KRAV Quanto

A General Overview of KRAV's Quanto Perpetual Features and Architecture.

Overview: KRAV Trade is at the forefront of cryptocurrency innovation, functioning as a next-generation quanto exchange deployed across various blockchain platforms. This platform redefines the use and markets of altcoins by introducing unique trading mechanisms and liquidity options.

Trading

  1. Perpetual Futures Contracts Using Altcoins as Collateral

    • Central to KRAV’s innovation are its perpetual futures contracts which enable speculations on Bitcoin (BTC) price movements using any altcoin as collateral.

  2. Leverage and Market Exposure

    • KRAV permits the use of leverage to enhance trading outcomes. This feature intensifies the influence of price fluctuations on profit and loss (PnL), escalating both potential gains and losses.

    • Through leverage, the exposure of the altcoin collateral to the desired asset is magnified, allowing altcoin holders to gain greater exposure.

  3. Profit and Loss (PnL) Mechanics

    • All trading on the platform ensures that PnL is linked directly to BTC’s price movements (or other assets being speculated on), regardless of the altcoin used as collateral.

    • A fixed exchange rate between the altcoin and USD value is established when a position is opened and maintained until it is closed, ensuring that PnL settlements are unaffected by the market price volatility of the collateral altcoin. Instead, the asset appreciation in USD is the direct determinant for PnL in units of altcoins.

Liquidity Pools

  1. Single-Token Altcoin LPs (Breakthrough Yield Earning)

    • Unique to KRAV are its single-token liquidity pools that require only one type of altcoin, facilitating easier management and participation (no impermanent loss, no pairs).

    • The liquidity pools are isolated for each altcoin and facilitates trading liquidity for any given altcoin as collateral, given payouts or losses are in the same altcoin.

    • Liquidity provision to each pool results in Real Yield earning from fees generated from trading volume using said altcoin as collateral.

    • Users may join existing pools, or create their own ones - and start earning yield today!

  2. Risk Management

    • To mitigate risks associated with trading and liquidity provision, KRAV implements several proactive measures:

    • A dynamic funding rate adjusts based on open interest to help balance balance of longs and shorts.

    • A price impact mechanism skews the opening prices of trades to manage potential net PnL effects, thereby incentivizing a balanced approach to position taking.

Benefits and Market Impact

  • Breakthrough Altcoin Yield Earning Strategies

    • KRAV’s liquidity pools provide unique real yield opportunities derived from trading fees for virtually any altcoin.

  • Revolutionizing Altcoin Utility

    • Use any altcoin to gain exposure to BTC, reducing the high opportunity cost associated with altcoin hodling, or start earning yield.

  • Improving Altcoin Capital Efficiency

    • Rather than simply letting altcoins collect dust on the shelf, altcoins may now be actively engaged in trading and yield earning strategies.

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