Margin Model

Each perp market is instantiated with a dedicated contract where all funds are stored. These funds are isolated, meaning there is no way for other markets to interact with them and each user's deposits in one market stay separate from their deposits in any other market. There is no cross-margining.

Market Funds

The dedicated contract holds:

• Maker collateral — deposited by LPs to open maker positions
• Taker collateral — deposited by traders to open taker positions
• Fees — collected from trading activity
• Insurance — reserves to cover potential bad debt

Uniswap V4 Integration

Each dedicated market contract is linked to a corresponding pool on Uniswap V4. While collateral never leaves the dedicated contract, accounting tokens are minted and burned 1:1 in the V4 pool to manage position states and calculate pricing. This is discussed in more detail in AMM Pricing Model.

Base Asset

Each market specifies a base asset used both to denominate the cost of perp contracts and as collateral for opening positions. Currently, this is fixed to USDC across the platform. In the future, this will become a configurable module where market creators can choose from a growing whitelist approved by the protocol.