Trading

The terms

• Margin. The HYPE you post. It is the most you can lose on a position.
• Leverage. 1x to 5x. Notional = margin × leverage.
• Size. The number of tokens the position is long or short. It comes from the vAMM.
• Entry price. Notional ÷ size. It includes the price impact of your own trade on the vAMM.
• Mark price. The vAMM price right now: HYPE reserve ÷ token reserve.
• Index price. The clamped 5-minute TWAP of the spot pool. Funding pulls mark toward index.

Opening

You press long or short with an amount of HYPE and a leverage. The transaction sends margin plus the open fee. The market:

1. Checks leverage, the freeze, the max position size (10% of spot liquidity of spot liquidity in notional) and the open-interest cap of that side.
2. Trades the notional against the vAMM. A long buys virtual tokens. A short sells them.
3. Records the position and moves the mark price.
4. Splits the fee: 50% Pit, 30% $SCAP buyback reserve, 20% insurance fund.

Holding

Your position carries unrealized P&L, measured as what closing it on the vAMM would return, and accrued funding. Equity = margin + P&L − funding owed. Margin usage = loss ÷ margin.

You can add margin at any time. That lowers usage and pushes the liquidation price away.

Closing

A position can close 60 seconds after it opened, not before. The minimum hold blocks open-and-close in one block against a pushed pool.

Closing trades the size back through the vAMM. The payout is margin + P&L − funding − the close fee. Profit is paid by the Pit. Loss goes to the Pit.

Fees

0.10% of notional on open. The same on close, on the closing value. See Fees.

Worked example

Mainnet-scale numbers. The token's spot pool holds 2,000 HYPE. The index is 0.001 HYPE per token. The market's vAMM starts with 2,000 HYPE and 2,000,000 virtual tokens.

Open. You post 10 HYPE at 5x.

• Notional: 10 × 5 = 50 HYPE.
• Open fee: 0.10% × 50 = 0.05 HYPE. You send 10.05 HYPE.
• The vAMM goes from 2,000 to 2,050 HYPE. Its token side goes from 2,000,000 to 1,951,219.5. Your size: 48,780.5 tokens.
• Entry: 50 ÷ 48,780.5 = 0.0010250. The mark moves to 0.0010506.
• Caps: 10% of 2,000 HYPE allows 200 HYPE of notional per position. 20% allows 400 HYPE per side. You fit.
• Liquidation (estimate): your loss reaches 80% of margin, 8 HYPE, when your 48,780.5 tokens are worth 42 HYPE. That is a price of about 0.000861.

Close at a profit. Other longs push the mark up. Selling your 48,780.5 tokens back returns 55 HYPE.

• P&L: 55 − 50 = +5 HYPE. Funding owed over the hours held, say 0.10 HYPE.
• Close fee: 0.10% × 55 = 0.055 HYPE.
• Payout: 10 + 5 − 0.10 − 0.055 = 14.845 HYPE. The Pit pays the 4.845 HYPE above your margin.

Close at a loss. Shorts push the mark down. Selling returns 46 HYPE.

• P&L: −4 HYPE. Payout: 10 − 4 − funding − 0.046 fee. The 4 HYPE loss goes to the Pit.

Position lifecycle

1. Open: margin posted, fee split, vAMM moved.
2. Hold: P&L follows the mark, funding accrues every hour.
3. One of three ends: you close, you are liquidated, or the market is retired and you close at the vAMM price.