📝Market Design

Market Mechanism

In V2 of Perennial, markets natively net long positions against short positions, and only utilize maker liquidity to cover the resulting imbalance. This yields markets that are up to an order of magnitude more efficient in terms of open interest to required maker liquidity.

Utilization of Maker Liquidity

The maker side of the market is only required to cover the net exposure of the taker side: longs & shorts. Long and short taker positions are first netted out against each other with the resulting exposure directed to the maker pool pro-rata.

Market Simulator

To help understand how different mixes of maker/long/short effect the market we've built a little simulator. Try it out for your self here: Perennial Market Simulator

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