Someone asked: How do on-chain perpetual contracts work?
I usually answer like this: dYdX V4’s order book is maintained and matched off-chain by validators, and the trade results are then recorded on-chain. In the pool model, liquidity providers are the counterparties to traders: when traders make a profit overall, the pool loses money; when traders lose money overall, the pool makes money.
$HYPE 67.71 (-4.49%)
If there’s anything I haven’t covered, share it in the comments.
For informational purposes only, not investment advice.
I usually answer like this: dYdX V4’s order book is maintained and matched off-chain by validators, and the trade results are then recorded on-chain. In the pool model, liquidity providers are the counterparties to traders: when traders make a profit overall, the pool loses money; when traders lose money overall, the pool makes money.
$HYPE 67.71 (-4.49%)
If there’s anything I haven’t covered, share it in the comments.
For informational purposes only, not investment advice.