Rightsizing the Maximum Funding Rate of Perpetual Futures

Funded by dYdX Grants. There have been a number of occasions in dYdX v3 where the maximum funding rate has been insufficient to incentivize convergence between a perpetual market and its underlying. This has led to interventions such as increased initialMarginFraction and use of ‘close-only’ mode which hamper trader user experience. The proposal is to […]

Framework for Setting dYdX Margin Risk Parameters

Funded by dYdX Grants The lack of a consistent framework for setting margin parameters leads to ad hoc, adjustments and sub-optimal risk management.  Sub-optimal risk management means exchanges cannot scale as much as they potentially could. We provide a framework for orderbook perpetual futures exchanges to consistently set these parameters as a function of observed […]