All Perpetual Contracts will be settled and margined in USDC.
Traders will be able to trade on multiple Perpetual Contracts using a single margin account, allowing for dramatically increased capital efficiency while trading multiple pairs. Collateral is held as USDC, and the quote asset for all perpetual markets is USD. Each market has two risk parameters, the initial margin fraction and the maintenance margin fraction, which determine the maximum leverage available within that market. These are used to calculate the value that must be held by an account in order to open or increase positions (in the case of initial margin) or avoid liquidation (in the case of maintenance margin).
We are now offering up to 20× on Bitoro. While some centralized exchanges offer over 100× leverage, most traders trade using low double digit leverage at most, and traders are prone to losing funds quickly at such high amounts of leverage.
Trades are matched off-chain and held in batches, until the proof of the validity of the batch is submitted on-chain, where it lives permanently. This prevents front-running of trade settlement and allows for instantaneous balance updates without waiting for a transaction to be mined. Trading on Bitoro will feel every bit as fast as trading on a centralized exchange.
Given the performance improvements of the oracles, most underlying protocols will be able to offer lower margin requirements, which means both higher maximum leverage as well as lower penalties when liquidated. Accounts whose total value falls below the maintenance margin requirement may have their positions automatically closed by the liquidation engine.
Asset prices on Bitoro come from decentralized on-chain oracles such as Chainlink or MakerDAO, via the underlying protocols, and are used to determine the collateralization of your account. These prices are fed to the Bitoro smart contracts through price oracles that run on Ethereum.
We take the security of our smart contracts extremely seriously. We’ve conducted rigorous internal testing and contracted an independent top security firm to perform a thorough audit of our smart contracts. Our audit will be open-source, and verifiable by anyone. Further, our track record speaks for itself: No users have ever lost funds on Bitoro.
With cross margining and increased scalability, we will be able to launch many more markets on Bitoro. We plan to launch 10+ new Perpetual Contracts over the course of 2023. We are focused on listing the most traded cryptocurrency pairs by volume.
We anticipate a rise in popularity of DEXs for margin and perpetual markets, in addition to their already popular spot products. Although adoption of decentralized margin and perpetuals takes time, we believe DEXs will gain market share over centralized exchanges due to their user-friendly onboarding processes, improved UI/UX, heightened security guarantees, and appealing product offerings. Bitoro, a platform that merges the security and transparency of DEXs with the speed and usability of CEXs, aligns with this trend. Ultimately, we believe that DeFi will surpass traditional finance technology only if the user experience and design are exceptional.