Beast Innovative Product Features 2 — Contract Trading

As the world’s first innovative BTC L2 DEX, Beast provides a series of innovative product features for global asset traders in terms of decentralization, convenient operation and liquidity, and is committed to providing users with richer trading options and more efficient trading experience. Below we will introduce Beast’s innovative contract trading function module.

Open or close positions

Beast provides leveraged contracts. Users can operate long or short positions, depending on which side the user wants to open a leveraged position. When the user closes a position: For long positions, profits are paid in the assets held by the user, for example, if the user is long ETH, the user will receive profits in ETH; for short positions, profits will be paid in the same stablecoin that the user used to open the position, such as USDC or USDT.

Margin

Beast is cross-margin by default, which means that the user’s trading account will merge liabilities to offset the margin between positions. The user’s portfolio then acts as collateral for multiple open positions. On Beast, your portfolio is your margin, and users can use all of their funds (deposits, positions, and P&L) to obtain margin. Similar to regular cross margin, portfolio margin means that unrealized profits can be used to offset unrealized losses or used as margin for existing positions or to open new positions. All relevant balances for portfolio margin are automatically calculated on the Beast backend and intuitively displayed as the portfolio health of the trading account on the Beast app. Maximize capital efficiency with portfolio margin by managing a universal margin account that contains all of your balances and positions — no more switching between accounts. With reduced risk of margin calls and single position liquidations, users can trade more flexibly and efficiently.

Subaccounts

Beast has a powerful subaccount tool for users to clearly separate positions in a single address. The margin and positions of each subaccount are isolated from other subaccounts, which means users can trade on isolated margin through different subaccounts. Each subaccount has independent positions, balances, and margins and can trade independently. If liquidated, the only assets at risk are those in the subaccount. Traders who have assets in multiple subaccounts do not take risk across these subaccounts, but gain capital efficiency and can easily compound profits.

Liquidation

Liquidations on Beast are performed at the Marked Oracle Price, which is derived from a third-party oracle. Liquidations protect the protocol and users from the risk of systemic bankruptcy. When the maintenance health of an account falls below 0, it will enter the liquidation state. The assets and perpetual positions of the subaccounts will be closed in the following order: 1. Orders are canceled. 2. LPs are broken down. 3. Assets are liquidated. 4. Liabilities are liquidated. Any user can purchase assets from the liquidation account at a discount or repay their liabilities at a markup until the initial health of the underwater account rises above 0. If at any time during the liquidation process, the initial health of the account exceeds 0, liquidations will stop.

Profit and Loss

Profit and Loss, commonly referred to as P&L or PnL, is a term used to describe the current state of a user’s active positions when trading. By observing the P&L, users will be able to determine whether their positions are profitable or losing money. A user’s current position on Beast is the cumulative sum of all executed orders (increases, decreases, or closes) over a period of time. All traded lots per market and per sub-account are combined into one position to determine profit and loss.

Pricing

Beast adopts a multi-oracle approach where prices are sourced from different providers, ensuring that prices are updated in real time. With the Beast sorter, price updates are bundled off-chain with each sequence of operations submitted before being pushed on-chain, enabling continuous reference prices at a lower cost and computational complexity. This is necessary for high-performance DEXs relative to other pure on-chain oracle providers that push price updates less frequently. Fewer price updates in a pure on-chain oracle model reduces the ability to support long-tail assets because GAS is not justified relative to the on-chain demand for the corresponding assets. Less frequent price updates also do not work as well as a hybrid on-chain/off-chain oracle model in the event of volatile market conditions. With a multi-oracle approach, Beast enables robust, low-cost, and high-performance price references and related on-chain computations (such as perpetual funding) while minimizing pricing leaks for the long tail of assets.

Fees

Trading fees on Beast are calculated per trade and are based on the notional position size filled. Trading fees are calculated in market quoted assets and are displayed in the perpetual market as a penalty to the cost basis of the position. In the case where a user only holds non-stablecoin assets on Beast, the borrowing of stablecoins will only occur if someone settles the loss of that perpetual position.

Trigger Orders

Traders can take advantage of the trigger order types on Beast to maximize their trading experience. Trigger orders are sent to Beast’s trigger order service. If the trigger price level is reached, the order will automatically execute on behalf of the user. Beast currently supports the following trigger order types: Stop Loss Market Order, Take Profit Order, Stop Loss Order.

Orders are not guaranteed to be executed, which may happen in several situations, including but not limited to:

1. The mark price of the exchange price aggregation does not reach the specified price.

2. The specified price has been reached, but there is not enough time to execute.

3. No gatekeeper receives the execution order.

In addition, trigger orders are market orders and are not guaranteed to be executed at the trigger price.

The 4 major significances of Beast’s creation

1. The world’s first truly decentralized options DEX in the BTC L2 ecosystem.

2. Assets are on-chain, and the capital chain is completely transparent.

3. Allow users to interact with the Web3 world more conveniently.

4. Eliminate middlemen through smart contracts and reduce financial transaction costs and frictions.