This guide provides a technical overview for developers looking to Trade on Deri. We will focus on the Deri Protocol v3 architecture, which combines an off-chain matching engine with on-chain settlement for maximum efficiency.
Step 1: The Core Architecture
Deri Protocol is not a simple AMM. It uses a hybrid model:
Off-Chain Matching: Orders for both Deri Protocol Perpetuals and Deri Options Trading are sent to a high-speed off-chain matching service. This allows for a gas-free, CEX-like experience when placing or canceling orders.
On-Chain Settlement: The actual settlement of matched trades is executed on-chain. This maintains the self-custodial nature of the protocol.
Step 2: The Deri Smart Wallet
A key component for developers and traders is the Deri Smart Wallet. This is a contract wallet that acts as a user's margin account.
Functionality: All collateral is deposited into this wallet. It is used to manage margin for all positions across both options and perpetuals, enabling portfolio-margin capabilities.
Interaction: Your trading bot or DApp will interact with the smart wallet to manage collateral and check margin ratios.
Step 3: Liquidity Provision
The protocol's liquidity comes from Deri Liquidity Mining pools. LPs deposit assets and take on the other side of the PnL from traders. The system uses a sophisticated risk management framework to keep these pools balanced.
Step 4: Security and Fees
The question "Is Deri Protocol Safe?" is primarily answered by its on-chain settlement and non-custodial nature. The off-chain component never takes custody of funds. The Deri Protocol Fees are competitive and are used to reward DERI stakers and liquidity providers.
For a complete architectural breakdown and API specifications, refer to the Full Official Documentation.
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