# Welcome to World Markets! ### Trade Perps, Spot, and Lending fully on-chain. On World, every dollar works harder. Universal margin gives you more leverage and more yield than any other exchange. World is deployed fully on-chain. It is non-custodial. The contracts are immutable and non-upgradable - except during Beta, the contracts will be upgradable. The front end UI communicates directly with the blockchain. There is no backend server. Trading is permissionless. World processes orders at \~10ms block times and near free gas costs, leveraging MegaETH's real time performance. **If you don't find answers here, make sure to visit our** [**forum**](https://forum.world.inc/)**, where users ask and answer each others questions!**
### Get Started
Cover image
Start TradingEverything you need to know to start trading./pages/7FvWQMF0kTK7HGhlQfmo/files/wAFNrV70UpD0lZV1mqhx/pages/7FvWQMF0kTK7HGhlQfmo
Available MarginUnderstand this critical feature of World./pages/rZM3yMde1aJ5xSE52fTw/files/awhTwiU4RfnvqFlbnM6K
Deep DiveDive deeper into ATLAS, the secret sauce behind World./pages/i73g4LZQanoLj7XtSO18/files/u2OaS5OHf6EYwmWFib9T
### Professional Traders For professional traders, we recommend first reading [ATLAS - World's Risk Engine](/tl-dr-unique-features/atlas) and [The Capital Sink](/tl-dr-unique-features/the-capital-sink) to understand the value proposition, and then jumping to [Details](/details/atlas-math-risk-based-valuation) to see the implementation details. If you would like external capital, see [Broken mention](broken://pages/zTBPgJtO6bUF31su0w2b). ### Beta Trade at your own risk; we do not guarantee any functionality. The code is very new and very complex and prone to errors and security risks. World's documentation is written on a best effort basis. Only deposit what you are willing to lose entirely. ### Disclaimer This entire website and everything on the world.inc domain is provided for informational purposes only and does not constitute legal, financial, or tax advice. You should consult with qualified professionals before making any decisions based on the information presented. # How to start trading ## What do I need to trade on World? 1. Bridge USDT to MegaETH [here](https://stargate.finance/?srcChain=ethereum\&srcToken=0xdAC17F958D2ee523a2206206994597C13D831ec7\&dstChain=megaeth\&dstToken=0xB8CE59FC3717ada4C02eaDF9682A9e934F625ebb). Swap it for USDM in the USDT/USDM spot order book. 2. Deposit any asset listed in the **spot** **market**. Turn on 1-click trading. 3. Select a perps, spot, or loan market from the Order Panel or the Search Bar. 4. All positions are used as collateral for all other positions, which lowers your per-position liquidation prices. Read [Available Margin & Collateral](/essentials/available-margin-and-collateral). If an asset is listed in the spot market, you can deposit it and use it as collateral for all of your trading. Do not deposit any asset is not listed on the exchange. If you are depositing assets from another chain, bridging is integrated into World's deposit workflow on the UI. Read [Accounts & Trade Only Access](/essentials/accounts-and-trade-only-access#trade-only-access) if you prefer a more secure setup. Never give us or anyone your private key, unconditionally. Once you're comfortable with the basics, read [Trading](/essentials/trading). ## How do I trade? All markets and products on World are traded from the same interface. Order quantities are always rounded to a minimum order size. The quantity input will "jump" your input to the nearest order size increment. We recommend reading [Available Margin & Collateral](/essentials/available-margin-and-collateral) before getting started to understand how World uniquely calculates your portfolio risk to unlock returns and lower your risk. ## Paying funding rates in USDM We recommend always holding a certain amount of USDM if you are trading perpetual futures. Perps are always settled in USDM. If you owe USDT on a perp payment, and have none, World automatically borrow USDM to settle the perps payment. You will then need to eventually pay the interest on the loan and repay the loan principal. ## 1-Click Trading After depositing, you can turn on 1-click trading in the account drop down or in the account page.
When you turn it on, it will ask you for a password. Your password is used to create a wallet which will hold gas and sign for you in your browser without requiring additional clicks or confirmations. If your 1-click trading wallet runs out of gas, you need to "top up," i.e. send it more ETH. World will alert you with a notification if your gas balance gets low. When you turn off 1-click trading, the gas money is automatically withdrawn to your wallet. ## Hotkeys We love hotkeys! In the order panel, use `u, i, o` to switch between perps, spot, and lending markets in the order panel. Use `j, k` to switch between long and short. Hit `command + enter` to execute. To switch tabs in the trading table, use `q, w, e, r` . ## MegaETH [MegaETH](https://www.megaeth.com/) is an Ethereum Layer 2. It runs on a single sequencer, making it effectively centralized. Block times are \~10ms and gas is extremely cheap. We chose MegaETH, because we wanted an exceptionally fast and cheap trading experience for our users. We think it is important that our blockchain is a general purpose Ethereum L2, to make bridging large size easy and secure. L1 blockchains suffer from a conflict of interest - if they increase the value of their token, hodlers are rewarded, but gas is more expensive which hurts users, applications, and network activity. L2s do not suffer from this challenge. We believe DEXs especially benefit from general purpose chains due to platform economics. ## Risks Read [Risk Parameters & Stats](/essentials/risk-parameters-and-stats) to understand how much leverage traders can take on World. Read [Counterparty Risk](/venue/counterparty-risk) to understand security and operational risks. Read [Risks](/getting-started/risks) to read about general risks. ## Bridging & Depositing Users can bridge to MegaETH via the canonical bridge or intent based bridges serviced by individual providers. We recommend using the canonical bridge for any meaningful size, because it is free and secure. The UI integrates bridging into the deposit flow, allowing users to chose which bridge they use and where they bridge from. The canonical bridging process is a mint and redeem function to avoid incurring slippage from bridging flows. The bridge has shared security with Ethereum mainnet, so users can comfortably bridge larger size. You may bridge and deposit any asset that is listed in World's spot market. Make sure to either use World's UI or call the `exchange.deposit` function to deposit. Never `transfer` assets to World, these assets will be lost, even if they are listed in the spot market. # Developers For programmatic traders and developers, please ask us for access to our Github repo. We will soon publish the whole front-end code and all SDKs. Until we are able, please ask us for private access. See [Developers](/developers/smart-contract-docs) for SDKs. ## Pretty Quick Start Please read [/pages/ngDRVJDYHKtkLs6KAr0U#trade-only-access-i.e.-owner-trader-separation](https://docs.world.inc/getting-started/pages/ngDRVJDYHKtkLs6KAr0U#trade-only-access-i.e.-owner-trader-separation "mention") before you start writing production code, otherwise your nonce management will be hell. Most production setups use a multi-sig (i.e. Safe contract) or offline key as account Owner and designate 2 or more keys as trade-only keys. Currently, trading via trade-only keys is only available programmatically. In the near future, the UI will be updated to handle this perspective as well; you can set your keys with this delegated access in the UI. [This code](https://github.com/World-Markets-Inc/contract-owner) will be audited in the near future to securely automate depositing and withdrawing as well. To save on gas costs and improve uptime, batch your orders into a single transaction. It is most common to batch a cancel and new order together to "reprice" limit orders. You can batch orders across markets and even across other venues on MegaETH. Order batching is not necessary for testing; it is important to be aware of before starting on your production code. ## MegaETH Mini-Blocks Mini-blocks allow MegaETH to operate at 10ms block times. You need to use them for high frequency trading. Read [Mini-block docs](https://docs.megaeth.com/mini-block). ## Swap & Router Integration swap\_router = 0x94b6706fa26a4f3dcf501ff25e1e4628b75adc69 # Market Making Start with [Developers](/getting-started/developers) for an overview of programmatic trading on World. World has natural taker flow through aggregators and integrated retail apps, which MMs can tap into if the quoting is sufficiently tight. ## Perps & Spot: Hedging Market makers on World should aim to quote all listed perps and spot markets. The risk engine is designed to maximize capital efficiency, which maximizes the expected value of quoting an additional market. For example: 1. Assume starting balance is $1M [Denomination: USDM](/venue/denomination-usdm). 2. Your BUY maker order in the spot market is filled for 1 ETH. Your [Available Margin & Collateral](/essentials/available-margin-and-collateral) will go down slightly because you have increased your market exposure. 1. NOTE - your ETH still counts as collateral, it is just worth less than the equivalent value in [Denomination: USDM](/venue/denomination-usdm) because of the associated market risk. 3. Let's say upon fill, you immediately place an order in the perps market to SHORT 1 ETH and get filled. Now, you are market neutral, and your [Available Margin & Collateral](/essentials/available-margin-and-collateral) will increase back to nearly full, allowing you to quote more size. ## Spot Market Making Spot market making tends to start with borrowing the spot asset from the lending market. Almost all (if not all) market makers for Spot are using leverage. For example: 1. Assume starting balance is $1M [Denomination: USDM](/venue/denomination-usdm). 2. You borrow 2,000 ETH from the ETH loan market. Let's say the market rate to borrow ETH is 3%. All loans have 10 day durations, which means you will owe the lender 2000 x 3% x (10/365) = 1.64 ETH in 10 days (equivalently, 60 ETH annualized). Borrowing ETH looks like this; the Spot ETH is the asset and the Borrow ETH is the liability. Borrowing does not introduce market exposure.
