Perpetual markets on are implemented with virtual automated market makers (vAMMs). This page describes how vAMMs work in general. Specifics about vAMMs on are in the pages that follow.

Trading on vAMMs

Trading on an AMM changes the ratio of assets in the pool, and therefore changes the price. One benefit of trading on an AMM is that it does not require two parties to trade; the AMM itself is always the counterparty to a trade.

In an ordinary AMM, traders put one asset into the pool and receive the other. In a vAMM, the assets in the pool are virtual, and instead of putting one asset into the pool to receive the other, traders maintain collateral in their accounts to take long or short positions.

Risks of vAMM Trading

Please make sure you understand how the market price moves when trading on a vAMM.

As in an AMM, the only way for the price to move is for users to make trades in the market. If there are not enough users making trades, the price may not converge to the price of the underlying.

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