You can provide liquidity directly on app.perp.com in a manner similar to Uniswap v3. In addition to choosing a price range, you will also choose how much leverage to apply.
Choosing a Range
- From the Uniswap docs: "Note that your price will snap to the nearest tick. Don't worry if you're unable to type in a nice round number! This is expected because of how ticks work in Uniswap v3."
- Once you choose a range and add liquidity, the range cannot be edited. You can remove liquidity and place it in a new range.
- You can open orders at multiple ranges, just like you would open orders at different prices on an order book exchange. (See Limits & caps for limits on number of orders.)
- When your order's range
- Is above the current price, your order will be entirely vUSD tokens.
- Is below the current price, your order will be entirely virtual asset tokens.
- Comprises the current price, your order will be some proportion of vUSD and v-asset tokens. This proportion depends on how much of your price range is above or below the current price. Learn more on this subject from the Uniswap docs.
Part or all of your liquidity can be liquidated if the value of your initial liquidity approaches the value of your collateral. Initial liquidity is the amount of base token (e.g. ETH) and quote token (USD) used while adding liquidity.
All liquidity is added using virtual tokens. You only provide collateral in the form of USDC or any of the non-USDC supported collaterals (ETH/WETH and FRAX). No base tokens (e.g. BTC, etc.) are used when adding liquidity, with the exception of ETH.
Virtual asset tokens will be minted and loaned to you when you add liquidity within or above the active price range. This loan must be paid back when removing liquidity.
Your liquidity will take one of three forms:
- 100% USD - your price range is below current price,
- Partial USD / quote token - your price range covers the current price,
- 100% quote token - your price range is above current price.
Your liquidity will be used when trades are made by takers. Adding liquidity as a maker is like posting a range of limit orders on a centralized exchange. When takers open trades that use your liquidity, you will effectively be taking positions opposite to those trades.
This means that once takers trade against your orders, you will see a position for the given asset appear in the main trading view.
Closing Maker Positions
You may close a position that opened while you are acting as a maker, but you may discover that not all of it can be closed at once. This is because you are still providing liquidity—at the same time as you close, your liquidity may be used in other trades, causing you to have a position yet again.
Maker Position Fees
You will see a fee of 0.0 for positions that opened from a trade against your liquidity.
Maker liquidity in the active range will earn or pay funding on any portion of liquidity that has been used in trades.
Once your liquidity is used to fill market orders, you will have a position with a PnL. This is also known as impermanent loss.
If you have liquidity in the active price range, you will earn trading fees in proportion to your share of the liquidity of that price range.
Fees you earn are added automatically to your free collateral.
Note that since fees are added to your free collateral, they do not auto-compound.
Removing liquidity is like canceling a range of limit orders you opened. If someone takes a limit orders before you canceled it, you end up having a "left-over" position—this liquidity cannot be removed until the trader (your counterparty) closes their position.
Alternatively, after removing liquidity you can go to the main trading view of the asset and close the position there. This will allow you to fully exit the position.
When you remove liquidity, uncollected fees will be collected automatically.
Adjusting Leverage / Managing Margin
Find out more about leverage and managing margin here: https://support.perp.com/hc/en-us/articles/5257393633945-Leverage-Margin-Ratio