Platform Mechanics
NAVIGATOR is a decentralized exchange allowing trading without the need for a username or password. The platform uses an aggregate price feed which reduces the risk of liquidations from temporary wick
Liquidation
The liquidation condition of the smart contract at which a liquidation event can be triggered takes into account accrued fees, collateral and PnL. It is as follows:
The price at which liquidation occurs is a function of position size, average entry price, collateral, accrued fees (which include closing/funding/borrowing), and a liquidation threshold which is defaulted to be 0.99 - this threshold is put in place to act as a built-in safety net to protect the protocol from losses on a position exceeding collateral.
If liquidated the trader will lose all of the collateral in their position.
For example, assume a 10,000 long position on BTC/USD with 1,000 USD collateral and an entry price of 28,000. Assume the trader has held this position for a few days and has accrued total fees of $30.00. The corresponding deltaLiqPercent is 9.60% and the liquidation price would be 25,312.
Due to the borrowing & funding fees, your liquidation price will change over time, especially if you use high leverage and have the position open for more than a few days, so it is important to monitor your liquidation price.
Liquidation Bounty
Besides the fee manager wallet, it is also possible for any 3rd party to trigger a qualifying liquidation. A bounty is put in place to incentivize liquidations to ensure they trigger in a timely matter (ie: liquidation is triggered before the remaining 1% of position collateral is lost due to rapid price movement). The wallet to first liquidate the position will receive up to 10% of the total lost collateral if Mummy's bot goes down or does not trigger in time.
Open Interest Limits
As a risk management tool, there are Open Interest (OI) limits per user as well as for each asset and direction. OI limits for both Longs and Shorts are established to protect the protocol from total OI exceeding TVL (in this case NLP backed liquidity). These limits, for each tradable asset, will be manually adjusted over time as TVL increases.
Profit Limits
In order to further protect the vault, we have put limits (maxProfitPercent) into place per asset for how much any one trade can profit. Each tokens will have different Max Profit Percent (MPP). See the MPP table below for more information.
In the event that one's profit exceeds MPP of the token, then the position will be forced closed.
Example:
Total USD of NSLP in the Vault is $2,400,000
Max profit percent = 0.1%
User profit = $3,000
Max allowable profit = 2,400,000 * 0.1% = $2,400
Therefore, user profit > max profit and the position is forced closed. The exeeded profit will be sent back to the NSLP vault.
11
BTC
3
12
ETH
3
13
LINK
3
14
XRP
3
15
BNB
3
16
OP
3
17
SOL
3
18
ARB
3
19
ORDI
3
20
SUI
3
21
PEPE
3
22
S
3
23
TRUMP
3
24
MELANIA
3
25
AIXBT
3
26
ANON
3
27
BERA
3
28
LTC
3
29
ADA
3
30
HYPE
3
31
KAITO
3
32
stS
3
33
FARTCOIN
3
34
SHADOW
0.1
35
VIRTUAL
3
36
NEAR
3
37
TIA
3
38
PENGU
3
400
GMCI30
3
401
GML2
3
402
MSTR
3
403
TSLA
3
404
AAPL
3
405
GOOGL
3
406
NVDA
3
407
NDAQ
3
408
DIA
3
409
SPY
3
410
AMZN
3
411
META
3
412
MSFT
3
500
EUR
3
501
XAU
3
502
GBP
3
503
XAG
3
504
AUD
3
505
NZD
3
506
CHF
3
507
CNH
3
508
JPY
3
509
WTI1M
3
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