Perpetual Contracts
OrangeBit offers perpetual contracts, a derivative product that allows users to trade underlying assets (such as BTC, ETH, or other supported tokens) with leverage, without an expiry date. Unlike traditional futures, perpetual contracts do not have settlement dates, enabling continuous trading and long-term position management.
OrangeBit perpetual contracts combine DeFi-grade security with CEX-level performance, leveraging a hybrid architecture that balances on-chain asset custody and off-chain high-speed matching.
Key Features
Continuous Trading
Positions can be held indefinitely, as long as margin requirements are met, enabling traders to implement long-term hedging or speculation strategies.
Adjustable Leverage
Users can magnify potential gains or losses with leverage ranging from 1x to 100x. Leverage is set per position, with dynamic margin requirements tracked on-chain.
Hybrid Settlement
User assets remain under wallet control or in smart contract vaults. The OrangeBit matching engine executes trades off-chain with low latency and deep liquidity, while all profit and loss (PnL) is reflected on-chain via smart contracts, ensuring transparency and verifiability.
Isolated vs. Cross Margin
Isolated Margin: Margin is limited to a specific position; liquidation affects only that position.
Cross Margin: Full account balance shares margin across multiple positions; maximizes capital efficiency while increasing risk.
Funding Rate Mechanism
Funding rates are periodically calculated and exchanged between long and short positions to maintain parity with the spot price, incentivizing price convergence with the underlying asset.
Trading Example
Opening a Long Position (Buy)
The user selects the contract, order type (limit or market), position size, and leverage. For a limit order, execution occurs at the specified price or better. Market orders execute immediately at the current market price. Users confirm the order through the OrangeBit interface, optionally reviewing estimated fees and potential slippage. The executed position is recorded on-chain while mirrored off-chain for real-time trading.
Closing the Position (Sell)
The user can close the position via a limit or market sell order. Profit and loss is calculated and reflected in the user’s wallet immediately. Take-profit or stop-loss triggers can also be set for automated risk management.
Fees and Slippage
Taker Fee: Charged when removing liquidity from the order book (e.g., market orders).
Maker Fee: Charged when providing liquidity via limit orders.
Funding Payments: Periodic payments between longs and shorts maintain contract price alignment.
Slippage may occur for large market orders or during high volatility. OrangeBit allows users to set maximum acceptable slippage in the order confirmation window.
Interface and Order Confirmation
Display an order summary popup showing position size, leverage, estimated fees, and potential slippage.
Allow users to set maximum slippage tolerance to reduce unexpected PnL impact.
Highlight real-time margin usage, estimated liquidation price, and available collateral.
Provide clear confirmation buttons, e.g., “Confirm Long Position” / “Confirm Short Position,” to prevent accidental trades.
Risk Management
Automatic Liquidation: Positions are automatically closed if margin falls below maintenance levels.
Partial Liquidation: Closes only the necessary portion of the position to reduce cascading liquidations.
Insurance Fund: An on-chain insurance pool covers rare losses exceeding margin balances.
Benefits for Users
Non-Custodial Security: Users maintain full control of funds; OrangeBit cannot move assets without authorization.
CEX-Level Execution: Fast order matching, low latency, and deep liquidity support professional trading.
Transparent Risk Management: Liquidation events, funding payments, and PnL settlements are fully auditable on-chain.
Flexible Trading Strategies: Supports long/short, hedging, and leverage-based strategies.
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