Perpetual futures (perps) are the most popular derivative contract among crypto traders because they give access to large amounts of leverage and facilitate speculation on both the upside (through longs) and the downside (through shorts). It is important to note that while leverage can lead to significant profits, it can also lead to significant losses.
OXFUN perpetual futures contracts are Quanto OX perpetual futures. In this system, profits, losses, and liquidations are denominated in $OX, ensuring that if you hold $OX as collateral, your liquidation price won't change as the price of $OX versus USDT fluctuates.
This design reduces traditional portfolio margin risks and allows traders to leverage a wide range of assets, including unconventional cryptocurrencies and memecoins, turning potential market downturns into bullish scenarios for $OX. This may sound complicated, but let’s break it down starting with perpetual futures.
Perpetual Futures
Perpetual futures track spot prices using “funding payments”. These are cash payments exchanged between buyers and sellers on an hourly basis. Who pays and who earns depends on the “premium” in the market, which refers to the difference in price between the perp market and the spot index. If the premium is positive (perp > spot) then buyers pay sellers. If the premium is negative (perp < spot), then sellers pay buyers. The precise formula to calculate a funding payment is as follows:
USDT Index Price = Median of a set of external USDT denominated spot pairs
Moving Average* = Moving Average ((Best Bid+Best Ask)/2 - USDT Index Price)
Mark Price** = USDT Index Price + Moving Average (2 minute Basis)
Premium Rate*** = TWAP of ((Mark Price - Index price) / USDT Index price)
Funding Rate = Premium Rate / 24
Funding Payment**** = Position Size * Mark Price * Funding Rate * OX Multiplier
* Measured every 6 seconds to create a 2-minute long window
** If the perp order book has a bid-ask spread greater than 2%, then the mark price will converge to the index price, where the bid-ask spread is defined: Bid-Ask Spread = (Best Ask - Best Bid) / Index Price
*** Measured every 30 seconds over the course of an hour
The default maximum and minimum hourly funding rates for OXFUN perpetuals are +-0.2% respectively. These bounds may be changed over time, or changed suddenly due to exogenous factors such as a hard fork.
Quanto OX
Funding, Unrealized PnL, and Realized PnL are all recorded and settled using a ratio of 1 USDT:100 OX. This means that your PnL changes by 100 OX per contract traded for every 1 dollar price change.
Unlike other exchanges, OXFUN perps have an index price in USDT, while PnL and funding payments are paid in OX at a fixed ratio per contract.
Example
Alice and Bob enter a trade together on the order book.
Alice longs 1 contract of BTC/USD Perp at $50,000.
Bob shorts 1 contract of BTC/USD Perp at $50,000.
Now, for each $1 that BTC/USD goes up/down, Alice will earn/lose 100 OX and Bob will lose/earn 100 OX. The 100:1 conversion ratio is fixed and we refer to it as the “OX Multiplier”.
The OX Multiplier is 100 for all perp markets. Similarly, when it comes to paying funding, the Funding Payment is converted to OX at a ratio of 1:100, i.e., 1 Contract * 50,000 * 0.01% * 100 = 500 OX.
A trader concerned with their USD balance must pay attention to the OX price, since a rising OX price can magnify their gains AND their losses. Similarly, a falling OX price can shrink a trader's gains AND their losses in dollar terms.
To recap, in this example we saw that BTC/USD Perp has an “OX Multiplier” of 100 and observed the downstream effects on PnL and Funding Payments.
Trading Perpetual Futures on OXFUN
To trade perpetual futures on OXFUN, select the Perpetuals tab in the market selector, and a list of markets will appear. All of these markets will have the term "Perp" in the title, denoting them as perpetual futures. For example, BTC/USD Perp is the Bitcoin perpetual future.
Trading perpetual futures on OXFUN is straightforward:
Select buy or sell in the Perp market of your choice.
Enter the price you are willing to trade at (if entering a limit order).
Input the amount you want to trade.
Press the green "Buy / Long" button if buying or the red "Sell / Short" button if selling.
This will enter the order into the order book, executing as a 'Taker' order if your price crosses the market, or placed into the market as a 'Maker' order if it does not.
To Close a Position:
In the trade ticket, change from “Buy Perp” to “Sell Perp” (or vice versa), input the amount you’d like to close, the desired exit price, and submit the order.
In the Positions tab, select “Close”. A pop-up window will appear prompting you to input the amount you’d like to close. Press the blue “Close” button to submit the order.
The Positions, Open Orders, Order History, and Trade History tabs on the trading UI will show information on your current and historical trading activity.