KIP-117: Quanto Perpetuals

Simple Summary

Build a quanto ("quantity adjusted") perpetual futures market: Quanto Perpetuals.

Abstract

Develop a derivatives market compliant with Synthetix v3 that enables Kwenta traders to retain ETH exposure while engaging in perpetual futures contracts trading.

Motivation

Perpetual Futures on Kwenta currently requires the use of sUSD for trading as all trades are settled in USD.

Many prospective Kwenta traders are likely hindered from trading with their portfolios being composed mostly of ETH or because of the perceived inflationary and exchange rate risks associated with USD.

Quanto Perpetuals offer traders the opportunity to use ETH (in the form of synthetic “snxETH”) as collateral, allowing them to maintain ETH exposure while trading other assets and effectively mitigating the inflationary and exchange rate risks associated with USD. The difference between quanto products and other multi-collateral products is the fixed exchange rate nature. With multi-collateral, a trader takes on the exchange rate risk between the collateral and the settlement asset (for example ETH/USD price risk). This is because ETH is purchased back at the market price when a trade is settled. With quanto, profits (or losses) are exchanged back to ETH with a fixed exchange rate determined at entry protecting traders from exchange rate risk.

Specification

For more information, visit the: Kwenta State Log