Introduction

The Pioneer Quanto Perpetual Futures Protocol

A Quanto BTC/USDT contract is a type of perpetual futures contract where the collateral or margin (altcoins), used to speculate on Bitcoin, is a different currency that the currency used to value Bitcoin (USDT). PnL is settled in units of the altcoin used as collateral, with PnL based directly on the change in Bitcoin price in USDT, regardless of changes in altcoin collateral value. A conversion factor, or exchange rate is set when a position is open between USDT and the Altcoin, and does not change for the duration of the Perpetual future. This fixed exchange rate effectively acts as a multiplier, such that the percent change of Bitcoin price in USDT directly proportionally determines PnL in altcoin units.

What is KRAV

Arthur Hayes pioneered quanto perpetual futures, and perpetual futures in general, with his suite of innovative financial products on BitMEX. As the first decentralized quanto perpetual futures protocol, KRAV seeks to take the utility of quanto perpetual futures and apply it to all on-chain altcoin markets. Rather than using traditional financial derivative contracts, KRAV is a collection of smart contracts allowing anyone to leverage their altcoin tokens as collateral in perpetual futures contracts to gain leveraged exposure to other BTC and other assets, or LP their altcoins in order to gain real yield.

Key Aspects of KRAV Quanto:

• Collateral: This is the altcoin token you use as collateral to open up the BTC perpetual future You can choose to leverage the collateral, from 2x to 200x to gain as much exposure as you want.

• PnL (Profit and Loss): Your earnings or losses are settled in units of the altcoin you used as collateral. The amount you win or lose depends directly on how much Bitcoin's price in USDT goes up or down.

• Liquidity Pools: Permissionless single token liquidity pools for each altcoin accepted as collateral, facilitating trading liquidity. Each single token pool earns real yield from trading fees. Join existing LPs, or create a whole new altcoin collateral market.

In simple terms, you're making a bet on Bitcoin's price movement using an altcoin as collateral, but your payouts in the collateral currency is solely based on BTC price movements in USDT.

Quanto provides a paradigm shift for altcoins: the ability to gain controlled exposure, and the ability to earn real yield. Up until recently, these use cases were largely isolated to a small basket of bluechip and stablecoin tokens. Through Quanto, KRAV seeks to provide these ground breaking use cases to virtually every altcoin.