3. You don't want any market exposure to ETH, so you decide to long 1.64 ETH Perps. 4. You also borrow another $4M USDM, so that you have roughly the same value of USDM and ETH to quote with. 5. Now, you quote $4M USDM total notional of ETH Spot BUY orders and 2,000 ETH total notional of ETH SELL orders, and you have $1M USDM remaining which cannot get filled because you decided to only quote with the $4M USDM you borrowed. 6. An ETH Spot Buy order gets filled. Read [#perps-and-spot](#perps-and-spot "mention") for a good way to hedge. Observe that you can borrow any Spot asset which has a lending market, and borrow many Spot assets at the same time. Your only limitation is your Available Margin, which is only materially affected by the interest rates you owe on the loans and any orders that get filled and introduce market exposure (that is until you hedge it). Read more about borrowing: [Lending](/details/lending#borrowing). # Why you care ## Your dollars work harder on World On World, every dollar works harder, which means you can make more money for less risk. Read [ATLAS - World's Risk Engine](/tl-dr-unique-features/atlas) to see examples and understand the underlying mechanics. World is deployed fully on-chain. There is no backend nor app-chain; World does not secretly control any part of the execution. World minimizes counterparty risk by maximizing transparency. The smart contract code will be made publicly available once liquidity is bootstrapped. Trading is fully permissionless. ## Unique Benefits Unique benefits of World include: * Use yield bearing tokens as collateral. * Never sell your crypto - use it as collateral to trade. * Use certain vault tokens as collateral. * Earn yield on your collateral by lending it out. * Borrow under-collateralized. * Fixed rate, fixed 10 day term loans. * Safely take more leverage by hedging portfolio level risk. * Safer liquidation levels than other perp DEXs for the same portfolio. * Make more money as a market maker. Quote above your balance by borrowing (i.e. "leverage on spot"). * Capture market arbitrage in 1 click. No more need for looping on over-collateralized venues. * Avoid triggering potential taxable events by borrowing and trading with the borrowed capital. Not financial or tax advice. * Full onchain, non-custodial, non-upgradable, immutable smart contracts. Contracts will be upgradable during Beta. ## Fast and Cheap. World processes transactions at \~10ms block times, leveraging MegaETH's real time blockchain technology. ## Fully Onchain, Non-custodial, Immutable Full onchain, non-custodial, non-upgradable, immutable smart contracts. **Contracts will be upgradable during Beta.** ## Disclaimer This documentation and everything at the wcm.inc domain is provided for informational purposes only and does not constitute legal, financial, or tax advice. You should consult with qualified professionals before making any decisions based on the information presented. # MegaETH ## General MegaETH docs. {% embed url="" %} Preferred block explorer. {% embed url="" %} We believe most users bridge [(USDT) with Stargate](https://stargate.finance/?srcChain=ethereum\&srcToken=0xdAC17F958D2ee523a2206206994597C13D831ec7\&dstChain=megaeth\&dstToken=0xB8CE59FC3717ada4C02eaDF9682A9e934F625ebb). Tokens and addresses on MegaETH: Mainnet docs: ## Adding MegaETH Network to a Wallet | **Chain ID** | 4326 (0x10e6) | | ---------------------- | --------------------------------- | | **Native & Gas Token** | Ether (ETH), 18 decimals | | **RPC URL** | | | **Block Explorer** | | ## Bridging Bridging is typically asset specific. It's best to reference the intended asset in [Listings](/listings/btc.b). For general bridging on MegaETH, MegaETH supports: . USDT is typically bridged via [Stargate](https://stargate.finance/?srcChain=ethereum\&srcToken=0xdAC17F958D2ee523a2206206994597C13D831ec7\&dstChain=megaeth\&dstToken=0xB8CE59FC3717ada4C02eaDF9682A9e934F625ebb), which can then be used to get USDM, which is typically used as the main stablecoin on MegaETH. # Risks ## Risks & Challenges A decentralized exchange (DEX) like World involves a variety of **technical, operational, regulatory, and liquidity risks**. Despite efforts to mitigate these risks, such risks, and other risks both known and unknown remain present, and all users must fully accept such risk, including total loss of capital, before using WCM. Below we outline some of the challenges and our approaches to mitigating them. ### Beta World is currently live in Beta. It is a brand new DEX, with very custom code, on a new chain. The UI has known bugs, which are kept track of publicly [here](https://github.com/World-Markets-Inc/client/issues). Use at your own risk. Please, do not underestimate the risks of bugs. ### Technical Risks On-chain decentralized exchanges depend on **smart contracts** and **blockchain infrastructure**, which introduce several risks: * **Smart contract vulnerabilities** * Coding errors or exploitable logic flaws can lead to hacks or loss of user funds, as seen in past DeFi exploits. * Mitigation: * Automated tests with high coverage * Independent code audits * Careful code review and secure coding practices * **Network congestion & high gas fees** * On older or slower chains (e.g., Ethereum mainnet), peak activity can make trading **expensive and slow**. * World is designed only for a **low-latency, high-throughput, extremely cheap blockchain**. It is deployed on MegaETH. * **Oracle dependencies** * Manipulated or delayed price feeds can cause **inaccurate pricing** or **arbitrage attacks**. * Mitigation: * Careful monitoring of oracles * Switching providers if failures are detected * Potential use of **redundant on-chain oracles** * **Front end** * The World Markets protocol operates fully onchain. When a user connects to the website, a server sends the user the full front end code required to connect and use the protocol. Like any website, this server can go down. When this happens, the protocol continues to operate without pause, but your "normal" way of accessing the protocol will be interrupted. To prevent this, we recommend having multiple ways to use the protocol, including saving multiple front end providers or using programmatic access. Potentially, the most reliable way to access the protocol is to download the front end code and run it locally on your computer, this gives you the same UI, without relying on any 3rd party to use the protocol. ### Operational Risks Operational functions on World include: * List new assets for trading spot, perpetual futures, and lending. * Trigger circuit breakers and pause trading in specific markets. * Set maker and taker fees per account. * Turn off the exchange permanently. This function may be deleted in the future. * Upgrade the smart contracts ONLY during Beta, primarily for security reasons. ### Regulatory Uncertainty Regulation poses one of the largest risks to decentralized exchanges: * **Challenges** * DEXs are **permissionless and borderless**, making them harder to regulate. * Lack of intermediaries complicates **KYC/AML enforcement**. * **Global landscape** * Legal uncertainty could affect **user accessibility** and the **long-term viability** of certain DEX models. * World restricts UI access to non-US IP addresses. Similarly, the UI blocks access from countries with heightened sensitivity to OFAC-related sanctions including North Korea, Iran, Russia, and others. Wallet addresses which are known to be held by sanctioned parties are also blocked by the UI. ### Liquidity Challenges Liquidity is a fundamental challenge for all DEXs, especially compared to centralized exchanges: * **Low on-chain liquidity** * On-chain order books can suffer from **low depth** and **high slippage**, particularly for less popular tokens. * Fragmentation across multiple blockchains limits deep liquidity on any one platform. * **Interoperability hurdles** * Assets are often siloed in different ecosystems. * Cross-chain liquidity remains limited despite emerging bridges and aggregation protocols. * **World's approach** * **Active liquidity providers, some of whom may be market makers, as a core user group**: * Technical: transactional bundles (including fused cancel-rebook instructions) **lower gas costs** * Financial: low or zero fees for market makers * Maximal capital efficiency features maximizes profitability across the venue. ### Leverage Read [Risk Parameters & Stats](/essentials/risk-parameters-and-stats) to understand how much leverage traders can take on WCM. # Restrictions Customers in the United States are not allowed to trade on World Markets. Similarly, customers in the United Kingdom are blocked. OFAC sanctioned individuals are unconditionally banned. It's a permissionless protocol, so the smart contracts do not have the ability to detect or ban specific users or specific geographies, nonetheless consumers in restricted jurisdictions are unconditionally banned. Blocking is enforced at the UI level, based on IP addresses and wallet addresses. Countries with high OFAC-related risks are blocked by the UI; however, users living in those countries, who are not sanctioned by OFAC, may still be allowed to use the product. Here is the list of blocked countries, which we consider high OFAC-related risk, but may still have users who are allowed to use the product: * Russia * Venezuela * Belarus * Syria * Myanmar * Sudan & South Sudan * Afghanistan Read the Terms of Service here: # ATLAS - World's Risk Engine The heart of World is its universal margin account, powered by ATLAS. Some useful features include: * Use any mix of yield bearing tokens, crypto, and stablecoins as collateral. * Earn yield on your collateral by lending it out. Loans count towards collateral. * Use vault tokens as collateral, including WLP (World's market making vault). * Safer liquidation levels than other perp DEXs for the same portfolio. * Borrow under-collateralized. Fixed rate, fixed 10 day term loans. * Hedging enables more portfolio leverage and lowers your risk of liquidation. * Make more money and quote with higher exposures as a market maker. * Capture market arbitrage in 1 click. No more need for looping on over-collateralized venues. * Avoid triggering taxable events by borrowing and trading with the borrowed capital. The below description illustrates the behavior of the risk engine through examples followed by a conceptual explanation. ## Trade Examples Note that the below examples are all hypothetical scenarios for the purpose of describing the mechanics of World. They nothing on this page, nor in the broader documentation, nor on the UI, nor off the UI provides a guarantee of any kind. Every trade has risks. Every trade is sensitive to the market environment. #### 1. Levered Basis Trade ATLAS understands net market exposures. Here’s what ATLAS lets you do: 1. Given a balance of $100 USDT 2. Borrow $900 USDT in World's lending market at e.g. 5.5% (Aave's borrow rate today). 3. Buy $1,000 of ETH spot. 4. Short $1,000 of ETHUSD perps. Under the same assumptions, the World trader is now a return of 50.50%. The macro-economics effects of this trade are described in [The Capital Sink](/tl-dr-unique-features/the-capital-sink). Here are the returns of the basis trade on World compared to alternatives.
World allows you to do this trade in 1 click, as described in [Trades](/tl-dr-unique-features/trades#the-bullish-leveraged-basis-trade).
#### 2. Yield Bearing Multiplier Stake-able assets such as ETH and SOL provide a return. Historically \~3% for ETH and 7.5% for SOL. Meanwhile, perps for these assets typically pay funding rates >10%. On World, you can use your staked assets as collateral for short perps, allowing you to safely earn a return on the staked asset and additionally on the perp. Furthermore, you can borrow USDT in the lending market to use as leverage to buy staked assets and increase the notional of your short perp to earn more funding - **multiplying your already enhanced returns.** **3. Tax advantages** Selling your crypto may be a taxable event in most jurisdictions. What if you didn't have to sell? Not financial advice. **4. ETH Maximalist & ETH Vaults** HODL! as they say. Let's say you're a die-hard ETH bull (God bless you). You don’t want to sell ETH, so you deposit WETH on World. That ETH immediately works for you in three ways, simultaneously: * Perps: You can leverage long ETHUSD perps using your WETH as collateral. * Yield: At the same time, you can lend your WETH to earn yield. * Portfolio Leverage: Use that WETH as collateral to borrow USDT, applying portfolio leverage. * Spot Exposure: You never sold your ETH to open any positions, which may be great for tax reasons - we wouldn't know, ask a tax professional. In one move, you’re long ETH in three dimensions: spot, leveraged futures, and yield - and you can trade with that USDT you borrowed. #### 5. Auto-Earn On World, lent capital contributes 98% of its value to your available margin. If you have $100 USDT in your portfolio, then you have $100 of available margin to trade with. If you lend out all $100 to earn 8%, you are now earning **an additional 8% on top of your normal trading PnL, because 98% of the value of your loan contributes to your available margin to trade.** ## Risk Concepts Visit the Stats page on World to see the relevant risk metrics described in this section. Read [Risk Parameters & Stats](/essentials/risk-parameters-and-stats) to understand how much leverage traders can take on World.
