Overview

Imperial is a Perp DEX to trade ALL ASSETS on leverage

What is Imperial

Imperial is a perp dex (platform to buy assets on leverage) built on Solana allowing users to spin up a perp market on ANY asset on Solana so long as 2 requirements are met:

1. Asset is a token

2. Asset is traded on an AMM

Note on the permissionless nature of the market: Imperial will open the ability to permissionlessly open markets soon. If you would like your asset listed as a perp, just reach out to [email protected].

Imperial has three main user groups:

• Market Backers (those who buy and hold market fee tokens, funding the market backstop and gaining a % of fees)

• Liquidity Providers (those who hold LP tokens, funding the liquidity pool for providing leverage to traders)

• Traders (those who use the perps product)

DISCLAIMER: Features and products are in alpha stages; they are experimental and provided “as is” and “as available," without warranties of any kind (including accuracy, completeness, timeliness, availability, performance, merchantability, fitness for a particular purpose, or non-infringement). On-chain actions may be irreversible. Do not rely on or assume accuracy of any information provided or displayed to you. Ensure that you independently verify all inputs and outputs (including amounts, contract calls, and approvals) before execution. You control your assets and permissions. You remain responsible for the rules/limits you set and for monitoring activity. Alpha features and products may be changed, limited, or withdrawn at any time without notice and may have reduced security, support, or uptime. By continuing, you acknowledge these risks and agree to the Terms of Service and Privacy Policy.

Market Backers

Market backers provide the backstop funds necessary for individual markets to operate by exchanging funds for market tokens. Market tokens can be staked to claim fees generated by perps run against it's underlying token. They act as a social layer to the protocol, informing it that this market is stable enough on top of which to offer leverage.

Market backers can buy market tokens originally for a fixed price from the Imperial contract and later from an AMM. As the perp trades, ½ of the open/close fees generated by the perp go to pay market token stakers. Users who buy these market tokens are betting that the market they are buying tokens from will have large volumes.

The market can offer more leverage and OI the more money it has in its backstop, which is a pool of funds held by the market. ¼ of the open/close fees the market generates go directly to this fund to benefit market token holders by expanding OI, the remaining ¼ of fees go to the LPs. The more leverage/OI a market offers, the more volume it will be able to do.

If a market has excess liquidity in it's backing fund, the protocol may rebalance funds and move the funds to the LP pool for capital efficiency.

To recap: ½ of fees generated go to market token stakers, ¼ go to the backstop, and ¼ go to LPs.

Liquidity Providers

Liquidity for the market is shared across a single LP pool. When depositing liquidity into the pool, the user is minted LP tokens that represent ownership in the LP pool.

Risks/Rewards

25% of the open/close fees of a market and 100% of the lending fees go towards increasing the assets of the LP pool.

When bad debt occurs, the market first takes losses from the backstop; however, if there is not enough liquidity in the backstop to cover the losses, the LP fund is at risk of incurring these losses.

Accounting

The market buys tokens in the underlying asset to maintain delta neutrality, and when it purchases those tokens, the USDC balance decreases; however, the the assets in the LP pool are the USDC balance + the current assets it owns (accounted on a cost basis, ie what they were purchased for).

Traders

Trading on Imperial is no different from most perp dexes a trader will be familiar with. The only main difference is that unlike most other platforms which lock close fees in when the trader opens a position, Imperial reserves the right to update close fees on the trader. If the trader closing a long takes the market massively net short (eliminating its delta neutrality), the market will charge that trader an increased fee because of the added risk it now has to take on.