Accounting & Flow of Funds
šPerpetual Futures and Spot Trading with up to 10x leverage
Last updated
šPerpetual Futures and Spot Trading with up to 10x leverage
Last updated
Within Coin CapitalĀ®, all mint funds and profit deposits are held in a global collateral vault. This is required for seamless cross-margin and borrow-lend. The only exception to this is the insurance fund vault residing outside.
Ensuring proper accounting across all allocation requires a robust tracking mechanism. The fund uses intermediate Pool Balances to facilitate transfers and ensure that claimed gains are required to come from settled offsetting losses, this is done by the efficient mechanism on Drift.
High Level Architecture
An individual perpetual market has two pools:
A. P&L Pool: to accumulate funds from users with losses for settlement to users with profits B. Fee Pool: to accumulate a fraction of exchange fees for the Quote Spot Market's Revenue Pool
The P&L Pool receives the highest priority on claimed funds, in order to give our funds the best possible allocation.
The Fee Pool will only get partially filled up by up to 1% of intermediate P&L settled from Drift users losses and aggressively drawn down for the benefit of the P&L Pool otherwise.
An individual spot market has two pools:
A. Revenue Pool: to accumulate revenue across the Drift protocol, denominated in this token B. Fee Pool: to pay fillers and settle portions to the revenue pool
The Revenue Pool can collect fees from:
Borrow interest
Liquidations
Perpetual Markets
and can pay out to:
Insurance Fund
Perpetual Markets
Currently, a Perpetuals Market can only pull from the Spot Market Revenue Pool and Insurance Fund for its quote currency.
In the future, it may be possible for a distressed associative perp market (BTC-PERP) to be able to pull funds from the associated spot market (BTC) revenue/insurance pool and immediately swap for USDC to top off its fee/P&L pool.
The fund's operations on orderbook, liquidity, and liquidation layer is powered by a validator-like Keeper Network via Drift Protocol.