Trading

Trading Frequently Asked Questions about Deri Protocol

How much gas is consumed to do things with Deri?

Deri protocol is reasonably gas-economic. Most of the actions cost around 100,000 gas per action. The most expensive action is trade-with-margin, a combined action of trade and post margin, that costs around 200,000 gas per action. If you are to trade frequently, it is encouraged to post sufficient margin to your position (i.e. your pToken) and carry out "simple trades" without adding/removing margin every time, which would cost around 100,000 gas per trade. If you do not have a clear sense about how much 100,000 gas is, this is for your reference: the minimum gas consumption of a single transaction on ETH blockchain is sending ETH, which costs 21,000 gas per transfer, while a common basic transaction like sending ERC20 token (e.g. USDT or DAI) costs around 40,000~60,000 gas. That is, a single operation with Deri consumes only around twice as much gas as a simple transfer of ERC20 token.

What is funding fee?

To balance the two sides of long and short positions, the pool will always apply a funding fee to the majority side. However, the algorithms of funding fees for Deri V1 and V2 are slightly different. Funding Fee of V1 For each ETH block, assuming the total number of contracts in a long position is L while that in a short position is S. Then every single long contract will pay a funding fee = FundingRate, per the following formula. Whereas every single short contract will receive a funding fee = FundingRate. FundingRate = r*NetPositionContractValue/PoolLiquidity =r*(L-S)*CurrentPrice*Multiplier/PoolLiquidity where r is the funding rate coefficient Please note that when L>S, FundingRate is positive (meaning long positions pay short positions), whereas when L<S, FundingRate is negative (short positions pay long positions). Funding Fee of V2 For each ETH block, assuming the total number of contracts in a long position is L while that in a short position is S. Then every single long contract will pay a funding fee = FundingRate*ContractValue, per the following formula. Whereas every single short contract will receive a funding fee = FundingRate*ContractValue. FundingRate = r*NetPositionContractValue/PoolLiquidity =r*(L-S)*CurrentPrice*Multiplier/PoolLiquidity where r is the funding rate coefficient, and ContractValue is ContractValue = CurrentPrice * Multiplier Please note that when L>S, FundingRate is positive (meaning long positions pay short positions), whereas when L<S, FundingRate is negative (short positions pay long positions). And please note the r of V2 is of a different dimension from that of V1.

Is the trading on Deri Protocol risk-free?

Trading Margins & Contracts on Deri Protocol includes but is not limited to - a high level of risk, and may not be suitable for all kinds of investors. The enormous degree of leverage can work in favor of you as well as against you. Before making the decision to invest using Deri Protocol, you should carefully consider your level of experience, investment objectives and risk appetite. There is a possibility that you may lose part of your investment or all of your initial investment. You should be aware of all the risks associated with trading contracts and margin. Deri Protocol will not be responsible for any losses, damages or claims arising from events falling within the scope of the events mentioned above. We urgently advise you not to invest money that you cannot afford to lose and we also recommend you to seek advice from an independent financial adviser, If you have any questions or doubts!