Pairs Markets

What is a pairs market?

A pairs market lets you trade the relationship between two assets instead of either asset outright. SOL/BTC is the first one: long means "SOL outperforms BTC," short means "BTC outperforms SOL." You have no net exposure to the overall market going up or down — if SOL and BTC both pump 10%, a SOL/BTC position is roughly flat.

It trades like any other perp on Imperial: one position, one price, USDC collateral, leverage, TP/SL, funding, liquidations. Under the hood there is no spot pair being traded anywhere — the price is a synthetic index composed from the two assets' USD oracle prices, and your counterparty is the pairs liquidity pool.

Beta Weighting

The obvious way to build SOL/BTC is the raw price ratio (what TradingView shows for SOLBTC). We don't use that, on purpose.

The problem with the raw ratio: SOL is much more volatile than BTC (roughly 79% vs 46% annualized). A 1:1 ratio is dominated by whatever SOL does — it's mostly just a leveraged SOL bet with extra steps, not a bet on relative performance.

What we do instead — beta weighting: we scale each leg so both contribute proportionally to their volatility. From two years of daily data, SOL's beta to BTC is ~1.40 — so the index is built as if every $1 of SOL exposure is hedged with $1.40 of BTC. Normalized, that's:

• SOL weight: 41.7%

• BTC weight: 58.3%

This makes the index genuinely market-neutral: its residual correlation to BTC is ~zero (the naive 1:1 ratio still carries about +0.19 BTC beta). The result is an index that isolates "is SOL winning or losing vs BTC" — about a third as volatile as BTC itself (~0.7–0.9% daily moves).

The formula. The index is geometric (built from log returns), so it moves symmetrically and can never go negative:

index = anchor × exp(0.417 × ln(SOL / SOL_anchor) − 0.583 × ln(BTC / BTC_anchor))

The anchors are the leg prices captured when the market was listed; the index started at an arbitrary reference value and compounds relative performance from there.

So versus TradingView SOLBTC:

1. Different weights. TV's ratio is effectively 1:1 in log terms; ours is 0.417 / 0.583. Direction usually agrees, magnitude doesn't — our index moves less when SOL moves and more when BTC moves.

2. Different level. The index value is anchored to a reference at listing, not to the raw SOL-per-BTC ratio, so the absolute number is different. Only returns are comparable.

3. If you overlay SOL − 1.4×BTC style beta-weighted spreads on TV you'll get close; the raw SOLBTC symbol will not match and isn't supposed to.

The chart on Imperial shows the index plus optional raw SOL/USD and BTC/USD leg overlays (rebased to 100) so you can see which leg is driving a move.

Where prices come from

• Both legs price off Pyth oracle feeds (SOL/USD and BTC/USD) — never any exchange's orderbook mid.

• If either leg's oracle is stale, the market treats the whole index as stale and halts pricing rather than quoting off one live leg.

Fill price: skew impact instead of spread

There is no orderbook, so instead of a bid/ask spread the execution price carries a skew impact premium (the Synthetix v2 model). The book's skew is total long OI minus total short OI. Your fill is:

fill = index × (1 + (skew_before + skew_after) / (2 × impact_scale))

clamped to a max impact (current: ±30 bps on SOL/BTC).

What this means in practice:

• Trades that increase the imbalance pay a premium; trades that reduce it get a discount. If the book is long-heavy, new longs buy above index and new shorts sell above index (they're paid for balancing).

• Because the premium is averaged over the skew your trade traverses, the mechanism is path-independent — an instant open-and-close round trip fills at the same price both ways and costs only the flat fees. There is no rebate pot to farm.

• The premium/discount goes to the liquidity pool, compensating it for warehousing the imbalance.

Opens, closes, and liquidations all price at the fill, not the raw index — your liquidation health is computed against the price you could actually exit at.

Funding

Funding is proportional to skew: the heavy side pays the light side continuously.

rate per day = k × net_skew / skew_scale     (clamped at a max)

Positive skew (long-heavy) means longs pay, shorts receive; funding accrues per second against your notional and settles when you close (it's included live in your PnL and liquidation health). A balanced book pays nothing. On the portion of skew that no trader balances, the pool itself collects the funding — it's paid to warehouse the residual risk.

PnL

Positions are fixed-notional. For a long:

pnl = notional × (index_now − entry_fill) / entry_fill

(mirror-image for shorts). Example: $1,000 long SOL/BTC; SOL +2%, BTC +1% → index moves ≈ 0.417×2% − 0.583×1% = +0.25% → +$2.50. Note that your PnL is measured from your entry fill (which includes any skew impact), not the raw index at the moment you clicked.

Per-position basket locking

Your position locks its exact basket (the SOL/BTC weights and leg anchor prices) at open. If we ever re-estimate beta and reweight the market index, existing positions are untouched — they keep tracking the basket they actually bought, and the new weights apply only to positions opened afterward. Adding to a position blends the tranches (notional-weighted entry, delta-preserving weights).