cAssets will be SPL assets, so they may be able to be traded directly in a peer-to-peer manner, via the platform interface, or via other dApps in the Solana ecosystem in the future.
The protocol will enable market and limit orders by leveraging Serum’s orderbook infrastructure. This allows for a familiar interface for non-crypto native users, institutions looking to deploy more complex trading strategies, and market makers looking to collect bid-ask spreads. Long and short positions will also be able to occur. Unlike in traditional markets where a brokerage controls the lending of shares for short positions, the protocol will have a peer-to-peer lending pool to allow traders to borrow assets and sell them back to the market in the hope to purchase them back at a lower price.
Margin trading will also be able to take place on the platform. Every wallet connected to the platform will create a margin account (thanks to mango markets for this idea, quite ingenious). that will allow users to deposit $USD denoted stablecoins (as mentioned prior, only USDC at first) in order to be able to borrow liquidity provided by others. Traders will be able to trade with a max of 2x leverage and will have to be initially over-collateralized at 150%. There is an initial collateralization requirement and will have a maintenance collateralization requirement to maintain in order to keep the protocol safe. Maintenance collateralization provides wiggle room to prevent short-term volatility and small asset price fluctuations from causing a trader to be liquidated.
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