Key features

User Staking (Lenders)

• Users can stake their assets into the TRS liquidity pool.

• Staked assets become available as borrowable liquidity for traders.

• Lenders earn yield from fees generated by leveraged traders.

• Assets remain secure through a permissioned adapter, ensuring no impact on the original LP mechanics.

Long Positions (Leverage Trading)

• Users can borrow assets from the TRS liquidity pool to open a long position.

• TRS integrates with on-chain oracles to track asset prices in real time.

• Positions are managed with collateral requirements, ensuring proper risk control.

• Gains are settled in the borrowed asset, while liquidation occurs if the collateral ratio falls below the threshold.

Short Positions (Synthetic Borrowing)

• Users can borrow assets from the TRS pool to sell on the market, effectively shorting them.

• Short traders provide collateral to cover potential losses.

• Profits are realized by repurchasing the asset at a lower price.

• The system ensures that traders are always within a risk-managed environment to prevent under-collateralization

Liquidation Mechanism

• TRS employs an automated liquidation system to protect lenders and maintain protocol stability.

• When a trader's collateral ratio falls below a predefined threshold, the liquidation process is triggered.

• The smart contract verifies liquidation conditions in real time.

• If conditions are not met (e.g., due to abnormal market fluctuations or oracle delays), the liquidation is automatically halted to prevent unfair liquidations.

• This mechanism ensures that traders are not subjected to unjust or excessive liquidations during volatile market conditions.

Total Return Swap provides a capital-efficient, decentralized, and flexible solution for traders and liquidity providers. By offering staking opportunities, leveraged long trades, and short-selling capabilities, TRS enhances trading strategies while maintaining a risk-managed environment.