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Overview

Float creates peer-to-peer markets where users can easily mint leveraged tokens. Leveraged tokens allow users to open leveraged positions on popular cryptocurrencies, with out the significant additional risks of margin maintenance, liquidations and managing a collateralised debt position.

To do this we take a secure price feed and create a market around it.

A market is made up of pools. Each pool has a user-selectable leverage tiers and is positioned on either the long or short side of a market.

You can add liquidity to a pool in order to mint leveraged tokens from that pool.

Liquidity moves between these pools in line with the movements of the underlying price. When the price goes up, short pools pay longs. When it goes down, longs pay shorts.

Trading pools#

Trading pools are fixed at a specific leverage tier, on a specific side of the market. For example, 3x long ETH will always be long, and except for rare edge cases, will always have exposure fixed at 3x.

There can be multiple trading pools on each side of a Float market.

Users in one trading pool can shift to any other trading pool in Float with one click. Even pools in other markets. For example in one click you can burn your 3x long ETH tokens and mint new 5x short BTC tokens. Under the hood this is redeeming your one position, and minting another position for you once your redeem is closed out.

Float pools#

Each market has another tranche of liquidity called the Float pool.

The Float pool is used by market makers to balance the market. The leverage and position of the Float pool changes based on the balance of capital in the trading pools.

If there is an imbalance between the long and short open interest in the protocol, the float pool acts as the counterparty taking on the required exposure to ensure long interest is equal to short interest.

The more imbalance between long and short pools the greater the leverage tier of the Float pool.

The Float pool has an upper threshold on the leverage it can be exposed to. When the pool reaches this threshold price exposure in the trading pools on the overbalanced of the market will drop below 100%.

The Float pool earns a funding rate paid by the other pools in the market in exchange for taking on the risk of balancing the market.

The funding rate, actual liquidity and price exposure of each pool can be seen on the detailed view of that market.

Price epochs#

The system makes use of epochs to effciently batch settlements and executions on chain. All actions occuring in a specific epoch, will be batched to together and executed when a chainlink price is recieved after the epoch is finished (plus an additional minimum wait period).

To interact with off-chain price data Float markets integrate with Chainlink price feeds which push price data on chain.

When actions are made by users, they are added to a batch for that epoch. At the end of that epoch trades are closed and executed at the first price update received from the price feed after the close of the epoch. Trades made after the end of that epoch will be executed in a subsequent batch.

The countdown to the end of the current price epoch can be seen on the detailed view for that market. There can be some variance in the time between epoch close and trade execution depending on the heartbeat of the price feed.