Trader Examples
Scenario analysis and examples for Timelock Protocol traders.
Let's say a trader goes LONG 50 SS/MON with these parameters:
- Price: 1 MON = 10 SS or 1 SS = 0.1 MON
- Qty: 50 SS
- Risk Free Rate: 0
- Funding Rate: 0.01 MON per hour
Trader Deposits 1 MON as margin. 0.01 MON is deducted per hour as funding. Trade can stay open for 100 hours, but the trader can choose to add margin to make it longer.
Here are examples for closing the trade at specific prices and durations:
Trade Example (Closing After 10 Hours)
| Scenario | SS Price Change | Hours Open | Funding Deducted | Position Outcome | LP Repayment | Trader Receives |
|---|---|---|---|---|---|---|
| Trade Open | – | 0 | 0 MON | Long 50 SS (5 MON notional, 1 MON margin) | – | – |
| Close after 10h, SS +20% | +20% | 10 | 0.1 MON | Swap 50 SS for 6 MON | 5 MON | 1 MON profit + 0.9 MON margin |
| Close after 10h, SS -20% | -20% | 10 | 0.1 MON | Return 50 SS to pool | 5 MON | 0 profit + 0.9 MON margin |
| Close after 10h, SS x2 | +100% | 10 | 0.1 MON | Swap 50 SS for 10 MON | 5 MON | 5 MON profit + 0.9 MON margin |
| Close after 10h, SS -50% | -50% | 10 | 0.1 MON | Return 50 SS to pool | 5 MON | 0 profit + 0.9 MON margin |
Trade Example (Closing After 50 Hours)
| Scenario | SS Price Change | Hours Open | Funding Deducted | Position Outcome | LP Repayment | Trader Receives |
|---|---|---|---|---|---|---|
| Close after 50h, SS +20% | +20% | 50 | 0.5 MON | Swap 50 SS for 6 MON | 5 MON | 1 MON profit + 0.5 MON margin |
| Close after 50h, SS -20% | -20% | 50 | 0.5 MON | Return 50 SS to pool | 5 MON | 0 profit + 0.5 MON margin |
| Close after 50h, SS x2 | +100% | 50 | 0.5 MON | Swap 50 SS for 10 MON | 5 MON | 5 MON profit + 0.5 MON margin |
| Close after 50h, SS -50% | -50% | 50 | 0.5 MON | Return 50 SS to pool | 5 MON | 0 profit + 0.5 MON margin |
⚖️ Comparison with Traditional Perps
| Feature | Traditional Perps | No-Loss Perps |
|---|---|---|
| Liquidation Risk | High - can lose entire position | None - principal always protected |
| Funding Costs | Variable, can spike during volatility | Fixed, predictable daily rate |
| Downside Protection | None - unlimited losses possible | Principal Protected - maximum loss is funding cost |
| Upside Potential | Unlimited | Unlimited |