### Asset Volatility Assets which are more volatile are assigned higher risk scores and consume more margin. This protects users from being exposed to counterparties with too much risk. ### Net Market Exposure ATLAS nets your market exposures based on the underlying asset. For example, if you hold a 10 ETH spot balance, and short 10 ETH perps (i.e. in equal size), ATLAS nets the market risk of those positions to 0. In other words, that position cannot be liquidated based on the price path of ETH. ATLAS allows you to borrow large amounts of capital to maintain this position, because it understands your risk more holistically. Note that it is possible for spot and perps markets to deviate for the same asset, usually temporarily. ### Perps, Spot, and Lending World has perps, spot, and lending markets fully integrated into 1 trading venue. This integration is necessary for World to deterministically and accurately evaluate risk. **Every "value" computation is trade-able on the venue.** World prevents griefing and manipulation by using different value computations for different contexts. In general, World computes value based on post-execution quantities. ### Post-Execution Costs When entering a trade, ATLAS looks at the post-execution cost of the trade. Post-execution costs means it factors in costs of execution, including "slippage" from market depth and exchange fees. This nuance is necessary to mitigate counterparty risk. World has implemented safe-guards to prevent griefing this calculation. ### Calculation Details * Spot assets are valued based on the post execution cost for USDT. * Lender-side loans contribute 98% of the notional value of the loan to the available margin. * Every asset has a risk-specific parameters associated with it, set by World, and displayed transparently on the More > Exchange Stats page. * The risk engine values every position under the scenario where the market moves against it, based on its risk coefficient. * Unrealized PnL automatically contributes fully to available margin. The equations are detailed in [ATLAS Math: Risk Based Valuation](/details/atlas-math-risk-based-valuation). # Trades The Trades menu give users pre-packaged bundles which execute multiple orders at once. A group of orders executed simultaneously is called a "bundle." You can create generic bundles using [Bundle Mode](/essentials/bundle-mode). ## The Bullish Leveraged Basis Trade The Bullish Leverage Basis Trade strategy is the first trade described in [ATLAS - World's Risk Engine](/tl-dr-unique-features/atlas). You can, with 1 click, put this trade on by selecting it in the Strategies tab. Read how to manage and **unwind** it here:
* **APR:** The annualized return of the trade given current market rates. These rates can change after putting on the trade. * **Liquidation Price:** Technically, the trade cannot be liquidated based on the price path of the underlying asset. It can however be liquidated due to widening spreads at very high leverage. The liquidation price is a heuristic, aimed to estimate a price swing, at which the spreads could become wide enough to liquidate the positions. * **Estimated Cost:** The cost of entering into the trade, i.e. the execution cost. It is trading fees (maker/taker) + any slippage (market impact) incurred from executing at a very large size. * **Days to break even:** Given the APR, the number of days it will take to recover the execution cost. The basis trade benefits from duration. The longer you stay in the trade with the rate gap persisting, the more money you make. If you have to enter and exit a basis trade frequently, you may lose money due to the inherent execution costs of trading. ## Disclaimer This documentation and everything at the wcm.inc domain is provided for informational purposes only and does not constitute legal, financial, or tax advice. You should consult with qualified professionals before making any decisions based on the information presented. # Cross Venue Arbitrage ## Funding Rate Arbitrage World applies natural *downward* pressure on funding rates due to its ability to arbitrage lending and perps markets. When this arbitrage happens, rates are pushed towards each other, which typically makes lending rates higher than other venues and funding rates lower. This process is described in [The Capital Sink](/tl-dr-unique-features/the-capital-sink). This mechanic opens up a trading opportunity for arbitrage traders. If you open one perp on World and another perp on another exchange in the opposite direction, you will make the in difference rates as profit. Typically, the challenge with funding rate arbitrage is predicting the **duration** of the rate difference. Because there is no other exchange with a similar risk engine, especially across DEXs, this difference should in theory persist longer on World than other exchanges. ## HFT Trades on World are expected to be processed at \~10ms intervals. The consequence is that unlike DEXs with slower block times, latency sensitive software gives traders a unique advantage on World. We suggest reading [Broken mention](broken://pages/KNzqDWn9HvdgWYGD1wGq) if you are able to provide market making services. World offers a CEX-like API. # The Capital Sink This description is still work in progress. Images and diagrams coming soon TM. ## World: Arbitrage, Equilibrium, and the Capital Sink Funding and lending rates should be almost exactly equal - historically, they are not. World closes this arbitrage, which sucks capital, generating profit for World users who close the arbitrage. ### Why it exists In theory, lending and funding rates should converge in an efficient market, but on-chain history shows they have not. The reason is structural: closing this gap requires a venue that unifies lending and perpetuals under a single risk engine. Without such unification, the spread remains open. ### Internal arbitrage World solves this by recognizing that a loan, a spot position, and a perp hedge can net to zero market exposure. With unified risk management, traders are able to apply more leverage than anywhere else. The arbitrage is simple: borrow at the lending rate and short the perp at the funding rate. The difference between the two becomes profit, amplified by leverage — e.g., a 5% spread turning into a 50% return. If the rates flip, the trade can be reversed. This opportunity extends across all liquid assets, especially yield-bearing pairs like ETH–stETH or BTC–LBTC, as long as they are listed in both lending and futures markets. Over time, however, lending and funding rates on World converge. For example, a 5.5% lending rate and an 11% perp rate would settle around 7.75%. That convergence introduces *new* arbitrage opportunities, now between World and external venues such as: * Lending platforms like Aave or Morpho * Perps venues like Hyperliquid or Lighter Because World's structure is fundamentally different, these external spreads persist until capital moves in to close them. ### The Iterative Arbitrage Cycle The arbitrage mechanism follows a repeating cycle: * **Starting point:** World's lending rates mirror Aave’s (\~5.5%), while its perps track Hyperliquid (\~11%). * **Internal arbitrage:** Traders close the lending–perps spread within World, forcing internal equilibrium. * **External arbitrage:** That equilibrium exposes spreads with external venues, creating incentives for inflows. * **Iteration:** As traders exit, they unwind arbitrages, reopening spreads for new entrants.
With each cycle, capital is pulled inward. The process only ends when World is in equilibrium with the broader market — but crucially, that equilibrium requires capital to *sit on World*. ### The Capital Sink Effect This dynamic is what makes World a **capital sink** — capital naturally flows into it without external incentives. In finance, capital efficiency functions like gravity: liquidity is drawn to wherever it can be deployed most effectively. #### Flow of Capital The gravitational pull of World may play out in predictable stages: 1. **Local inflows** (\~$100M TVL): capital shifts from World's nearest neighbors on the same network. 2. **Network inflows** (\~$50B TVL): liquidity expands outward into adjacent networks. 3. **Global inflows** (\~$500B TVL): eventually, World's pull extends across all comparable markets, from crypto to FX (stablecoins). ### Conclusion: Gravity Beyond Crypto World's unified structure doesn’t just eliminate a temporary inefficiency; it creates a self-reinforcing cycle. Each round of arbitrage strengthens its gravitational pull, concentrating liquidity inside World until it becomes the central clearinghouse for rates. In this way, World is more than just another exchange. It is a true **capital sink** — one where liquidity doesn’t need incentives, only the gravity of productivity. And over time, that gravity is not limited to crypto. Wherever rates exist, the same mechanism applies. # Available Margin & Collateral ## What is Available Margin? Your Available Margin is the amount of margin you can consume to open new positions. If it reaches 0, you get liquidated. You consume available margin when you take risk. You increase available margin when you deposit or lower your risk. ## What contributes to my available margin? 1. The market (notional) value of all your spot positions 2. 98% of the market (notional) value of all your loans (lender-side) 3. Vault investments, where the vault token is listed in the spot market 4. All unrealized PnL of your perps 5. The 10 day interest rate on your borrowed positions (subtracted from available margin) 6. Hedged positions of a common underlying asset. For example, if you hold ETH and are short an ETHUSD perp, the notional which is hedged counts towards your available margin. These variables all add up to your available. ## How is it calculated? The risk-adjusted value of a position is simply the value of a position after factoring in a sharp price movement against it. In general, the more volatile an asset, the more available margin will consume. Each underlying asset is assigned a risk score, which enters into the equation. The risk scores are published on the [Stats page](https://staging.wcm.inc/#/exchange) of the UI. You can see how your margin is computed on the Margin Calculation tab in the UI. The following portfolio results in the following margin calculation.
The USDM spot contributes in full to the available margin because it is a spot position. The ETH loans and the short ETHUSD perp net out, also contributing to available margin. The margin calculation shown above looks at the net market exposure to ETH in this portfolio. In this case, the direction is net long because the ETH loans are larger than the short ETHUSD perp. Because the direction is net long, the margin calculation values those positions at a "shock price" *below* the market price. If the positions were net short, the margin calculator would value the positions *above* the market price. In this case, at the shock price, the ETH spot position would worth $2,287.68, the ETH loans would be worth $2,122.31 and the short ETHUSD perp would be worth $360.40. The short BTCUSD perp is directionally short, with no hedging position (i.e. no spot or loan positions to offset the net market exposure). The margin calculator therefore values this position at a shock price above the market price, which would result in a $9,015.64 loss. $9,015.64 is then subtracted from available margin. You can use the [Bundle Mode](/essentials/bundle-mode) feature to experiment with different portfolios and trade bundles. The math is detailed in [ATLAS Math: Risk Based Valuation](/details/atlas-math-risk-based-valuation). ## Are there leverage limits? Most exchanges manage risk by setting lower leverage limits for risker assets. On World, riskier assets consume more available margin, which enforces a natural limit. If you have a well balanced portfolio, the limits are higher. ## How does borrowing work? Importantly, when you Borrow, the Borrow position is a liability, not an asset. When you borrow, you will see both your spot balance increase for that asset (or appear new if you had none) and a new Borrow position appear. The increase in Spot is the asset, and the Borrow position is the liability. Borrowing, without selling, results in no change in net market exposure. Because net market exposure for borrowing alone is 0, users can borrow a lot of an asset, especially [Denomination: USDM](/venue/denomination-usdm). For example, this Portfolio has no market exposure to ETH.
And this Portfolio is short 0.5 ETH.
