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Hybrid Liquidity Engine
Both our "Multi-Asset Liquidity engine" and "Synthetic Liquidity engine" are Peer to Pool model and it allows users to take a position on/against the market while the pool serves as the counterparty, all liquidity provider to the pool shares the PnL and fees accumulated from users. When the open interest exceeded the value locked for the engine, users will not be able to open new positions.
This model takes native tokens as collateral and tokens can open long positions to their tokens only( BTC token can only be used to long BTC), and USD stables can open short positions only. Any other collateral used to open a position will be swapped to the respective token they are trading with (e.g. opening a 50x Long on ETH with $1000Usdc will first swap the collateral into $1000 equivalent of ETH, then opening up the position)
Whenever users take a long position on a market, the equivalent amount of tokens to the position size is reserved to payback to the trader when the position is closed (e.g. When opening a 10 ETH long, 10 ETH in the vault will be reserved and "utilized". So if the trader closes the position in profit, the profit will be paid towards the trader from the utilized ETH and the rest goes back to the pool).
Conversely when users take a short position on a market, the equivalent amount of USDC will be reserved and "utlilzed" before the close the position.
This model takes USDC stablecoin as collateral only for all users to take any positions on any market. Since LP is no longer limited to a particular market thus it makes more capital efficient, it also opens up a lot of market opportunities which the other model can not enable since not all coins can be included in a ‘crypto index product’. However this engine can not support swapping because it only takes USD stables as collateral.
This model holds both token assets and USDC stablecoin in the pool. Lenders can create lending pools for a trading pair by depositing the token and USDC stablecoin. If a trader wants to take a long position, he would need to borrow stablecoin from that lending pool swapping into the specific asset using the liquidity from DEX, including 1inch, Uniswap, likewise if the trader wants to take a short position, he would need to borrow the token and swapping back to stablecoins. Thus liquidity providers for this engine does not bare the risk of traders' PnL.