pre-locked liquidity pools. Instead, our protocol operates through an innovative mechanism that pairs traders with counterparties, ensuring a seamless, capital-efficient trading experience.
Key Principles of Intent-Based Trading
No Order Books: Star Perps removes the complexities of order books, creating a more streamlined and direct trading process.
No Virtual AMMs: By avoiding the vAMM model, we eliminate reliance on liquidity pools and allow for a more flexible and dynamic trading environment.
No Pre-Locked Liquidity: With Star Perps, there’s no need for upfront liquidity commitments, enhancing capital efficiency for all parties involved.
How It Works
Formulate and Send Your Intent As a user (referred to as Party A), you begin by submitting your "intent" to the Star Perps platform. This intent expresses your desire to enter into a trade, whether it's longing or shorting an asset.
Matching with a Hedger (Party B) After submitting your intent, it is visible to counterparties, also known as Hedgers (referred to as Party B). Hedgers review intents and choose whether to accept and match your trade.
Dynamic Counterparty Selection Star Perps utilizes third-party frontends and drivers to assist you in selecting the best possible hedger for your trade. These tools optimize the matching process, ensuring that you get the best counterpart for your specific trade needs.
What is an "Intent"?
An Intent is the core element of every trade. It represents a user's request to enter into a position, either as a long or short, and is seen by all available Hedgers on the network. Once accepted, the trade is initiated.
Sent by User (Party A): The trader expresses their desire to open a position.
Accepted by Hedger (Party B): One or more Hedgers accept the intent and become the counterparty for the trade.
Trade Lifecycle
Trade Formation: Once a Hedger accepts your intent, they officially become your Party B. This pairing forms the basis of the trade, and both parties take opposite positions. For example, if Party A goes long on 1 BTC, Party B automatically shorts 1 BTC. The profit of one party equals the loss of the other, ensuring symmetry and fairness.
Monitoring & Solvency: Throughout the trade, watchdogs (automated monitors) ensure that both parties maintain solvency and play by the protocol's rules. If either party becomes insolvent, an automatic liquidation occurs to protect the system and participants. This trustless liquidation mechanism ensures the security and capital efficiency of the entire trading process.
Closing the Trade: The trade remains open indefinitely until one of the parties decides to close the position or insolvency triggers liquidation.
Symmetrical Trading Model
Star Perps employs a symmetrical trading model where each trade is isolated between Party A and Party B. There are no liquidity pools involved, and every trade is self-contained, ensuring that:
Each party's position is clearly defined (long for A, short for B).
The capital efficiency is maximized, as no additional liquidity is locked in pools.
The system is highly scalable, allowing for infinite Party A/B pairings without the need for complex liquidity management.
Capital Efficiency and Security
By eliminating the need for pre-locked liquidity and enabling on-demand counterparty matching, Star Perps offers traders unmatched capital efficiency. The automated solvency checks and liquidation process ensure that trades are safe and operate in a trustless manner, making Star Perps a robust and secure platform for perpetual futures trading.
What’s Your Next Intent?
With Star Perps’ intent-based system, every trade is designed to be efficient, secure, and tailored to your needs. The unique architecture of our platform allows you to focus on trading, while the protocol takes care of liquidity, counterparties, and risk management.
Are you ready to set your next intent? Dive into Star Perps and experience the future of decentralized trading.
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