## Can I isolate positions? While it is less capital efficient, if you want to isolate positions, we recommend using [Sub-accounts](/venue/sub-accounts). You can create a new sub-account, transfer assets from your main account to the sub-account, and trade there. The positions in a sub-account are isolated from your main account and all other sub-accounts. ## What assets are eligible for collateral? Assets are eligible as collateral if and only if they are listed in the spot market. All assets listed in the spot market are eligible as collateral, including vault tokens. ## How is unrealized PnL treated? Unrealized PnL contributes 100% to available margin. # Leverage ## Is leverage the same as available margin? Often in crypto, "leverage" is used in the context of a single perp position. World is different in that it looks at portfolio-level, instead of position-level risk. While [Available Margin & Collateral](/essentials/available-margin-and-collateral) is not exactly the same as "leverage", these concepts are related in that they are different ways to measure and manage risk. When you choose the size of your position, you are using your whole portfolio as collateral. Your leverage is not configured as a setting in the order panel. Instead, it is implied by the size of your positions. Your max leverage available in any single position is also determined by your whole portfolio. ## Portfolio Leverage Leverage can be calculated as the total size of your positions divided by your total balance (the sum of the USDT value of your spot assets). On World, users can safely take higher amounts of leverage for hedged portfolios, enabled by [ATLAS - World's Risk Engine](/tl-dr-unique-features/atlas). This metric is a helpful heuristic to some traders; it is not used in any calculations and does not trigger liquidation. # Why Borrow? A common question is, "If I can already get leverage through perps, why would I need to borrow?" Here are the answers. 1. Buy yield bearing spot with leverage. 2. Use crypto (e.g. BTC, ETH, etc.) as collateral to trade perps. This usually requires borrowing USDM to settle the unrealized PnL of the perps. 3. In many jurisdictions, selling your crypto is a taxable event. Using your crypto as collateral to borrow USD, and trading with the USD may not be a taxable event. Not financial advice, look it up. 4. Lending rates for an asset are often more favorable than perps rates. For example, if you are leveraged long ETH on Hyperliquid, it usually costs 10.9%, whereas it may only cost 6% to borrow USD to buy ETH. 5. Historically, there has been a very large difference in the rates described above. That difference allows for arbitrage, such as [Trades](/tl-dr-unique-features/trades#the-bullish-leveraged-basis-trade). 6. Borrowing enables portfolio leverage for portfolios containing a mix of positions and assets. 7. Users get the option between paying a fixed rate for leverage and a variable rate for leverage. Read more about how to Borrowing in [Lending](/details/lending) # Points Program Points will be decided on a bi-weekly basis. Points are given discretionarily. Points program generally rewards: * Lending * Long biased perps trading * Referrals Leaderboards: * Escape artist * Knife catcher * Active liquidity * General * Godfather (loans) * The President (referrals) Let us know if you would like help working with your fund administrator on how to value World's points. # Accounts & Trade Only Access ## General Your wallet owns your account. By default, it has full administrative privileges for the account. You can view your balances, deposit, and withdraw from the Account page.
## Trade Only Access, i.e. Owner/Trader Separation An owner may designate one or more addresses as traders on their account. A transaction signed by a trader account may perform all trading actions on the given account, but may not deposit or withdraw funds from the account. This provides several advantages: * The owner keys may be kept offline because they are not needed often. * In scenarios where the funds don’t belong to a trader, for example, because the trader is employed\ at a firm that owns the capital, this arrangement is a natural fit. * Trading is a time sensitive activity, and trading keys must typically be kept online. If the key is\ compromised, funds cannot be withdrawn. * In case of a trading key compromise, trading rights may be revoked by the owner without having\ to move their funds. * Having multiple trading keys for a single owner account can dramatically simplify nonce manage-\ ment.
Assign trade-only access to an account by selecting *Trade Only Access* from the *More* tab in the navigation bar. Click *Add New Trader* and paste in the *public address* of the trade-only wallet. Never give us or anyone your private key, unconditionally. We will never ask for it in any form. You can also use this feature to easily create managed accounts (SMAs) on WCM. ## 1-Click Trading After depositing, you can turn on 1-click trading in the account drop down or in the account page.
When you turn it on, it will ask you for a password. Your password is used to create a dedicated wallet which can hold gas money and sign for you without requiring additional clicks or confirmations. This new 1-click wallet is stored in your browser. If you clear your cache, the wallet will disappear from your browser, and when you type in your 1-click password, it will re-activate your wallet. **If you forget your 1-click password, it is not recoverable - you will lose the money in that 1-click wallet, which will only be the gas money you deposited. Losing your 1-click wallet has impact on the assets in your account - if you only lose your 1-click password, your assets remain entirely safe and untouched. The assets in your account are entirely owned by the account's wallet with administrative privileges, they are not owned by the 1-click wallet, which has trade-only access.** If your 1-click trading wallet runs out of gas, you need to top it up. WCM will alert you with a banner notification if your gas balance gets low. If someone steals your 1-click password while it is enabled, they can trade in, but not withdraw from your account. When you disable your 1-click trading, it will revoke all rights from that key. When you turn off 1-click trading, the gas money is automatically withdrawn to your wallet. ### How does it work? You pick a password that is used locally in a key-derivation algorithm to arrive at a unique account. This account is then given some gas money from your main account and enabled as a "trader" on the exchange for your account. The account private key is only held in the browser memory. Closing or refreshing this tab removes the private key and you'll be asked to reenter your password. # Vaults ## Vault Features Vaults (coming soon) on World allow users passive exposure to a strategy. Vaults can be restricted to only allow for a specific trading activity, for example lending on specific assets. A user’s deposit is tokenized, which allows them to trade their interest in the vault, akin to staked tokens. Vault operators may set management and performance fees for their trading activities. Some vaults will have redemption windows. ## Vault Operators Anyone can create a vault. World will show a set of verified vaults, which will be highlighted in the UI. ## Institutional Liquidity If you are interested in being a liquidity partner, please see [Broken mention](broken://pages/x3EE0CpvOBSelwvreWl7). # Trading ## General All contracts are bilateral. You can find the counterparty to any given position in the trading table, under the Positions tab. You may also see your counterparty's positions. ## Perpetual Futures * Funding rates are settled at 8-hour intervals. We chose 8 hours instead of 1 hour to make it easier to arbitrage funding and lending rates. * Perps are always settled in [Denomination: USDM](/venue/denomination-usdm). * Perp funding must be paid in [Denomination: USDM](/venue/denomination-usdm). * If an account does not have [Denomination: USDM](/venue/denomination-usdm) to pay the funding rate, it receives a 24-hour, 0 interest loan. If the loan expires without payment, the liquidation engine will attempt borrow [Denomination: USDM](/venue/denomination-usdm) from the lending market and use the loan to settle your perp. If for some reason it is unable, it will liquidate your account. * Unrealized PnL counts towards margin, but cannot automatically be used to pay funding fees. You can use the "True Up" action on your Positions tab to easily realize unrealized PnL. * There are no ADLs on World. Unlike CEXs, this is not a risk. Read the full details for perpetual futures on World at [Perpetual Futures](/details/perpetual-futures). ## Loans * Loans are always 10-day durations. * The interest rate for the loan is fixed during the 10-day duration. * Borrowers must pay interest and return the loan principle within 10 days. Failure to do so will automatically borrow more capital (10d) to pay the interest on the old loan. This auto-borrow charges $1 as a fee. * By default, loans may be fully or partially extended in 10 day increments by the borrower (upon paying interest and partial principle due). * A lender may choose to mark a loan as non-extensible, in which case the borrower must pay the interest and loan by the due time. When the loan principle is paid back, if the loan is extensible, the loan is returned to the order book. * Minimum loan duration is 8 hours. * Interest payments are made in the underlying asset. An ETH loan pays and receives interest payments in ETH. * When you lend out capital, you may use your loan as margin. The loan's contribution to available margin is 98% of the notional value of the loan. * Interest on loans is accrued hourly. * You may swap your counterparty if you pay the difference in rates between your current borrowing counterparty and the new one. For example, let's say you borrow 100 ETH from the ETH loan market. Let's say the market rate to borrow ETH is 3%. All loans have 10 day durations, which means you will owe the lender 100 x 3% x (10/365) = 0.082 ETH in 10 days (equivalently, 3 ETH annualized). Importantly, when you Borrow, the Borrow position is a liability, not an asset. When you borrow, you will see both your spot balance increase for that asset (or appear new if you had none) and a new Borrow position appear. The increase in Spot is the asset, and the Borrow position is the liability. Borrowing, without selling, results in no change in net market exposure. For example, this Portfolio has no market exposure to ETH.
And this Portfolio is short 0.5 ETH.
Read the full details for loan contracts on World at [Lending](/details/lending). ## Spot * All spot listings are ERC-20s. * Some (not all) vault tokens are listed in the spot market. * Any asset listed in the spot market may be deposited, withdrawn, and used as collateral. # Orders Order types: * Limit Order * Market Order * There are currently no other order types. Order types such as Post-Only and ALO, especially those favored by makers, will be available in v2. Fill Conditions * Good till cancel: * Fill all or revert: * Fill partial kill rest: # Liquidation & No ADLs ## General The portfolio becomes eligible for liquidation when the **available margin in an account reaches 0.** After liquidation, the account is reset to hold only a **USDM balance** and **no open positions**. ## Liquidation Process * **Any participant** may act as a liquidator. * The liquidation function is **public**, but the process is **pre-determined by smart contracts**. * Liquidators cannot arbitrarily decide liquidation steps. * Orders are placed on the order book as market orders for the **full size of each position**, at prices required to fully execute given current depth. * In volatile markets, liquidations may result in **additional losses** for the account holder due to thin market depth. * **All liquidations are full liquidations. A full liquidation means that all positions are unwound and all balances are sold for USDM. All orders during liquidation are taker orders.** ## Liquidator Fees & Rewards * Liquidators receive a **reward of up to 1%** of the post-liquidation portfolio value. * Rewards are **held in escrow for 24 hours**. * The exchange administrator may **revert rewards to the original owner** if malfeasance (e.g., manipulation) is detected. * At launch, **World operates the liquidator**. After launch, the liquidation function will be publicized, enabling **anyone to liquidate**. ## Loans * A user who borrows, and does not pay their interest on time, will trigger an automatic borrow and interest payment forced by the liquidation engine. The other positions in the portfolio will not be unwound, unless the interest payment on the new loan brings the available margin to 0. #### How does World manage a lender getting liquidated? * Let's say an account has lent 100 ETH and this account gets liquidated (due to some other position). Under normal conditions, the liquidation engine will source another lender (or lenders) from the order book, matching the newly sourced lender with the original lender's borrowing counterparty. The original lender in liquidation pays the difference in interest rates. ## No ADLs: Bankruptcy Liquidations * World does not have ADLs. It is the organization's view that the exchange should never take over a user's position outside of liquidation. Allowing the venue to unwind your position outside of liquidation causes the venue to behave more like a casino and less like an exchange. We believe most CEXs operate internal trading desks which trade against their clients, and use ADLs to arbitrarily unwind your positions, at their profit and your loss. Importantly, ADLs are not a feature of any major exchange in any major asset class outside of crypto. * It is still possible on World that your counterparty loses money so fast they are unable to pay you during an extreme market move. This could happen if the variance in price and/or liquidity for the market(s) of your position(s) was not sufficiently captured by World's [risk parameters](/essentials/risk-parameters-and-stats),[ stored onchain](https://world.inc/#/exchange). * If this happens, a portfolio, i.e. your counterparty, may become **"bankrupt"**. * Bankruptcies, where one party is unable to pay their creditors in full, are always **bilateral**. Meaning, if User A is the only counterparty to User B, and User B goes bankrupt, User B will pay User A all of its assets in [Denomination: USDM](/venue/denomination-usdm) and User A will lose the remaining unrealized PnL. The loss is not socialized or extended beyond direct counterparties of User B. * Importantly, users of World have some discretion over who they chose as counterparties, as all contracts are bilateral. If you perceive World's [Risk Parameters & Stats](/essentials/risk-parameters-and-stats) to be too aggressive for an asset, you can avoid counterparties with exposure to that asset. * If you click "Details", you can see the counterparties of your Perp position.
