🔄 Exchange

These docs describe v1 of the protocol. V2 is in R&D and will be documented afterwards


In its core, Palmswap Protocol aims to create a protocol for trading perpetual contracts on the Binance Smart Chain that anyone can use. Trades on Palmswap Protocol are settled in USDT, so all collateral used on the exchange is in USDT. Simply use your existing wallet to deposit USDT through our trading interface and you are ready to trade. Your funds will be controlled by your Metamask wallet or other compatible wallet at all times during the trading process.

Trading with perpetual contracts 📈

Perpetual contracts are a type of futures contracts, initially introduced by Bitmex into the cryptocurrency space. Perpetual contracts are one of the most popular derivative products in the industry. In general, trading perpetual contracts on Palmswap is largely similar to trading perpetual contracts on centralized exchanges. However, there are small things that make us different, the main differences being:

  • Palmswap is based on AMM

  • Limit Order / Stop Loss / Take Profit are executed by AMM

  • Trading is conducted fully on-chain

What are perpetual contracts?

Perpetual contracts allow traders to speculate on the future price of a particular asset by buying (going long) or selling (going short) perpetual futures contracts. Unlike typical futures, perpetuals do not expire and remain effective until the trader closes his position. It is possible to use leverage of up to x10 during Mainnet v1. Financial products like perpetual contracts allow investors to better manage risk with their portfolios and open new ways of speculation. In simple terms... if you own 1 ETH and expect a rise, but don't have more capital available, you can trade 1ETH up to 10ETH and profit from an increase of the 10ETH. However, we recommend that you acquaint yourself with trading perpetual contracts before using the Palmswap protocol.

Fundamentals for Perpetual Contracts

The price of perpetual contracts often deviates from the common market (also known as the spot market). These deviations indicate the sentiment on the exchange - if a majority of traders expect the underlying asset to increase in value over time, the price of the perpetual contract will likely exceed the spot price. Similarly, if a majority of traders expect the price to drop, the price of the perpetual will be lower than the spot price.

There are two mechanisms that moderate this process and serve to keep the price of the perpetual contract close to the spot price.

Palmswap v1 uses an virtual Automated Market Maker (vAMM) for perpetual trading.

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