Matrix Labs is a fully decentralized virtual-AMM-based perpetual swaps trading protocol deployed on the Polkadot and the Cardano blockchains. Unlike traditional AMMs, users can long or short any assets’ perpetual contracts with up to 25x leverage. While most decentralized derivative trading platforms face liquidity concerns, the Matrixswap vAMM offers infinite on-chain liquidity. A funding rate mechanism is incorporated to ensure MarkPrice closely tracks IndexPrice. Matrix Labs aims to be a fully community-owned and governed Defi protocol in the long run.

Features

• While most decentralized derivative trading platforms face liquidity concerns, Matrix Labs vAMM offers trades with up to 25x leverage with infinite on-chain liquidity.
• 100% on-chain and 100% non-custodial trading.
• By interacting with Matrix Labs’s vAMM smart contracts, users can gain exposure to derivatives for any assets on the market.
• Matrix Labs aims to deploy on two major blockchains: Polkadot and Cardano. By leveraging cross-chain bridges, Matrixswap aims to unlock liquidity from different blockchain networks thereby empowering traders with maximum capital efficiency.
• Matrix Labs provides users an Emergency Nuke Button (DEX aggregator) that allows users to convert multiple (or all) tokens into one single asset under one transaction. This is made possible by the nature of the underlying blockchain (low fees, high throughput) and shared liquidity amongst DEXs.
• The Matrix Labs platform utility and governance token MATRIX is built with a deflationary economic design. 50% of the platform trading fees will be allocated towards token buyback & burn in order to offset rewards token emission.

Perpetual Swaps

Perpetual Swaps are cryptocurrency derivatives that enable traders to speculate on the valuation of specific underlying assets. Perpetual contracts have two key features:

(i) There are no expiry dates on contracts. Contracts are effective until traders close their positions.

(ii) The underlying asset itself is never traded, therefore custody issues are mitigated.- The swap price closely tracks the price of the underlying asset by utilizing funding rates. A mechanism that ensures the convergence of the perpetual MarkPrice to the IndexPrice.

In general, the main difference of perpetual contract trading on Matrix Labs is that all assets and trades are stored and executed on-chain. Unlike Binance, Bitmex perp contracts, Matrix Labs doesn't rely on counterparties and there is no risk of centralized off-chain servers. With Matrix Labs, users have full custody of their own funds.

vAMM (Virtual AMM)

Matrix Lab's vAMM (pioneered by perp.fi) uses the same x*y=k constant product formula as most AMMs do. However, as the word virtual suggests, The vAMM itself does not contain an actual asset pool (k). Instead, the actual assets (traders' collateral) are kept in a smart contract vault that oversees all of the vAMM's collateral. In other words, Matrix Labs uses vAMMs as price discovery mechanisms, not for spot trading. This allows Martixswap to operate with infinite liquidity with zero impermanent loss for stakeholders, as liquidity providers aren’t required.

The vAMM acts as an independent settlement market, all profits and losses are directly settled in a collateral vault.

Oracle

Matrix Labs Market Oracle nodes receive information on the time-weighted average price (TWAP) of assets. Upon mainnet launch, Matrix Labs oracle providers will provide TWAP information for all assets (major coins & shit coins) by utilizing our own nodes that interact with DEXs' API for market pairs' real-time data. As a starting point, we will utilize Kylin data oracle as our real-time index price feed for stable coins and major assets, as they provide the oracle solutions in the Polkadot/ Substrate framework. Each provider will be the data supplier of each asset. For example, provider k is the sole provider for asset k.