FAQ - Innovation Behind FWX
Our FAQ section is designed to help you understand the mechanics of FWX, from trading on the Perps Futures model to liquidity provision and risk management.
Last updated
Our FAQ section is designed to help you understand the mechanics of FWX, from trading on the Perps Futures model to liquidity provision and risk management.
Last updated
Yes, FWX offers a permissionless listing feature, which allows token creators to list their assets on the futures market, giving them instant access to leveraged trading. This is possible through FWX’s integration with decentralized exchanges like Uniswap, enabling any token to be listed in the AMM
All token that can list on UniswapV2/V3 or other AMM DEX like JOE, pangolin can list on the FWX permissionless listing and tradable on Leverage DEX (can search the token by using CA or token name)
In the near future, traders will be able to trade assets on Solana, Ton, Sui, and any chain, or even markets that have just been listed on centralized exchanges.
FWX’s cross-margin collateral allows users to share margin across all their open positions in the Perps Futures model. This means that instead of using separate margins for each position, the total margin is pooled and distributed across all positions. As a result, if the overall profit and loss (PNL) of your positions is positive, the liquidation price of each position can be adjusted, giving you more flexibility and reducing the chances of liquidation.
However, your liquidation price may change due to fluctuations in your positions, the market, or the total available collateral. If the market moves significantly or if you open new positions, the protocol adjusts the liquidation price to account for these changes in margin and risk. The goal is to keep the liquidation price at an optimal level, but if the positions reach their liquidation threshold despite these adjustments, the protocol will liquidate them to maintain platform integrity.
In the Leverage DEX model, assets listed via Permissionless Listing have their underlying assets held in the lending pool. These assets are directly swapped on the DEX using the best-rate swap router, which ensures that the swap occurs on the destination DEX with the highest liquidity and lowest price impact. However, traders are required to pay a swap fee to the destination DEX.
In addition, FWX charges a 0.03% fee, of which 20% is allocated to liquidity providers. This ensures that liquidity providers are rewarded for their contributions to the platform.
Unlike traditional futures markets, there is no funding fee when opening a position in this model. However, users are subject to a borrowing fee, which can be considered similar to the funding fee on centralized futures exchanges. For example, if the annual borrowing APR is 12%, this translates to approximately 0.01% every 8 hours, which can be seen as the funding fee equivalent.
In the FWX Perps Futures model, there is a maximum contract size based on the trading pair. You can view the specific contract size for each pair in the Perpetual Trading Configuration Page.
For the FWX Leverage DEX, the maximum contract size is determined by the liquidity available in the pool. Users can trade up to the limit that the pool can support, ensuring that sufficient liquidity is available to accommodate trades.
Under normal circumstances, there is no loss for liquidity providers (LPs) in the FWX Lending Pool. However, in rare situations, LPs may face risks if there is a significant price movement, such as a token price dropping 20% or more within 2-5 seconds. This can happen due to extreme market volatility or a rug pull by the token owner. In these cases, the LP may experience issues if a position that should be liquidated cannot be closed in time, leading to potential losses. The platform has mechanisms in place to minimize these risks, but it's important for liquidity providers to be aware of these rare scenarios.
For the FWX Perps Vault, which follows a peer-to-pool model for major tokens, LPs take on a different type of risk. In this model, LPs are the counterparty to traders. If traders make a profit, the LPs will incur a loss, and vice versa. This occurs because the liquidity provided by the LPs is used to facilitate the leveraged trades of the users.
While the FWX protocol is designed with robust security, we understand that zero-day attacks are a potential risk. To mitigate this, we have thoroughly tested various scenarios to ensure that the pool remains secure under normal conditions. However, if a zero-day attack were to occur, the protocol’s subsidization function will activate.
In this case, any losses in the lending pool will be shared proportionally among liquidity providers based on their contribution to the pool. There will be no "First Come, First Serve" policy for surviving LPs; all liquidity providers will bear the loss together, ensuring fairness and protecting the integrity of the pool.
Similar to lending protocols like COMP/AAVE, liquidity providers (LPs) will receive their APR when traders close their positions or when the protocol liquidates a user's position. The fees collected from these actions are then distributed to LPs based on their proportional contribution to the lending pool.
The APR shown on the frontend is calculated based on the summation of the current positions that are still open, providing an estimate of the returns LPs can expect. This calculation adjusts dynamically as positions are opened and closed.
Yes, the protocol allows users to retain 15% of their liquidation margin. After a position is liquidated, users will receive the remaining margin back to their decentralized account. This ensures that users are not left with nothing after liquidation, though the exact amount returned depends on the liquidation process and market conditions.
FWX’s liquidation process is similar to lending protocols like Compound or AAVE, where the protocol has a built-in liquidation function. This allows anyone to call the liquidation function and liquidate users' positions if meet the protocol criteria.
The protocol is designed to ensure that traders do not lose more than they should when liquidated. Liquidators are rewarded with just 0.01% of the remaining margin after liquidation. This encourages a fair and efficient liquidation process.
FWX also allows public liquidation calls and works with several partners who monitor the market and trigger liquidation when needed. Since FWX’s market has been open for over a year, all user positions have been liquidated in a timely manner, ensuring that positions are closed promptly when necessary.
FWX optimizes gas fees to ensure they are as low as possible for our users. We work closely with our technical advisors and auditors to continuously restructure and reduce gas costs, tailoring them to best suit the needs of our users. Our goal is to provide an efficient and cost-effective trading experience without compromising on performance or security.
If you have any questions about the FWX protocol, feel free to ask on our official Discord or Telegram channels. Our community and support team are always available to assist you with any inquiries or concerns you may have.
You can contact us via email at [email protected] / [email protected]. However, please note that this email is not monitored for proposals, sponsorship packages, or business offers, as there is no budget allocated for these services. We will not respond to such inquiries - This will lead to reduce the email scoring of the source.
We welcome strategic, no-cost protocol partnership discussions, as well as conversations about the protocol and user-related issues. If you have any feedback, suggestions, or questions related to the platform's operation, feel free to reach out!
