Explore decentralized perpetual trading on Vela

Vela Exchange, formerly known as Dexpools, is a decentralized, entirely on-chain order book exchange launched on Arbitrum.

The Vela Exchange is a self-custody-driven, permissionless perpetual exchange that leverages blockchain technology to provide quick transactions, safe trading, and extension into other synthetic options and derivatives. The Vela Exchange rewards program is calibrated to control token and reward production while upholding high incentives for liquidity provisioning and trade.

While perpetual trading is Vela Exchange’s first product, the company’s long-term goal is to give traders a home base with everything they need to trade leveraged products and crypto assets. 

As a fully on-chain order book perpetual exchange, users can create wagers against the performance of synthetic assets with leverage up to 100x. 

The major actions that can be carried out on Vela exchange are:

• Supporting the perpetual vault and leveraged trading by issuing or redeeming VLP 
• Opening or terminating leveraged bets on supported synthetic assets;
• Managing pending or open positions using triggered orders; 
• Staking $VELA or VLP for several ecosystem incentives.

Trading Features 

Trading on Vela Exchange is made possible by a strong hybrid on-chain and off-chain technology that supports traders’ access to a sophisticated platform for leveraged trading. The team believes that by integrating the greatest aspects of blockchain technology and proven server-hosted features, consumers can enjoy the perks of self-custody without compromising on performance and dependability. Below are the in-app trading features

Leveraged Positions 

On certain assets with USD as the “quote currency”, traders can open long or short contracts with up to 100x leverage. Asset prices are synthetic and obtained from oracles and pricing information is obtained from several enterprise data sources via Vela’s unique vStream price feed.   

Positions can be opened or closed using spot orders or triggered orders, and they can be managed using several risk management methods within the application. These management methods include limit order, trailing order, profit taking (partial or full), stop loss option (partial or full). Adding and removing collateral  The connected orders that are associated with newly created positions can be of many types. These orders cover a range of previously taken or automatically triggered actions that the trader has specified.

Collateral Management 

When trading on Vela, users must deposit USDC into the platform because the Vela Exchange vault is fully backed by the USDC stablecoin. Upon deposit, users receive a USD credit on the exchange, which simply appears as dollars on their account. This approach enables flexible stable currency deposits as the trading platform grows and may eventually add stablecoins other than USDC.

Advanced position management

Traders can employ a wide range of effective trigger or immediate-execution-based methods.

Vela has simplified risk management by:

• Creating limit order, trailing order
• Creating the take-profit option (partial or full)
• Creating stop loss option (partial or full)
• Creating trailing stop
• Adding and removing collateral

Vela Stream price feeds 

With the use of custom price feeds, Vela can gather information from any authorized source, such as enterprise data providers, CEXs, and oracles like Chainlink. As the Vela Exchange platform develops, the Stream service will be used to continue onboarding new data providers to support price stability as well as the addition of fresh, popular trade assets.

API Endpoints 

Trading procedures can be automated by using the Vela Exchange API endpoints by Vela traders and partners.

Alerts and Notifications

A benefit for traders is being able to sign up for Vela Exchange-facilitated SMS or email notifications. Traders can stay up to date on price changes, liquidations, triggers, and other crucial information via the in-app notification. The secure servers of Vela Exchange manage all notifications, and users can enable or disable them whenever they choose.

Referral Management

Traders on the Vela Exchange have the option of sharing referral links to get rewards. At the moment, referrals from Vela Exchange will provide the referrer with a portion (up to 20%) of all produced fees.

Fiat on/off ramps 

For the management of their fiat on/off-ramp and cryptocurrency exchanges, traders can use the partners of Vela Exchange. The on/off ramps are fully managed by these partners for all KYC and AML standards.

Token Rewards

Platform Rewards

Stakers of VELA, eVELA, and VLP as well as liquidity providers will be rewarded up to $75,000 of the platform’s revenue through the minting of VLP. All prizes will be given out in eVELA and USDC.

eVELA rewards are generated utilizing a part of VELA buybacks rather than by creating new tokens.

The perpetual exchange generates the following amounts of money, which are divided.

Perpetual Fee split

50,000 to the VLP Vault and 20,000 in eVELA rewards, for staking VELA/eVELb, 10K, 10K for staking VLb, and 5K in USDC incentives for VELA/eVELb stakers, in addition to 5K to the Treasury. 