It looks like this:
For Loans, go to the Positions tab:
* When processing a bankruptcy, at this stage: * No liquidator bounty is paid (funds go to counterparties). * The **exchange operator** executes a special liquidation with **bankruptcy commands**: * **Close loan with partial payment** * **Close perp position with partial payment** * Counterparties take a **loss**. * The operator charges **no fees** for this process. ℹ️ The operator is incentivized to set **risk parameters** such that bankruptcies are extremely rare. This is different from how CEXs work, which can unwind your positions at their discretion. On World: * You always know your counterparty risk, because the risk parameters and your counterparties positions are onchain. * If you don't like your counterparty risk, you can swap your counterparty. * Liquidation is triggered based on verifiable, onchain risk parameters. * The exchange never touches your positions except during liquidations. * Counterparty losses are bilateral, they are not socialized across unrelated users. ## Liquidation Safeguards To prevent abuse, liquidators face strict rules. These rules and specific values are subject to change. * ❌ **No limit orders** allowed * Only `fill or revert` and `fill partial, kill rest` order types are permitted * ❌ **No lending orders** during liquidation * ✅ May **borrow up to the amount lent** * ✅ Borrow interest rate capped at **50%** * **Designed to prevent lenders from losing more than 2% of their lent funds**, subject to other disclosed risks in Counterparty Risk section * ✅ Order prices restricted to **±4 × riskSlippage** from the mark price * ✅ Spot buys limited to **borrowed amount + 4%** (to cover fees/interest) * ✅ Spot sells allowed **only after all borrows are repaid** * ✅ Perp trades may **only reduce existing positions** # Market Structure ## All CLOBs - No Pools, No AMMs All markets on WCM are order books (CLOBs), including the lending market. There are no pools of any kind. This distinction is important because cross-asset lending pools are subject to adverse selection and subsequently death spirals. George Akerlof won the 2001 Nobel prize for his demonstration of this effect and we don't intend to contradict the man! Akerlof, G. A. (1970). *The Market for "Lemons": Quality Uncertainty and the Market Mechanism*. **Quarterly Journal of Economics, 84**(3), 488–500. . An even more practically relevant paper: **Rothschild, M., & Stiglitz, J. E. (1976).** *Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information*. **Quarterly Journal of Economics, 90**(4), 629–649. [https://doi.org/10.2307/1885326](https://www.uh.edu/~bsorense/Rothschild\&Stiglitz.pdf) Segregating risk to bilateral contracts protects all users and enables safe portfolio margin. ## Looping Looping is common in DeFi. It happens due to TVL limits on over-collateralized lending venues. Users loop to increase exposure, i.e. increase leverage, to an asset. WCM is under-collateralized, which means there is no need to loop - you can achieve the same result with 1 click and lower liquidation risk. ## Fixed term, fixed rate lending A common problem with pool-based Morpho and Aave-style markets is that the borrowing rate is both overly sensitive and easy to manipulate. All loans on WCM are 10-day terms with a fixed rate over that duration. If as a borrower, you match with a lender at a 6% rate, then you are guaranteed that rate over the 10-day duration of the loan. If your lender is liquidated, the liquidation engine will source another lender from the order book as part of the liquidation process, and the liquidated lender will pay the difference in rates. A borrower can only borrow if they can afford the full 10-day interest payment on loan, which is taken out of their available margin. # Circuit Breakers World can pause markets during periods of extreme, unexplained volatility to allow traders time to manage collateral and avoid unnecessary liquidations. World has **not** yet implemented a robust framework for which a circuit breaker could be triggered, so at the moment, they cannot be trigger. This is WIP - coming soon. # Risk Parameters & Stats ## Stats Page The Stats page, found under More in the top navigation bar, details every piece of information relevant to the transparent operation of WCM, including risk parameters and statistics about the exchange.
## Risk Parameters The two most important risk parameters are Risk Price and Risk Slippage. You can see these in a table towards the bottom of the page. Risk Price is an asset volatility factor. Risk Slippage is an asset local liquidity factor.
These two values are summed (Risk Price + Risk Slippage) to get the "Asset Risk" value on Margin Calculation tab, which then enters into the Available Margin calculation.
The risk parameters are reviewed quarterly and set to be conservative, slow moving parameters. The intention is that these parameters should be set to manage market conditions far outside of what has been observed historically. The exact calculation for determining these parameters will be published. ## Exchange Stats Some things include: * Fees, including max fees. * Minimum order quantities. Order sizes are rounded to the minimum quantity. * The bid/ask spread and number of orders for all markets. * Risk parameters for each token. * Addresses and other token specific details. The page looks like this.
## Uptime You can see the uptime and network connectivity on the UI, in the lower left hand corner, when you hover your cursor over "Blockchain Operational."
You can find MegaETH's uptime page [here](https://uptime.megaeth.com/).
# Fees Unlike other exchanges, fees on World are capped up to a certain dollar value. **They do not scale with the size of your order after reaching a threshold. As of Feb 13, 2026, the max fee on all trades is $10.** You can find the max fee [here, on the stats page](https://world.inc/#/exchange).
Currently, there are no volume based fee tiers, this may be added later. To find the fees, visit the [stats page](https://world.inc/#/exchange). Here is the Stats page as of February 12, 2026.
In the above screenshot: * There are no fees for borrowing or lending * Maker fees are 5bps for all order books * Taker fees are 10bps for all order books * There is a maximum fee cap of $10 on all perps and spot order books # Bundle Mode ### What is it? Bundle Mode allows users to: * Bundle multiple trades, to be simultaneously placed as orders. This is especially useful for hedged trades, like the basis trade. * Test margin requirements of different portfolios before executing. ### How does Bundle Mode work? You add orders to a bundle. These orders are all placed (but not necessarily filled) simultaneously. You can set fill conditions on a per order basis in the bundle. It is especially powerful programmatically, because you can add other operations outside World in the atomic bundle. # BTC.b ## General BTC.b is wrapped EVM Bitcoin, supported by [Lombard](https://www.lombard.finance/). Find the definitive guide for BTC.b [here](https://docs.lombard.finance/use/use-btc.b). Available for: Spot, Perps, Loans. ## How to get BTC.b with BTC? You can [wrap your BTC here](https://www.lombard.finance/app/deposit). See these [instructions](https://docs.lombard.finance/learn/products-overview/assets#btc.b-bitcoin-bridged), pasted below.
If you have trouble with Lombard's UI, you can also use [MegaETH's UI for BTC bridging](https://rabbithole.megaeth.com/bridge-btc) (via Lombard) until World builds dedicated UI support. ## Bridging BTC.b In addition to wrapping native BTC as described above, users can bridge BTC.b with Lombard from Ethereum Mainnet to MegaETH. ## Security & Monitoring BTC.b is secured with Lombard's [security model, described here](https://docs.lombard.finance/learn/lombard-security-model). The broader [security architecture can be found here](https://docs.lombard.finance/learn/protocol-architecture). You can monitor the reserves backing BTC.b [here on Dune](https://dune.com/lombard_protocol/reserves). ## BTC Perps BTC perps on World use an oracle price for BTC itself; the oracle price does not include the BTC.b wrapper. # ETH ## General World accepts WETH deposits. If you have ETH, the UI will allow you to first wrap it to WETH and then deposit WETH. Available for: Spot, Perps, Loans ## Bridging At the moment, the best option is MegaETH's [Rabbithole](https://rabbithole.megaeth.com/bridge), although this is not good for size. # MEGA It's MEGA bro. On the chain bro. Perps and Spot. Coming soon.
{% embed url="" %} # SOL Currently, SOL is only available for perps trading and not spot. If you would like to trade SOL spot, please reach out and let us know. # HYPE Currently, HYPE is only available for perps trading and not spot. If you would like to trade HYPE spot, please reach out and let us know. # wiTRY wiTRY is a tokenized yield bearing Turkish money market fund issued by [Brix](https://brix.money/).
