Tokenik Leverage Trading is a decentralized, non-custodial, leverage trading protocol where users can gain leveraged exposure on assets.
Our synthetic leverage architecture makes Tokenik more capital efficient, allows for low trading fees, and a wide range of leverages and pairs (up to 100x leverage).
How does it work?
Trades are opened with DAI collateral, regardless of the trading pair. The leverage is synthetic and backed by the DAI vault. DAI is taken from the vault to pay the traders PNL (if positive) or receives DAI from trades whose PnL was negative.
Trading experience
Full custody of funds: no deposits or signup is required.
High liquidity and low price impact.
Median spot prices (powered by Chainlink)
High leverage available (up to 100x)
Competitive fees (0.1%)
Transparent and decentralized: 100% on blockchain execution.
Synthetic leverage: no borrow , rollover or time fees
Liquidity efficiency
Since all trades use the DAI trading vault, we have a big advantage of not having to build new liquidity every time we list a new pair.
By building a big DAI vault, every trading pair listed on our platform benefits from bigger position sizes. This means the platform only requires DAI liquidity for all the pairs that can be traded on the platform.
This is only possible because the leverage of trades is “virtual”. The PnL is calculated in our smart contracts and settled against the DAI vault.
Low trading fees
Our fees are applied on the collateral x leverage of your trade (= position size), just like on any leveraged trading platform.
We currently charge 0.1% of leveraged value on opening and closing, for all cryptocurrencies.
There is also the spread on the price of each pair when opening a trade, which is used to prevent high-frequency bots from exploiting very small price movements. The price impact depends on the position size of your trade, and on the liquidity of the pair on spot exchanges. It is used to prevent manipulating the spot price of assets listed on the platform in a profitable manner.
Unlike all the other leverage trading protocols, we do not charge any rollover, funding or time fees.
Current limitations
Maximum collateral per trade (10,000 DAI) – scales linear with the increase of the DAI vault
Minimum collateral per trade (100 DAI) – prevent small trades where liquidations would not be economical because of gas fees.
Maximum open interest – scales liner with the increase of the DAI vault
Winning percentage on each trade collateral capped at 500%
Liquidations at -90% PnL.
Minimum trade duration: 1 hour – risk management to prevent bots exploiting very small price movements.
Maximum trade duration : 7 days (168 hours) since no rollover fees are charged, positions cannot be kept open indefinitely.
*current limitations are subject to change
DAI Vault
The vault is the smart contract where the DAI from negative PnL trades goes to and where the DAI to pay out traders comes from.
Anybody can stake DAI in the vault and earn DAI rewards from fees based on the platform’s volume. Stakers in the vault are rewarded highly as they bear risk associated with platform function, that is they risk wearing the loss if the vault became under collateralized and did not return to sufficient collateralisation.
Tokenik trading limitations are designed to specifically ensure a low collateralisation risk for DAI stakers.
Vault Balance = Staked DAI Value + Platform PnL
Vault Collateralisation % = (Staked DAI Value + Platform PnL) / Staked DAI Value * 100
The staked DAI can only be withdrawn at a max rate of 20% of your maximum holdings (from the last time you staked) every 24h. This means if you have 1000 DAI in the vault, you can withdraw 200 DAI every 24 hours and will have withdrawn the entirety after 5 days.
Opening a trade
To open trades on Tokenik you will need:
A Web3 wallet e.g. Metamask which is connected to Tokenik.
ETH in that wallet to pay for transaction fees.
DAI in that wallet to use as collateral.
- Go to our platform.
- Click “Connect Wallet” in the top right. You might need to refresh the page for the website to detect your wallet, if it wasn’t unlocked yet.
- If this is your first trade, you will need to approve the contract to be able to use the DAI that you want it to. Click approve and submit the transaction.
- Select the Pair you want to open a trade for (ex: ETH/USD).
- Now, you can set your trade parameters:
Trade type: long (buy) or short (sell).
Collateral: maximum amount you are risking if you are liquidated.
Leverage: multiply the volatility of the price up and down, to increase exposure.
Max slippage: Used to cancel a market order automatically if the price moved too fast in the direction of the trade before it was opened. - You can then click on the order execution button, which displays the order type and direction you will be executing.
