The ideas below appear throughout BotRadix. Each one is explained in plain language, with a short example.
Wallet and network#
A wallet (such as MetaMask or Rabby) holds your crypto assets and signs on your behalf. BotRadix DEX runs on Base, a low-cost Ethereum network (chain ID 8453). On Base, USDC is a digital dollar and ETH pays network fees ("gas"). A signature proves you approved something and costs nothing; a transaction changes the chain and pays a small gas fee.
Perpetual futures#
A perpetual future ("perp") lets you gain or lose from a price move without owning the asset and without an expiry date.
- Long: you profit if the price rises.
- Short: you profit if the price falls.
Position size and leverage#
The position size (notional) is the value your profit or loss is calculated on. Leverage is the size divided by the margin you commit.
Example. A 1,000 USDC long at 10x commits 100 USDC of margin. If the price rises 2%, the position gains about 20 USDC: 20% of the margin. If it falls 2%, it loses about 20 USDC.
Leverage multiplies gains and losses in the same proportion.
Margin#
- Initial margin is what a position commits when opened: size ÷ leverage.
- Maintenance margin is the minimum your account must keep: on the BotRadix DEX, reference value 0.5% of the position size (adjustable between 0.1% and 5% for new exposure).
Cross and isolated margin#
- Cross: all your free collateral backs all your cross positions together. Gains in one position support another, but one large loss affects the whole account.
- Isolated: each position has its own margin. At most, you lose that margin; the rest of your collateral is not affected.
Profit and loss (PnL)#
- Unrealized PnL: the result of an open position at the current price.
- Realized PnL: the result fixed when a position (or part of it) is closed.
- Net PnL: realized PnL after fees and funding.
Mark price and oracle#
The mark price is the price used to value positions, execute orders and decide liquidations. On the BotRadix DEX it comes from the PairForge oracle, which aggregates prices from several exchanges and signs them before they are published on chain.
Funding#
Funding is a small, continuous payment that keeps long and short exposure balanced. When more open interest is long than short, longs pay and shorts receive (and vice versa). On the BotRadix DEX the current operational policy caps it at 0.03% per 8 hours.
Health factor and liquidation#
The health factor compares your account equity with its maintenance margin. Above 1 the account is safe; at 1 or below, positions can be liquidated: closed automatically to stop further losses.
Example. Equity of 50 USDC against a maintenance margin of 5 USDC gives a health factor of 10. If losses reduce equity to 5 USDC, the health factor is 1 and liquidation begins.
Orders#
- Market order: executes now at the current price, within the maximum slippage you accept.
- Limit order: executes only at your price or better.
- Stop order: becomes a market order when a trigger price is reached.
- Take profit (TP) / stop loss (SL): prices at which a position closes automatically to secure a gain or limit a loss.
- Slippage: the difference between the expected price and the executed price.
- Maker / taker: on the BotRadix DEX a limit order checked against a valid price, unable to execute and left resting is maker; everything else (market, stop and limit orders placed while the market is closed, on their first execution) is taker. Makers pay a lower fee.
Profit cap#
On the BotRadix DEX every position has a maximum profit: at the v2.2 launch, 20 times its size for new exposure (for a long, a price 21 times higher). When the vault is at risk, winning positions can be reduced or closed early (auto-deleveraging), unless they have a valid backed take profit; anything liquidity cannot cover becomes a deferred payment. See Leverage and margin.
BAQ#
BAQ is the BotRadix token on Base. Holding it unlocks higher bot limits, and it can be deposited as supplementary DEX collateral. It is a utility token, not a share in the company. See BAQ.