Qilin is a decentralized volatility protocol that provides the ability to long volalitity of any crypto asset.
By mitigating risks for liquidity posed by open positions through multiple mechanisms, Qilin in turn guarantees the liquidity needed for an optimized decentralized derivatives trading experience. Qilin also adopts a tranche-structured LP model with an ETF-type liquidity provider token to maximize liquidity incentive.
Up to 100x Leveraged Perpetual Futures Contracts Traders can trade any asset up to 100x leveraged long or short, with guaranteed transparent fees and liquidity.
Initial Liquidity Offering Each liquidity pool has an initial fund offering where Liquidity Providers can purchase Liquidity Share Tokens (LS Tokens) with liquidity deposits. When the size of the liquidity reaches a pre-set cap, the fund is closed until further liquidity is demanded.
Tranche LP Pool Similar to traditional structured finance, Qilin’s LP pools are structured into Tranche A and Tranche B LP to attract Liquidity Providers with different risk preferences.
Tradable ETF-Type LS Token (Liquidity Share Token) The Liquidity Share Token (LS Token) represents the share of liquidity deposit in the liquidity pool. The profitability of Liquidity Providers is represented in the value of the LS Token minus the price of the share at the time of deposit. Like shares of a publicly-traded company, LS Tokens (ERC-20) can be sold or purchased by anyone with the underlying liquidity share, depending on their risk preference.
Leveraged L / S Position Token Similar to LS Tokens, trader’s open positions can also be tokenized and become composable. Traders can buy or sell Position Tokens to quickly manage their positions.
Rebase Funding Rate A Rebase Funding Rate is applied to the side of open positions during market volatilities when the size of open positions reaches a pre-set threshold ratio to the size of the liquidity fund. The funding rate is transferred to the liquidity fund to hedge the risk for liquidity until the ratio reaches below the threshold.
Dynamic Algorithmic Slippage A slippage sensitivity index is calculated by using the size of open positions and is applied to Uniswap's constant product formula to produce the slippage, which is applied to trades on the side of open positions. The slippage fee is transferred to the liquidity fund to hedge against risks for liquidity.