Read more about wiTRY in their [documentation](https://docs.brix.money/). wiTRY is available only for Spot trading, and not Perps. Note, wiTRY supply is limited during initial rollout and the secondary market price may deviate from the fair value. We do not recommend increasing the default slippage parameter in the order panel. For a reference price from Brix check [here](https://brix.money/witry-calculator). # Technical Overview ## General World Markets is fully on-chain. It is deployed on MegaETH, an Ethereum Layer 2. It is entirely a set of smart contracts hyper-optimized to reduce gas costs. It has no backend. The UI talks directly to the blockchain, it can be downloaded and run locally on any computer. Anyone can build an alternative UI to trade on World. The smart contract source code will be published after World has achieved sufficient liquidity. Our goal is to offer users the functionality of a CEX, combined with the transparency and permissionless access of Uniswap. World uses RedStone as its primary oracle on MegaETH. It will likely use Chainlink as its secondary oracle within a month after launch. The oracle is used to settle perps and trigger liquidations. ## Smart Contracts The exchange is implemented as a single interface at a single address. The single interface fronts multiple deployed contracts on the blockchain. The exchange itself is broken up into three contracts (due to size limitations) and each order book is also its own contract. Each book can handle more than a billion live orders on each side. Insertion is O(1). ## Oracles All tokens in World must have a price source. The exchange is configured to read from [Redstone](https://www.redstone.finance/). [ChainLink](https://chain.link/) will likely be added in the future. World transactions do not attempt to update these oracles. Oracle updates are either run externally by the exchange operator or sponsored. The core financial innovation in World, risk based portfolio valuation, depends critically on good prices. Oracles set the mark price for the perps market. World additionally uses the oracle prices as inputs to trigger liquidation; it does not use the asset prices from its local order books to trigger liquidation. Funding rates are calculated based on trading activity as described in [Perpetual Futures](/details/perpetual-futures), they are not an input from an oracle. World performs due diligence on all oracle providers it uses and only works with those which pass internal checks. That said, it is possible for oracles to be manipulated or experience technical failures. This is one of the largest sources of risk for world. ## Security See [Counterparty Risk](/venue/counterparty-risk#smart-contracts). ## SDKs See [Typescript SDK](/developers/typescript-sdk) for Typescript and [Rust SDK](/developers/rust-sdk) for Rust. We will have a Python SDK in the future. # Gas Costs This is a [spot maker transaction](https://megaeth.blockscout.com/tx/0x4c40710784e08a8f5bbceff9543f423c0b2a05a486ac41d15d9e92bbcd88a1a5?tab=index) with 50 cancel-rebook orders. The *amortized* gas per action gas usages is 5,863,647 / 100 = 58636 gas or 0.00000586865323032 ETH / 100 = 5.86865 e-8 ETH. This is a [spot taker transaction](https://megaeth.blockscout.com/tx/0xfefc4ee020d10a612cdec037ea3de8c8b9a5859bae874c14fc1b73f6b05aa902?tab=index) with 5 matches (across 5 books): The *amortized* gas per match is: 954,578 / 5 = 190915.6 gas or 0.000000955244913913 ETH / 5 = 0.000000191 ETH. # Counterparty Risk ## Universal Margin Every financial contract on World has a counterparty. Every account uses universal margining. If the per-asset risk consumption is improperly set on World, or assets are listed which are liable to go to 0, the risk of not getting paid increases for all users. Importantly, all users are able to view the portfolios of their counterparties and take personalized views on this counterparty risk. World does **not** have ADLs. You are in control, read [Liquidation & No ADLs](/essentials/liquidation-and-no-adls). ### Paying Creditors in Case of Default For example, if WCM listed Terra Luna on the exchange, portfolios holding large quantities of UST could lose value so quickly, the liquidation process may be unable to reclaim sufficient USDT to pay the creditors of this portfolio. A user who had lent money to this portfolio may not be paid. In this scenario, the portfolio in question is considered "bankrupt" and a special process kicks in. This defaulted account is processed in the following way: 1. Outstanding contracts are converted into borrowed USDT loans with counterparties to the portfolio. 2. The credits and debts are summed and the loss measured as a percentage of the whole portfolio. 3. Loans are repaid up to the loss ratio. In effect, the loss is amortized across all creditors. To prevent abuse of this function, WCM has 24 hours to block payment to the liquidator and return the assets to the liquidated account. Under normal operation, the liquidator would be paid. The assets would only ever be returned in the case of abuse. WCM is only able to block payment to the liquidator, it is unable to control assets in any other way. ## Security See [Security](/venue/security). ## Venue Operation WCM is fully onchain. It is not controlled or operated by the WCM team. The WCM team is able to adjust per-asset risk consumption, listings, and fees. ## MegaETH Risk MegaETH is an Ethereum L2 blockchain. It has been audited. # Security ## World Smart Contracts & Audits 1. Sherlock. Complete. 2. Creed (fmr. ConsenSys Diligence team). Complete. 3. Sherlock #2. WIP. We will continue posting audits as we work through them. For security purposes, some of the code and names of the individual auditors has been temporarily redacted. Sherlock Audit 1: {% file src="/files/M9GSJU0szaLr6G7WVceg" %} ## MegaETH Smart Contracts & Audits Mega audits coming soon. Read more about Mega's broader technical work here: . # Sub-accounts Sub-accounts are often used by institutions and available to everyone. Sub-accounts are often used to isolate positions from universal margin. Sub-accounts will be shipped in a future release. In the meantime, segregate by wallet. # Exchange Governance WCM is managed through an **administrator role** with specific, clearly defined responsibilities. *** ### Administrator Responsibilities The administrator may: * ✅ **List tokens** on the exchange for trading * ✅ **Create and configure orderbooks** * Most tokens will support all three markets (spot, lending, perpetuals) * Some tokens may only have a **spot** orderbook * ✅ **Set exchange risk parameters** for each token * ✅ **Halt trading** on a particular book (note: existing orders may still be canceled) * ✅ **Set fee rates** * ✅ **Designate the mark price source** * ✅ **Return liquidation fees** to the original owner if a liquidation was found to be **illegitimate** (e.g., caused by price manipulation) *** ### Administrator Limitations The administrator **cannot**: * ❌ Move funds arbitrarily between accounts * ❌ Override the ledger * The ledger only responds to **owner requests** and **trading activity** **The administrator can upgrade the smart contracts ONLY during the Beta release of WCM, primarily for security reasons.** # Denomination: USDM World Markets on MegaETH is denominated in USDM, the MegaETH native stablecoin. Users can hold any spot-listed asset as collateral. Perps are settled in USDM and liquidation unwinds positions for USDM. USDM is a very low liquidity stablecoin. Burning and minting USDM is only available to KYBed institutions, therefore, there is friction in supply adapting to market demand. It may be subject to market manipulation from bad actors, and/or natural spikes due to the thin liquidity. World does not have any influence over the issuance or price of USDM. USDM is owned entirely and independently by the MegaETH team in partnership with Ethena. More info: 1. 2. # Privacy WCM is a fully lit order book, which means all orders are visible by defualt. Traders also have full visibility into the portfolios of their counterparties at all times. On-chain privacy solutions have evolved over nearly a decade and will continue to improve as zero-knowledge research becomes increasingly advanced. WCM does not provide any built-in privacy solution as we believe it is outside the scope of the the core smart contracts. However, WCM is fully on-chain, which means every provider the industry with privacy services for EVM networks can integrate with WCM as easily as Uniswap or Curve. If you have a preferred provider, or would like a recommendation, please reach out to us. # Known Problems Find the full list here: World Markets is a brand new protocol, built entirely from scratch. It is launching in Beta given the inherent risks of this endeavor. Here are some known problems which are are improving in the immediate future: 1. The front end may be buggy for some users. We recommend using it with Chrome and Brave. 2. Historical data, such as trade and order history may not show up on the UI. The chart can sometimes be inaccurate. The reason is because the protocol operates fully onchain, historical data is hard to access. Solving this is a priority. 3. It's hard to use with Python. We are working on a docker container which can be run locally and expose Binance-like APIs making it easy to use World Markets with any language. This is a priority. 4. Portfolio and Points program pages, including historical PnL for the account. Coming soon. 5. My ETH bags keep going to 0. This has nothing to do with World Markets, it appears to be a universal phenomenon across all ETH holders. # ATLAS Math: Risk Based Valuation ## General The **risk based portfolio valuation** provides a conservative estimate of portfolio value under adverse conditions. * Market participants must maintain a **positive risk based valuation** at all times. * If the valuation becomes negative, the account is subject to **liquidation**. * The exchange operator defines two risk parameters per token: * **Risk Price** * **Risk Slippage** ## Adjusted Token Balance For each token, define the **adjusted balance**: $$ \text{Adjusted Balance(token)} = \text{Token Balance} - \text{Borrowed Quantity with Interest} + \text{Lent Quantity with Haircut} $$ where: $$ \text{Lent Quantity with Haircut} = \text{Lend Quantity} \times 0.98 $$ * `tokenBalance` = user’s holdings of the token * `borrowedQuantityWithInterest` = borrowed amount **plus 10 days of interest** * `lendQuantity` = total amount lent to others 📌 For efficiency, lending values are aggregated as the **sum of all borrowed positions with the maximum 10-day interest rate**. ## Margin & Portfolio Valuation The **risk-based valuation** of the portfolio is: $$ \text{Risk Based Valuation} = \text{Adjusted Bal(BaseToken)} + \sum\_{\text{Non-base tokens}} \text{Token Value} $$ ### Token Value For each non-base token: $$ \text{tokenValue} = \min(\text{tokenValue}*{high}, \text{tokenValue}*{low}) $$ where: $$ \text{tokenValue}*{high} = \text{adjustedBal(token)} \times \text{adjustedTokenPrice}*{high} + \text{aggregatePerpValue}\_{high} $$ $$ \text{tokenValue}*{low} = \text{adjustedBal(token)} \times \text{adjustedTokenPrice}*{low} + \text{aggregatePerpValue}\_{low} $$ ### Adjusted Token Prices The adjusted token prices are computed as: $$ \text{adjustedTokenPrice}*{high} = \text{price}*{mark} \times \Big(1 + \text{riskPrice} - \text{riskSlippage} \times \text{sign}(\text{adjustedBal(token)})\Big) $$ $$ \text{adjustedTokenPrice}*{low} = \text{price}*{mark} \times \Big(1 - \text{riskPrice} - \text{riskSlippage} \times \text{sign}(\text{adjustedBal(token)})\Big) $$ ### Adjusted Perp Values For perpetual positions, we compute high and low valuations: $$ \text{aggregatePerpValue}*{high} = \sum*{\text{perp positions}} \text{perpValue}(\text{markPrice} \times (1 + \text{riskPrice})) $$ $$ \text{aggregatePerpValue}*{low} = \sum*{\text{perp positions}} \text{perpValue}(\text{markPrice} \times (1 - \text{riskPrice})) $$ ### Perpetual Position Valuation The **perp value** at a given price