YFX V3

YFX is a decentralized perpetual exchange with up to 100x leverage, high liquidity, low fees, and no slippage.

YFX adopts the PvPool (PvP) trading mechanism, allowing traders and liquidity pools to trade directly. Liquidity providers can add or remove liquidity for linear, inverse, and quanto contracts to or from single-asset pools with no impermanent loss. Liquidity providers can earn transaction fees and profit from selling LP tokens at a higher price.

The V1 version was developed in June 2020, and the V2 version was developed in January 2022.

YFX V3 is a new upgraded version of YFX V2. This upgrade mainly adds aggregated fund pools, ChainLink price feeds, a new Earn model, a new hedge position mode, funding fees, borrowing fees, liquidity provider tokens YLPs, a more incentivized referral program, and a new UI design that makes the protocol more decentralized and easier to use.

Aggregated fund pool YLP (YFX Liquidity Provider)

YFX V3 adopts the PvP (PvPool) trading mechanism, which allows users and fund pools to trade directly. In V1 and V2, each trading pair corresponds to a fund pool, while in V3, YFX utilizes multiple single-asset fund pools based on the risk of the underlying assets. Mainstream trading pairs such as ETH/USD and BTC/USD share one USDC fund pool, ARB/USD, UNI/USD, DOGE/USD, and other trading pairs share another USDC (USDC 2) fund pool. Adopting multiple single-asset fund pools effectively reduces staking risks from a major market shift of another cryptocurrency.

Liquidity providers (LP) can choose to stake in a fund pool with the optimized risk level according to their own risk preferences.

ChainLink Price Feeds

In the V1 and V2 versions, the price is determined by the weighted average price of the Top N centralized exchanges. In V3, the price is mainly determined by the ChainLink price feeds. The weighted average price of the centralized exchanges is used for rapid price corrections.

New Earn Reward Mechanisms

In V3, YFX token holders can stake to earn 30% of the platform's transaction fees. YLP token holders can stake to earn 60% of the platform's transaction fees and profit from selling LP tokens at a higher price. The remaining 10% of the platform's transaction fees are used to repurchase and burn TFX tokens. In addition, YFX introduces new “trade to earn” and “invite to earn” reward mechanisms that further incentivize users to trade and invite others to trade on YFX.

Switch Between One-way Mode and Hedge Mode

In V1, traders can simultaneously have long and short positions for any trading pair. In V2, traders can only have a long or a short position for any trading pair. In V3, traders can switch between one-way and hedge modes based on their preferences.

Funding Fees

YFX implements the funding fee mechanism to balance the aggregated long and short positions. When the funding fee is positive, longs pay shorts. When the funding fee is negative, shorts pay longs.

Borrowing Fees

When a trader opens a position on YFX, they borrow some funds from an LP fund pool. Therefore, traders need to pay borrowing fees to the fund pool.

In YFX V3, the maximum borrowing fee a trader can pay is 0.008%/hour.

A comparison between V1, V2, and V3

Version	V1	V2	V3
Development Time	June 2020	January 2022	January 2023
Position Mode	Support only Hedge Mode	Support only One-way Mode	Support both Hedge Mode and One-way Mode
Funding Fees	No	Yes	Yes
Borrowing Fees	No	No	Yes
Trigger Orders	No	Yes	Yes
Stop-loss & Take-profit Orders	No	Yes	Yes
Deposit & Withdrawal	Yes	Yes	No
Liquidation Execution	YFX Liquidation Bot	YFX Liquidation Bot	YFX Liquidation Bot and YFX community (when there are too many liquidations to process)
Remaining Margin after Liquidation	Add to YFX Insurance Fund	Add to YFX Insurance Fund	Return to traders
Fund Pool Model	One pool funds one market	One pool funds one market	One pool funds multiple markets
Referral	The address is recorded on-chain. One address can only have one invitation code	The address is recorded on-chain. One address can only have one invitation code	Invitation codes are recorded on-chain. One address can have multiple invitation codes
Pricing Mechanism	Use the weighted average last price on major centralized exchanges	Use the weighted average last price on major centralized exchanges	Mainly uses ChainLink price feeds, supplemented by the weighted average last price on major centralized exchanges
Add Margin	Yes	Yes	Yes
Remove Margin	No	No	Yes