How It Works
Market Trading
Market trading is instant secondary-market execution.
It trades tokens that already exist. It does not mint or redeem directly through the S&F pool.
Flow
- enter a market
- trade instantly at market price
- ownership moves between users
- protocol supply does not change
Market trading changes ownership. OTC settlement changes supply.
Example
Alice minted S-BTC through OTC settlement.
Bob wants S-BTC immediately and does not want to wait for the next oracle round. Bob buys S-BTC from an AMM pool or another market.
The trade executes immediately at the market price. The S&F settlement layer does not need to settle a new issuance event.
Market price
Market trading uses the price available in the secondary market.
That price can differ from the oracle settlement price because it depends on available liquidity, demand, and slippage.
This is normal. Market price is the price of immediate execution. Oracle price is the price used for canonical issuance and redemption.
Market makers
Market makers can quote S&F position tokens like other transferable assets, while using OTC settlement as the issuance and redemption path.
When secondary demand is strong, a market maker can mint through OTC and sell into the market. When the token trades cheap relative to settlement value, the market maker can buy and redeem. If funding is attractive, the same participant can also provide liquidity directly to the protocol.
That means a market maker can operate across issuance, redemption, LP funding, and secondary execution without trusting a venue-specific margin database or liquidation engine.
Selling immediacy
Suppose S-BTC has an OTC settlement value of 1.00 ETC, but buyers in a secondary market are paying 1.03 ETC because they want exposure now.
A market maker can:
- mint S-BTC through OTC settlement;
- sell S-BTC into the secondary market at 1.03 ETC;
- earn the premium for turning slower settlement into immediate execution;
- manage the remaining inventory through OTC redemption, market buys, or LP deposits.
If S-BTC later trades at 0.98 ETC while OTC settlement value is still near 1.00 ETC, the market maker can buy S-BTC from the market and redeem through OTC.
This helps connect secondary prices to protocol settlement. Market makers earn spread and arbitrage opportunities. Traders get faster execution than OTC settlement alone can provide.
What moves
In Market mode, ownership of existing position tokens moves between users.
The protocol's accounting still determines what those tokens represent. The market only determines the price at which users exchange them.