Market Maker

Market makers provide trading depth for both long and short traders and earn the value of the platform net position by managing positions.

Benefits of Market Makers

• Single asset (BUSD) farming pools

• System funding fees

• Make profits by hedging

Risk Exposure of Market Makers

MMs provide liquidity on the SakePerp system and assume net position risk. MM is the core participant of the SakePerp system. SakePerp protocol use vAMM mechanism to reduce the risk exposure of MM.

The perpetual contract trading platform Perpetual.fi uses virtual AMM to completely balance the net position risk among traders. SakePerp combines the two mechanisms of Oracle+vAMM to open up the MM risk exposure while making the risk exposure controllable and configurable. At the same time, as far as traders are concerned, it is similar to SakePerp trading.

• When the oracle price is not updated, the trader opens and closes the trade according to the virtual AMM curve. The profit and loss caused by long and short are entirely complemented between traders.

• After the Oracle price update, the price curve will move from the last transaction price point to the latest oracle price.

• The transactions at the same Oracle price point can be completely complemented. After the oracle price update, the slopes of the two points on the curve will be different. The original positions which were opened/ closed on the vAMM curve cannot be completely complemented at the new Oracle price point. The non-complementary part is the risk exposure assumed by MM.

• The closer the vAMM curve price promoted by trading users is to the Oracle price, the smaller the risk exposure MM assumes. And better SakePerp trading experience for traders.

• The risk exposure assumed by MM can ensure that traders trade on the basis of real-time Oracle price. With the design of Funding Rate, the risk exposure is very small and the capital efficiency is quite high.