There are four types of participants in Qilin’s ecosystem: liquidity providers, traders, liquidators and developers.
Liquidity providers provide liquidity in the form of ERC20 tokens to the liquidity pool.
Traders can open and close contract positions via liquidity pools while paying a trading fee (0.1% of position size) to the liquidity provider.
Liquidators are rewarded with liquidation penalties from positions when they are liquidated. The liquidation penalty starts at 10% of the margin and increases with new block height, with a cap of 100$ of the margin.
Developers can build on Qilin’s smart contracts to build programs for tokens, trading interfaces, trading experiences, etc.
Liquidity providers can be further divided into different types on Qilin:
• Passive LPs are token holders who want to earn a yield by holding their assets from transaction fees. They bear the risk exposure from unmatched positions.
• Professional LPs have their own market-making strategies to hedge against the risk exposure on other markets to achieve delta-neutral exposure.
• Project teams can also choose to be the liquidity provider to create a liquid perpetual market for their token.
• DeFi enthusiasts who actively seek new markets to experiment or yield opportunities in new markets.
There are several types of traders on Qilin.
• Volatility traders: traders who use perpetual contracts to make directional bets on the volatility of an asset
• Arbitrageurs: traders who profit from price differences between different markets
• Bots: smart contracts that execute trades on a protocol
Developers can build Qilin’s derivative functionalities into other protocols or applications with Qilin’s open-sourced code base and front end functionalities.