is: $$ \text{Perp Value(price)} = \text{PNL from price movement + Funding Fees at that price} $$ ## SDKs & Optimization [#sdks](#sdks "mention") have the above formulas built in, so you can test and simulate margin requirements for different position sets. # Perpetual Futures ## Overview World's Perpetuals Market uses a **direct counterparty system** (no pools). * A trader may be **long or short** on a pair, but not both. * Opposite-direction trades reduce the existing position (partial or full), requiring settlement and adjustment, called a **True Up**. * The market computes a **funding rate** every 8 hours. * All orders must be an **integer multiple of the order size unit** (to avoid dust positions). ## Funding Rate * The **funding rate** is exchanged every **8 hours** (00:00, 08:00, 16:00 UTC). * Only positions still open at these times are charged/credited. * The funding fee is: $$ \text{Funding Fee} = \text{Notional Value} \times \text{Funding Rate} $$ where: $$ \text{Notional Value} = \text{Mark Price} \times \text{Position Size} $$ * Positive rate → **longs pay shorts** * Negative rate → **shorts pay longs** * The exchange **does not charge additional fees** on funding transfers. #### Formula & Rationale Funding rates align perp prices with expected future prices. * Predicted future price in 8 hours: $$ \text{Predicted Future Price} = \text{Order Book Mid-Price} \times (1 + \text{Current Funding Rate}) $$ * Alternatively, a trader may pick a funding rate and compute: $$ \text{Computed Mid-Price} = \text{Mark Price} + \text{Mark Price} \times (\text{Trade F. Rate} - \text{Current F. Rate}) $$ #### Funding Rate Calculation (World) * Calculated from executed trades during an **8-hour window**, offset by 30 minutes: * **00:00 UTC** → trades from 15:30 – 23:30 UTC * **08:00 UTC** → trades from 23:30 – 07:30 UTC * **16:00 UTC** → trades from 07:30 – 15:30 UTC * During the window, compute: $$ \text{Total Adjusted Notional} = \sum \frac{\text{Trade Quantity} \times \text{Order Book Mid-Price}}{2 \times \text{Mark Price}} $$ $$ \text{Total Quantity} = \sum \text{Trade Quantity} $$ * New rate: $$ \text{New Funding Rate} = \text{Current Funding Rate} + \Bigg(\frac{\text{Total Adjusted Notional}}{\text{Total Quantity}} - 0.5\Bigg) $$ * **Clamp**: Change per period is limited to ±0.005%. ### True Up A **True Up** adjusts positions in a financially neutral way for easier accounting. 1. You can see this button in the Actions menu in the Positions tab. 2. Reset position start time to **now**. 3. Adjust trade price to the **new trade price** (for fills) or **mark price** (for manual true up). 4. Immediately settle any financial difference. * If the owing side lacks base currency, a **24h interest-free loan** is created. * Unpaid loans after 24h → account becomes **liquidation-eligible**. * Either counterparty may trigger a true up anytime. **Example** * Position: long 2 ETH at $3000 vs short at 07:45. * At 10:00, mark price = $3010, funding rate = 0.01%. * Settlements: Price move: $$ 2 \times (3010 - 3000) = 20 $$ Funding: $$ 2 \times 0.0001 \times 3010 = 0.602 $$ Net: $$ 20 - 0.602 = 19.398 $$ So the short pays the long **$19.398**. ## Contract Settlement Settlement occurs when a trader trades **opposite their current position**. * WCM uses **LIFO (Last In, First Out)** settlement rules. * Positions touched in settlement are first **Trued-Up**, then adjusted. * Positions with same **start time and price** can be summed. **Example 1** Initial: | Long | Short | Qty | | ---- | ----- | --- | | Fred | Wilma | 2 | Fred shorts 7 ETH vs Barney. Result: | Long | Short | Qty | | ------ | ----- | --- | | Barney | Wilma | 2 | | Barney | Fred | 5 | **Example 2** Initial: | Long | Short | Qty | | ------ | ----- | --- | | Fred | Wilma | 11 | | Barney | Wilma | 3 | Barney goes long 7.5 ETH → matched: 5 vs Fred, 2.5 vs Wilma. Result: | Long | Short | Qty | | ------ | ----- | ---- | | Fred | Wilma | 6 | | Barney | Wilma | 10.5 | *** ### Fees * **Charged on notional value** at trade execution. * **In base currency** (not quote). * Applied pro rata at trade price. * Fees are **lower than spot markets** (because perps are leveraged). **Example** * ETH/USD perps fee schedule: * Maker: 0.005% * Taker: 0.01% * Fee cap: $2 Trade: 10 ETH @ $3000 (notional = $30,000). * Buyer fee = $$ \min(2, 30000 \times 0.00005) = 1.5 $$ * Seller fee = $$ \min(2, 30000 \times 0.0001) = 2 $$ ## Capital Requirements ### Takers * Must cover **fees immediately**. * Portfolio must remain **positive in risk-based valuation**. * Example: If token risk parameter = 10%: $$ \text{Required Collateral} = \text{Quantity} \times \text{Price} \times 0.1 $$ * Collateral can be cross-asset, but **base currency is recommended** to handle True Ups. ### Makers * Must have: * **Fees in base currency**. * Extra collateral if trade price < mark price: $$ \text{Required Collateral} = \text{Quantity} \times (\text{Mark Price} - \text{Trade Price}) $$ * If unavailable, order is canceled at match attempt. ### Maintenance & Requirements * After a position is established, the trader must maintain **positive portfolio valuation**. * Simplified rule of thumb: $$ \text{Required Collateral} \approx \text{Risk Parameter} \times \text{Quantity} \times \text{Price} $$ * For 10% risk parameter → keep \~10% of notional on hand. * P\&L accrues with price movement and must be factored in. *** # Lending ## Overview The WCM Lending Market uses a **direct counterparty system**—there are no liquidity pools. You can read more about why we do not use pools in [Market Structure](/essentials/market-structure). Instead, lenders and borrowers are matched through an **order book**, with the **interest rate as the price**. * **Interest rate**: annualized, quoted in terms of the underlying asset. Interest is paid in the underlying asset of the loan. * **Minimum order size**: enforced to prevent spam and errors. Available on the Stats page. * **Valid rate range**: greater than 0% and less than 100%. ## Borrowing Importantly, when you Borrow, the Borrow position is a liability, not an asset. When you borrow, you will see both your spot balance increase for that asset (or appear new if you had none) and a new Borrow position appear. The increase in Spot is the asset, and the Borrow position is the liability. Borrowing, without selling, results in no change in net market exposure. For example, this Portfolio has no market exposure to ETH.
And this Portfolio is short 0.5 ETH.
## Loan Lifecycle ### Loan Origination * When two orders match, a loan position is established directly between the lender and borrower. * The lender’s funds are transferred to the borrower. * **Default loan term**: 10 days (240 hours, calculated to the minute). ### Repayment * Borrowers may repay early, in part or in full. * **Interest** is: * Accrued by the hour (rounded up). * Subject to a **minimum of 8 hours**, even if repaid immediately. ### Term Extension * Borrowers can extend loans up to **10 additional days from the current time**. * Example: If 7 days have passed since origination, the borrower may extend another 10 days (total 17). ### Return to the Order Book * By default, repaid funds are automatically placed back into the order book. * Lenders can opt out (“do not return”), which also **prevents extensions** by the borrower. ## Counterparty Swap A unique feature of WCM is that users have full visibility into the portfolio of their counterparty, across all contracts. If a lender does not want to wait for repayment, they can swap their position, in effect swaping their counterparty: 1. Borrow the same amount they lent. 2. Swap their lending position with the new borrowing position, transferring the obligation to a new lender. **Rate adjustments:** * If the new rate is **lower**, the borrower benefits from the reduced rate. * If the new rate is **higher**, the borrower keeps the original rate, and the original lender pays the difference to the new lender. ## Fees * **No fees at trade execution**. * Fees apply only when interest is paid. * Fees are: * Calculated on interest, not principal. * Paid entirely by the borrower. * Adjustable by the exchange operator per participant. ## Capital Requirements #### For Borrowers (Takers) * Must hold enough collateral to cover **full 10-day interest + fees** upfront. * Example: At 5% annual interest, 10-day interest on 1000 ETH is **1.4 ETH (0.14%)**. ⚠️ Important: * This is **not equivalent to 700x leverage**. * Using borrowed ETH (e.g., selling on spot) without hedging will trigger **immediate liquidation**. * With proper hedging (e.g., long ETH perpetuals), high leverage (up to **\~50x**) may be achievable. #### For Lenders (Makers) * Requirements are the same as the spot market. * Capital can be **shared** between spot and lending orders, as per spot capital rules. # Matching Algorithm The order book uses a ladder matching algorithm that ensures the taker receives the best execution.\ This is different from single-price-per-trade matching algorithms that are employed elsewhere. Order\ matching is atomic (in the same blockchain transaction as the incoming taker order): the orderbook will\ never have overlapping orders from two sides. Orders in the book at the same price are sorted by time\ priority, the earliest orders at the same price are matched first. For example: The book contains two buy orders, one at $100, quantity 2, another at $101, quantity 3. A sell order comes in that’s priced at $99, quantity 4. Two trades are created: one trade at $101, quantity 3, and another at $100, quantity 1. If the exchange did not implement this algorithm, a secondary smart contract could break incoming orders atomically and automatically, as the order book is fully lit. To prevent flow re-routing and provide the same outcome for all users, the exchange must therefore implement this algorithm. # Unified Margin Risk Question ## The Unified Margin Risk Question "If I can use all my positions as collateral for other positions, does this not increase the risk that one highly leveraged user causes many other users to get liquidated, or that there are now many dependencies making World Markets more fragile? This sounds too good to be true." This is a common question, which we have noticed comes with a lot of misconceptions. Here is how to think about it. ### The Question The question to ask is, "Are there scenarios in which the liquidation engine cannot recover enough USD to pay back all creditors, i.e. pay back all counterparties to the loans and perp positions in the portfolio?" It is specifically these scenarios which have risk. #### Other Exchanges Manage with ADLs Most perps exchanges "manage" this problem with ADLs. The exchange or associated operator takes over your positions, whether they are making or losing money, and closes them out. On centralized exchanges, this mechanism, typically called the "Insurance Fund" translates to a kind of internal trading desk which trades against you, and without any reporting or transparency, under the guise of "risk management." One would expect full transparency if these exchanges had nothing to hide, as it would benefit users, who would in turn trust the exchange more, benefiting the exchange. You can read more about World's liquidation process in [Liquidation & No ADLs](/essentials/liquidation-and-no-adls). #### World has No ADLs World has no ADLs. #### World Manages Risk with Onchain Parameters Instead, the problem is managed with fully onchain, verifiable, per-asset risk parameters. Because the future is not knowable, there is no *perfect* solution, anywhere, but we believe this is the *best* solution. In comparison to the incumbents, our onchain risk parameter approach with a public liquidation (to be made public in H2 2026) function is more similar Aave and Morpho than Hyperliquid and Binance. The scenario in which the liquidation engine cannot recover enough USD is specifically, the scenario in which the risk parameters do not capture the materialized volatility and local liquidity of an asset listed on World. These risk parameters are responsible for managing this risk on World. Aave has similar approach to risk and liquidations, i.e. it sets onchain parameters, which determine liquidation, and aims to ensure the user always has enough 'value' in their account to cover their risk. #### But Aave is over-collateralized We often hear the argument "but unlike Aave, World is under-collateralized." In reality, Aave allows users to leverage up in single positions with "looping" *and* Aave cross-margins collateral backing these leveraged positions in a "pool" - a risk World actually mitigates, see [Market Structure](/essentials/market-structure). Hence, World and Aave have structurally comparable risk protections mechanisms. It's all a function of liquidity during liquidations. #### But what about universal margin? Universal margin *already exists* in traditional markets, and on CEXs (as "Portfolio Margin"), and even on exchanges with only spot and perps, such as Hyperliquid, cross-margining unrealized pnl potentially links all users' portfolios as one saw on 10/10. The core differences are that World: 1) allows users to lever up on spot through borrowing, 2) understands net market exposures (common in traditional markets), and 3) enforces bilateral counterparty risk instead of user-vs-exchange counterparty risk. #### But what about 50x leverage on the basis trade? 