Introduction to perpetual contracts
Important Note: Contract prices are different from spot market prices due to the cost of holding positions. Like many contract markets, the platform uses a "funding rate" to ensure that the contract market price converges to the "spot price". While this system will facilitate long-term price convergence between the spot and contract underlying, there may still be relatively large price differences between contract and spot prices in the short term.
2.In addition, perpetual contracts carry the fact that there is no need to deliver the actual commodity, and mimic the behavior of the spot market in order to reduce the gap between the contract price and the spot price. This is a great improvement over traditional contracts (which would have a long/fixed price difference from the spot price).
Market manipulation is the malicious manipulation of trading prices for personal gain. Such abnormal price fluctuations may lead to positions being closed out in bad faith, thus creating a very unfair trading environment. To reduce the likelihood of malicious market manipulation, MEME uses a dual set of price mechanisms to ensure a fair trading environment. Currently, most exchanges use the latest market price as the trigger point for forced liquidation. Instead of the latest market price on the platform, MEME uses a reasonable spot price as the trigger point to force a closeout. The spot price is derived in real time from the spot prices of the three major spot exchanges. Therefore, even MEME does not have the ability to influence the spot price.
Another feature of the MEME perpetual contract is that the trading price is always anchored to the spot market price without significant deviation. MEME ensures that the price of a perpetual contract is always anchored to the spot price by weighing a combination of long and short side trends every 8 hours and calculating a funding fee, which is paid by one of the long and short sides to the other. The funding fee is charged every 8 hours, at 8:00 am, 4:00 pm and 12:00 am daily.
Leveraged spot markets generally offer 3-5x leverage and higher borrowing costs. In the futures market, several major trading platforms only provide 5-20x leverage. However, MEME perpetual contracts offer up to 100x leverage, which traders can flexibly adjust after opening a position according to their trading needs. The platform provides a flexible gradient margin system while ensuring the best trading experience for traders.
MEME uses a full position penetration mechanism to ensure traders' interests. This mechanism is used to determine who bears the loss of a position that cannot be closed at a price better than the breakeven price in the event of a forced close. Unlike social loss sharing, where all profitable traders share losses, MEME uses automatic position reduction to ensure that traders' interests are protected against large losses caused by a few risky speculators. The automatic position reduction system ranks client positions according to their percentage of profitability and effective leverage. That is, traders with high profitability and high leverage will be selected first.
Last modified 9mo ago