What Are Perpetual Futures?

A Vordex overview for Alephium traders

Perpetual futures contracts are types of derivatives that allow the presence of speculative trading on an asset price, in this case, ALPH, the native token of Alephium without necessarily owning any of the assets themselves. As opposed to conventional futures, perpetuals have no expiration and can simply stay open as long as the sufficient margin is maintained.

Vordex is the first ever perpetual futures exchange to be deployed on Alephium by bringing a full decentralized Loan and Borrow model through which traders can engage with leveraged trading.

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How perpetual futures work on Vordex

To offer some balance between the long-and-short demands, Vordex employs a Loan Pool mechanism, very different from funding rates on other platforms.

✔️ Traders will borrow from the Loan Pool to open a leveraged long-or-short position. ✔️ Liquidity providers (LPs) are passive earners via borrow fees and trading activities. ✔️ All positions are collateralized and settled on-chain in ALPH or stable coins.

No expiry is put on such positions, which can be kept open as long as the margin keeps above a liquidation threshold.

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Why use perpetual futures on Vordex?

✔️ Hedging - Protect your ALPH or VEX holding from short-term price dips, without selling them. ✔️ Speculating - Trade long or short based on your price anticipations. ✔️ Greater Access - Achieve leverage to ALPH and other Alephium ecosystem assets. ✔️ No Expiry - Your position can remain open forever, as long as you stay above margin. ✔️ Decentralized Settlement - Constructed upon Alephium and awash in transparency. ✔️Loan Model with Yield- Traders borrow capital, while LPs earn interest in a fair and decentralized loop.

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Leverage VEX/ALPH trades

The first trading pair on Vordex is VEX/ALPH which provides traders with speculation on the performance of the Vordex token against ALPH with leverage up to 10x. This creates opportunities for:

Long positions (if hoping that VEX will rise against ALPH) Short positions (if hoping that VEX will fall against ALPH)

Vordex does not use funding rates; instead, borrow fees are paid hourly and distributed to liquidity providers.

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Key features on Vordex

🔹 No Expiration Date – Keep your position open as long as your margin is sufficient. 🔹 Leverage Trading – Use up to 10x leverage to increase your exposure with less capital. 🔹 Decentralized – No central exchange or custodians, just smart contracts on Alephium. 🔹 24/7 Access – Trade any time on Alephium’s fully decentralized network. 🔹 Minimal Slippage – Stable execution thanks to deep liquidity.

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Risk considerations

Indeed, perpetual trading brings you freedom and flexibility in trading strategies, but a trader must always be mindful of the risks that hover over the path:

⚠️ Risk of Liquidation - Since leverage increases the chance of liquidation if the prices turn against your position. ⚠️ Borrowing Fees - Between borrowage of an hour, the hourly borrow fees are charged and accumulated over time. ⚠️ Volatility - ALPH and every other crypto asset is volatile; this requires risk management.

Vordex's maximum leverage at launch is x10. However, traders need to be extra cautious in their margin management to avoid liquidations.