50x leverage entering a ***market neutral portfolio*** is less leverage than Hyperliquid allows users to be **naked long or short**. To the extent users can leverage up more - the question, again, becomes whether the loan is recoverable in an liquidation. Read more about lending and leverage here: [Lending](/details/lending#capital-requirements). ### Risk Management World sets 2 risk parameters for every asset: 1. Risk Price, a volatility parameter, and 2. Risk Slippage, a local liquidity and spreads parameter. These parameters are then added together and entered into the margin calculation, as described in [ATLAS Math: Risk Based Valuation](/details/atlas-math-risk-based-valuation). If the sum of the above two risk parameters do not fully account for the materialized volatility and available local liquidity (available, over some duration) of an asset, for example, during a sharp market sell off where all the liquidity moves to the other side of the book, the liquidation engine will not be able to recover enough USD during the liquidation process. Consequently, the users holding this asset will be unable to fully pay their creditors, which will reduce the NAVs and subsequently the available margins of these creditors. If leveraged positions of this asset are widely held on World, it introduces risk beyond the holders of these positions. This is the real risk - specifically, the sum of the risk parameters should ensure there are no scenarios in which the liquidation engine cannot reclaim enough USD (or equivalent) to repay all creditors for positions of a given asset. A subtle, but powerful property of World is that all risk settings are fully onchain and transparent. One can find them in the Stats section of the application. The below screenshot is of the test application, the values are not real. **All users, at all times, can see the risk parameters and deterministically know all inputs and calculations with respect to possible leverage and possible risk taking on the exchange, for all users of the exchange.** There is perfect verifiable and unprecedented information symmetry between World and all of its users, uniquely solving the agency problem (i.e. conflict of interest with the exchange) described in [#actual-risk](#actual-risk "mention") above. Needless to say, these parameters are set with the research and intention of never approaching scenarios which could introduce risk.
We believe perfect information symmetry of the risk parameters of WCM will naturally evolve these parameters to an efficient market outcome, which maximally benefits its users. At the margin, one would expect to see additional capital arrive on WCM with incrementally better parameters, and conversely capital leave with incrementally worse parameters, iteratively working towards the settings which attract the most capital. Moreover, every user has perfect insight into the portfolios of their counterparties at all times. Traders are then able to navigate counterparty risk dynamically, eliminating the need for "ADLs" near ubiquitous in other perps markets. Read [Liquidation & No ADLs](/essentials/liquidation-and-no-adls) to learn more. Circuit breakers and multiple price sources protect traders from 10/10-like scenarios. ### Liquidations: Liquidity and Incentives It should be clear from the above descriptions that this risk is a function of market **liquidity** during liquidations. This introduces an attractive incentive for markets makers and liquidators. Traders, including the liquidators, are incentivized to monitor and maintain resting market orders a conservative distance from market price to "catch" large liquidations, and source liquidity from anywhere. These maker orders can be maintained in parallel to other strategies, while incurring a minimal increase in (opportunity) costs, which makes the risk/return of this strategy very attractive for this category of trader. ### Remaining Concerns We encourage risk and due diligence teams to come up with **specific scenarios** they are concerned with, which allows us to walk through and evaluate them. # Market Making Coming soon # Loan Vaults ## Lend Page
## What do the Lending Vaults do? You earn interest by depositing into the Lending Vault from your wallet, which gives you a token in your wallet. You can sell the token, leverage it on other protocols, use it as collateral on World, and/or use it to redeem your principal + interest later. It's up to you. Lending Vaults on World can only do 2 things: 1. Lend in the World lending market 2. Borrow in the World lending market There is only ever 1 asset per lending vault. ## How do I use it? 1. You request to deposit your asset into the associated lending vault from your wallet. 1. NOTE: If you have assets on the exchange you want to deposit, you first need to withdraw them to your wallet and deposit them into the vault from your wallet. The UX is not perfect, but it is designed to help you with this flow. 2. The request is processed by the vault operator, usually within 10 minutes. The processing queue is there to prevent manipulation while the product is in Beta. Eventually, this wait time will come down to seconds. 3. Once your request is processed, you will get vault tokens. The tickers for these vault tokens are wl\, for example wlUSDm and wlBTCb. 4. You can do whatever you want with your lending vault tokens, including selling them, levering them up on Aave and Morpho, and depositing them back into World to use as interest bearing collateral. 5. When you want to withdraw your asset from the vault, you give the vault your lending vault tokens, wait for the request to process, and it gives you back your assets + interest. ## Wait 10 days for full interest You can withdraw your assets any time after depositing into the lending vault, but depositors should wait 10 days or more before withdrawing to receive their full, expected interest payment. Similarly, don't withdraw your assets on day 19, wait until after day 20. As the market gets larger, this problem will go away. The reason is because borrowers may borrow for up to 10 days and, assuming the borrower does not close the loan early, the borrow pays the interest to the lender at the end of the 10 days. Because the borrowers are not yet diverse, there tends to be prolonged periods of no interest payments, and then all the interest paid on the same day - this period can be at most 10 days long. ## Where does the yield come from? The lending vault lends to borrowers and the borrowers pay interest. On World, users can safely borrow under-collateralized, so there is inherently more borrow demand than on lending protocols with only over-collateralized lending. Read [Why Borrow?](/essentials/why-borrow) to understand the motivations to borrow. The simplest source of borrow demand comes from the "Auto-borrow" button on the Trade page:
and on Desk:
## Levered Basis Trade The [#levered-basis-trade](#levered-basis-trade "mention") additionally generates strong borrow demand. LBT trades can be done at >50x leverage, which is all borrow demand; $1 in the Bullish LBT at $50x leverage borrows $50. ## What is the risk? Borrows can default if the market falls faster than the liquidators can act. This risk is similar to Aave, Morpho, and other DeFi lending protocols in that, when the value of the collateral drops, liquidators come in and sell the collateral asset. When they sell the collateral asset, the money goes to cover you as the lender. If the liquidators fail to liquidate for an unexpected reason, the lenders can lose money. That risk is the same here. World's equivalent of "LTV ratios" are [Risk Parameters & Stats](/essentials/risk-parameters-and-stats). It is also possible that the withdrawal request can take longer to process than expected. This is possible for 2 reasons: 1. If the lending vault manager suspects vault manipulation, it can slow the withdrawal queue processing. 2. If there is too much withdrawal pressure the vault can slow (but not stop) withdrawal processing. This is because all loans have 10 day terms. If the lending vault needs to process withdrawals before the loan durations are finished, it may chose to borrow assets to process withdrawals. To prevent manipulation, it does this more slowly and carefully. # World-Annamite Trading Vault Coming soon # Smart Contract Docs ABI: # Typescript SDK SDK: ABI: You can find the Exchange contract address by clicking the gearbox in the upper right.
For working end-to-end examples of trades, look at the tests. # Rust SDK Ask us for it. For testing on MegaETH Testnet, the Exchange Contract Address is: 0x337BBFfa37b61D4B32d293a3bAf989B0FdaF56dD # FAQ ## Forum Head to for more comprehensive FAQs. *** #### Q: How does liquidation work under extreme market moves? Any stress tests? What happens in a situation where the vault has to backstop an extremely large position, similar to what happened to HLP? A: The liquidation engine protects users. Read [ATLAS Math: Risk Based Valuation](/details/atlas-math-risk-based-valuation#portfolio-valuation) to understand the 'risk budget' users have available, and consequently when liquidation occurs. Read [Liquidation & No ADLs](/essentials/liquidation-and-no-adls#bankruptcy-liquidations) to understand the worst case scenario. See [Risk Parameters & Stats](/essentials/risk-parameters-and-stats#exchange-stats-webpage) to see the asset-specific risk metrics. It's worth understanding [Market Structure](/essentials/market-structure). #### Q: Are there sub-account features for isolating positions? A: Yes, [Sub-accounts](/venue/sub-accounts). #### Q: What audit coverage exists? [Counterparty Risk](/venue/counterparty-risk#smart-contracts) #### Q: What is the purpose of True Ups? True Ups just realize unrealized PnL. #### Q: What if the lending market becomes fully lent out, such that you cannot withdraw your USD/tokens? Loans expire after 10 days. If there is no ability to borrow at all, then a lender must wait until the loan expires, which is a maximum of 10 days. It is unlikely WCM would ever be in a prolonged scenario in which there is no liquidity to borrow, due to arbitrage. # Changelog New updates and improvements ## August 2025 {% columns %} {% column %}
{% endcolumn %} {% column %} #### Documentation * Documentation published! {% endcolumn %} {% endcolumns %}
Improved * Documentation published.
Fixed * If it ain't broken, don't fix it.
*** ## March 2025 {% columns %} {% column %}
{% endcolumn %} {% column %} #### Private Beta Released * Private Beta deployed on MegaETH testnet * Security audit completed by Zellic. {% endcolumn %} {% endcolumns %}
Improved * Beta Launch * Security audit finished
Fixed * Genearl debugging for front end and contract code.
***