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Key Concepts

Below are the foundational ideas behind Gryps’ trading model, written for readers new to perpetuals.

Perpetuals (No Expiry)​

Perpetuals are derivatives without expiration. You can hold a position indefinitely; profit/loss (PnL) is realized when you close. Pricing is kept close to spot via funding (see below).

Intent‑Based RFQ (How orders execute)​

Instead of a central order book, you broadcast your trading intent (direction/size/leverage). Multiple solvers competitively quote you a price. You accept the best quote; the trade is settled on‑chain through Symmio’s contracts. This design concentrates liquidity into executable quotes and minimizes idle, resting orders.

Cross‑Margin Collateral (Capital efficiency)​

Cross‑margin means a single pool of collateral (USDC) backs all of your open positions at once, instead of locking margin per position (isolated margin). Your unrealized PnL across positions is netted before risk checks, which makes capital use more efficient and reduces the chance of unnecessary liquidations.

  • Netting example: You are long 1 BTC and short 20 ETH. If BTC is down $200 and ETH is up $220, your account’s net UPNL is +$20. Risk checks (IM/MM) evaluate this net result, not each position in isolation.
  • Benefits: higher capital efficiency; fewer forced closes when one leg is temporarily adverse but the book is hedged overall.
  • Trade‑offs: because collateral is shared across positions, a large adverse move in one position can affect others. Manage leverage with account‑level health in mind.
  • Compared to isolated margin: isolated margin locks collateral per position; cross‑margin reuses collateral across all positions.

Funding (Keeps perps near spot)​

Funding is a periodic payment between longs and shorts designed to keep the perp price aligned with spot.

  • If the perp trades above spot (positive basis), funding is typically positive and longs pay shorts.
  • If the perp trades below spot (negative basis), funding is typically negative and shorts pay longs.

Mechanics (simplified): funding is computed over epochs/windows using the difference between the perp’s mark price and the index (spot) price.

Example: Suppose your 1 BTC long has mark price above index such that the hourly funding rate is +0.01%. Over 1 hour, you pay 0.01% of the notional to shorts. If notional = $50,000, funding = $5 for that hour. This is separate from your PnL and accrues while the position is open.

Mark price and index price are used to dampen manipulation and ensure fair funding. See Architecture for more detail on parameters and safeguards.

Note on timing: funding accrues each epoch and realizes as periodic balance adjustments. See High Level Architecture for epoch/window details.

Risk Controls (IM/MM, liquidation)​

  • Initial and maintenance margin requirements scale with leverage and market risk.
  • If account health breaches maintenance thresholds, positions can be liquidated to restore solvency.
  • Liquidation logic and CVA safeguards follow Symmio’s battle‑tested approach (details in Architecture).

Account Health​

Account health is a simple percentage that tells you how close you are to liquidation. If it drops too low, you risk being liquidated.

AccountHealth = (EquityBalance − MaintenanceMargin) / EquityBalance

Numeric example (end‑to‑end):

  • AllocatedBalance = $2,000; UPNL = −$150 → EquityBalance = $1,850
  • LockedMargin = $400; MaintenanceMargin = $300
  • AvailableForOrders = 1,850 − 400 − 300 = $1,150
  • AccountHealth = (1,850 − 300) / 1,850 ≈ 83.8%

Maintenance Margin (CVA)​

Your “security deposit.” If your equity falls to this level, liquidation can occur. It’s locked and non‑transferable while positions are open.

Equity Balance​

Your potential future account balance: EquityBalance = AllocatedBalance + UPNL (unrealized PnL).

Allocated Balance​

Funds you’ve designated to your cross‑margin account for trading. You can unallocate and withdraw after the fraud‑proof window.

Initial & Locked Margin​

Initial Margin is the capital required to open a new position. Locked Margin is the sum of margin tied across all active positions.

Available for Orders​

What’s left to trade after reserving safety buffers: AvailableForOrders = EquityBalance − LockedMargin − MaintenanceMargin

Solvers (Hedgers)​

Order Types (supported)​

  • Market: fill immediately at best available quote.
  • Limit: specify a price; order executes when a solver can meet it.
  • IOC/Post‑Only: immediate‑or‑cancel and post‑only behaviors adapted to RFQ (non‑resting until quote acceptance).

Take‑Profit / Stop‑Loss (TP/SL)​

Configure exits as price triggers; when hit, Gryps requests quotes to close your position accordingly (subject to liquidity and slippage).

Solvers submit executable quotes and may hedge inventory off‑chain. Gryps integrates Orbs’ solver network to promote competitive spreads, robust uptime, and fast fills, while settlement remains on‑chain.

Withdrawals & Proof Window​

Gryps uses a fraud‑proof window to ensure settlement integrity. Withdrawals finalize after 12 hours, allowing the system to verify balances before release.