Protocol Rules

# Positions

Positions represent deposits or trades that interact with an S&F pool.

Trader positions can be created through OTC trades or through the secondary market. Liquidity provider positions deposit liquidity into a pool and define the funding rate at which that liquidity becomes active.

# Trader positions

In OTC mode, entering or exiting a trader position is a two-step process:

• the trader locks collateral or synthetic assets;
• the position settles at the next oracle round;
• the trader, an approved third party, or automation claims the settled asset.

If the trade is not claimed within the expected round, it can be canceled.

In Market mode, positions are created instantly through the secondary market and are priced by the DEX pool.

# Liquidity provider positions

Liquidity provider positions track deposited liquidity, APY, PnL, and accumulated fees.

The value of a deposit is auto-compounded. Funding rate, swap fees, and trader PnL are reflected in the position value rather than claimed separately.

The activation rate defines when the position is active. If the pool APY is below the activation rate, the position is inactive and does not earn funding rate or swap fees.