Perpetual Swaps, or “perps” for short, are financial derivatives that allows traders to speculate on the price movements of a particular asset without actually owning the underlying asset.
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What are the advantages of Perps Trading?
The main benefit of trading perps is the ability to leverage your position. Unlike in traditional spot trading, a trader may enter into larger positions than they normally could, using relatively small amounts of capital.
For example: The current price of NEAR is $10. You’re bullish on NEAR and you want to buy $10,000 worth (1,000 NEAR). However, you’ve only set aside $1,000 for trading. With perps, you can enter a position worth $10,000 with just $1,000 by using 10X leverage. If the price of NEAR goes up 10%, your PnL is worth 10% of the leveraged position and you can walk away with +$1,000 rather than +$100 (10% of the amount you put in).
With higher leverage comes the potential for both greater gains and greater losses. In order to prevent substantial losses, traders are able to minimize their risk by setting a maximum amount they can lose, in the form of a fixed collateral.
Some definitions
Collateral refers to the assets that are used to secure a position in the market. When a trader enters into a perpetual swap contract, they are required to put up some form of collateral in order to cover any potential losses that may arise from the trade. This may be in the form of tokens native to the market they are trading in (e.g. NEAR, ETH) or stable coins (e.g. USDT, USDC).
In the event that the trader experiences losses that exceed the amount of collateral they have put up, they may be required to close out their position. When this happens, it is referred to as liquidation.
How to Trade Perpetuals on Tonic DEX
With those basics out of the way, how do you actually trade perpetuals?
To get started, visit https://perps.tonic.foundation and connect your wallet.
Once you’ve connected your wallet, you can choose which market you wish to trade on:
Here, you can choose which asset you’d like to speculate / trade on.
To the right of the screen, you’ll find the main trading panel:
Here, you can choose whether you want to go “Long” (Bullish) or go “Short” (Bearish) on an asset.
You can choose how much collateral you want to put up, and how much you want to leverage that collateral (2X, 5X, 10X).
For your convenience, there are also quick-selects to put in predetermined percentages based on the total tokens in your wallet (25%, 50%, 75%, 100%).
To choose which asset you’d like to use as your collateral, click here:
To the bottom of the page, you can find your current positions, limit orders, and trading history:
Other than that, it’s pretty much just like spot trading — simple as that!
Think you have what it takes? Start trading perps on Tonic DEX!
About Tonic
Tonic is a fast, permissionless decentralized exchange built on NEAR. Tonic aims to bring the speed and convenience of centralized exchanges to NEAR while being fully decentralized. Our mission is to build an open protocol for trading on NEAR, owned and operated by the community.
Join the Tonic community:
App
https://perps.tonic.foundation/
NFTs
https://paras.id/collection/nft.greedygoblins.near
Twitter
https://twitter.com/tonicdex
Discord
https://discord.gg/tonicdex
