Real World Assets (RWA)

This page explains what RWAs are, how they differ from crypto perpetual markets, and what users should expect from them.

Trading hours

Real-World Asset price feeds are not available 24/7. Since the perpetual market should track the price of the underlying gold, oil, stock, or index, we need to take measures when no price source is available. During trading hours, these markets behave just like crypto markets. Outside trading hours, the markets enter a reduce-only mode, where participants can submit only reduce-only orders.

For example, you can place a reduce-only limit order or submit a reduce-only market order.

Outside trading hours, the index price will not update. The mark price can move by up to 0.5%, depending on order book prices. Funding payments continue as normal outside trading hours.

Leverage

Leverage does not change outside trading hours. If you’re holding a 10× long position on Gold (XAU), your position remains unaffected, and there’s no need to reduce it. However, be aware that prices may swing significantly at market open.

Market structure

All RWA markets will operate in isolated mode only. It is not possible to open RWA positions in cross-margin mode due to the experimental and volatile nature of these markets.

XLP

Because RWAs are still experimental, we are taking precautions in deploying them. LLP will not act as a market maker on RWA markets. Instead, a new pool called XLP (Experimental Liquidity Provider) will offer liquidity for these markets. LLP will have no exposure to RWA markets.

XLP will act solely as a liquidity provider for these markets, without a special role in the liquidation flow. More details on liquidations can be found below.

Liquidations

Due to the nature of RWAs and the addition of XLP, the liquidation flow will change. RWA markets will have no liquidation fee.

If a user needs to be liquidated — that is, when their margin falls below the Maintenance Margin but remains above the Close-Out Margin — the exchange will send an Immediate-or-Cancel (IoC) order on behalf of the user to close the position. This will not have a fee associated with it.

If the user falls below the Close-Out Margin, they will be directly Auto-Deleveraged (ADL). This flow differs from crypto markets, where the entire account would typically be transferred to LLP. In normal cases, ADL is used only when LLP does not have sufficient funds to cover the losses of a bankrupt account.

Note: ADL occurs when a user is below the Close-Out Margin. This does not imply that the user is bankrupt. Because of this, the counterparty (the trader on the other side of the ADL) receives a more favourable execution price.

Note: For Silver (XAG), the maximum leverage when opening a position is 10×. Users are liquidated through the order book when leverage reaches 16.6×. When leverage reaches 25×, the entire position is ADL'ed. (All such positions use isolated margin only.)

Example: If a user holds a long $1,000 XAG position with only $40 in collateral (for that isolated-margin position) and the price of XAG is $50, the entire position would be ADLed.

Assume the position is fully deleveraged with a single counterparty. The counterparty — who holds a short position larger than $1,000 — will have their position reduced by $1,000 and will receive the $40 USDC in collateral. This effectively means the counterparty opened a long position at an average entry price of $48.