Vela

The native coin for the Vela Exchange ecosystem is called VELA. VELA can be acquired in several ways, acquiring and vesting eVELA, buying on supported exchanges, and receiving certain platform incentives. To take part in the platform reward share, VELA owners can also stake their shares.

eVela (escrowed Vela)

eVELA is a VELA vesting token that has two uses;

1. Stake and collect benefits using the same incentive structure as when staking VELA.
2. Stake into the vesting contract and claim the same amount of VELA that is continuously unlocked throughout a 1-year linear vesting time. No incentives are given to eVELA that is staked for vesting.

VLP

For traders to use as collateral for leveraged positions, stablecoins are deposited into the perpetual trading vault. The cumulative value of all newly issued VLP tokens that have not yet been redeemed serves as a proxy for the vault’s value. Users who possess VLP receive a piece of the USDC perpetual exchange’s total fees of 50%.

Staking Rewards 

Users can stake any of VELA, eVELA, or VLP to receive a portion of the fees as rewards.

There will be a 72-hour “cool down” period after users stake any quantity of VELA during which they won’t be able to unstake. They are free to unstake after the expiration of the 72 hours. For eVELA or VLP, there is no such cooldown period.

Users who have staked tokens are eligible for the following benefits:

• Get trading fees that are reduced following the fee discount table.

• Receive 20% of the total perpetual fees from each VELA buyback as eVELA.

• Receive 5% of all fees created by the everlasting exchange fees in USDC.
• Amass ecosystem benefits (depends on a chain and subject to change)

According to the rewards cycle chart, new awards are posted on the Vela dashboard every 14 days and are continually claimable. 

Vela buyback model

The distinctive VELA buyback strategy is another tool for stabilizing VELA supply.

Up to 20% of the perpetual fees earned (including fees for starting and closing positions, staking VLP, and net financing fees) will be applied to the open market purchase of VELA.

Buybacks will be performed systematically over intervals of two weeks.

For every $1 million in permanent produced fees, $200,000 will be allocated toward VELA buybacks as an illustration of predicted buyback prices.

Each time VELA is purchased back from the market, it is loaded into the staking contracts in equal amounts, and new VELA tokens are created. 

This indicates that no more VELA will need to be produced to retain the current rewards system.

Trading Fees

The fee for the perpetual exchange is a flat 0.08% for both opening and closing a position. 

Fee Discount 

Users can save money on fees by using their staked VELA + eVELA. The table below displays the quantity of staked tokens necessary at any given time to obtain the specified percentage reduction on perpetual platform fees.

Funding Rate

To help balance both sides of the Ol (open interest), a funding rate (updated hourly) has been created for both long and short positions It is paid out when one closes their position and is calculated using net Ol and a predetermined perceived risk for each asset. A funding fee is paid to the VLP vault when the funding rate is positive, but the vault is charged when the funding rate is negative.

Tokenomics 

As stated earlier, the exchange’s native token is Vela. In distribution and allocation, 25% is allocated to the growth fund, 35% to community incentives, 3% to advisors, 5% to investors, 5% to team growth, 7% to DXP allocation, 10% to the core team and the final 10% to marketing. The total number of tokens is yet to be revealed. 

Governance Model

As the platform develops, Vela Exchange hopes to transfer governance to the larger community as a decentralized protocol. However, the information in this section is intended as a guide only and is subject to change as the platform and community development.

Voting

According to the whitepaper, the functionality relating to voting will be re-examined in 2023. These are

• Voting procedures
• Quorum requirements

• Proposal evaluation procedures

Treasury Management

To manage its treasury funds, VELA Exchange will use a Gnosis Safe multi-sig wallet with signers from its trusted team, community, and ecosystem.

Road map

2023: 

• Integration of OTC platforms
• Interoperability Solutions
• Launch of the Spot Market
• Expansion of Asset Support;
• Improvements to Trading Management
• API Enhancements for Bot Integrators

2024

• Multi-chain Support
• Trading Analysis Toolkit
• Tax and Finance Dashboard.

Founding Team

Travis Skweres and Dan Peng founded Vela Exchange. Both founders met at BCG and have extensive backgrounds in the software and consulting fields. Skewres developed Portal Finance, which Coinbase later purchased, and has been active in the bitcoin industry since 2012. The remaining members of the team and the advisory board are drawn from groups like Balancer, Black Rock, BCG, and Polygon.

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