📜Whitepaper

Abstract 📝

Xtrading is an AI-powered Perpetual DEX designed to simplify and enhance on-chain trading across multiple asset classes—from cryptocurrencies and meme tokens to NFT-based indexes and even real-world assets (RWA). The platform leverages cutting-edge AI tools, voice-enabled trading, and robust risk management features to deliver an intuitive, efficient, and secure environment for both novice and professional traders. By uniting advanced technology with user-centric design, Xtrading aims to redefine perpetual trading in the decentralized finance space.

Introduction 📖

The Rising Need for Perpetual Trading

Perpetual futures have emerged as a dominant force within decentralized finance (DeFi), providing leveraged exposure, market hedging, and efficient capital utilization. Yet, most existing solutions lack accessible UI and intelligent tooling, leaving many potential participants behind. Traders must juggle multiple platforms, face liquidity fragmentation, and cope with the steep learning curve of on-chain order books.

In response, Xtrading has constructed a general-purpose AI-driven Perpetual DEX, enabling:

• Effortless Trading via natural language commands and a clean user interface, bridging the gap between complicated DeFi protocols and mainstream adoption.

• High-Performance Order Book with up to 10× leverage while maintaining decentralized transparency and security.

The Role of AI

Artificial intelligence is fundamentally changing how users interact with technology. In a decentralized exchange setting, AI can:

• Enhance User Experience: Voice and chat commands minimize manual errors and accelerate order placement.

• Provide Personalized Support: RAG-based AI systems operate 24×7, delivering instant educational tips, platform guidance, and risk insights tailored to each trader’s needs.

By integrating AI deeply into the user journey, Xtrading aims to democratize access to advanced trading tools—lowering the entry barrier and improving financial literacy for the next wave of DeFi participants.

Xtrading’s AI-Driven Perpetual DEX

Overview of Platform Advantages

Below is an at-a-glance summary of the key pillars that make Xtrading unique:

1. AI-Powered Perpetual DEX

• AI features for strategy optimization, user onboarding, and seamless interactions.

2. Voice & Chat Commands

• Execute trades or request market data via natural language, eliminating typical UI frictions.

3. Lite & Pro Modes

• Lite: Mobile-focused, up to 6× leverage for quick trades.

• Pro: Desktop-optimized with advanced charting, up to 10× leverage, and custom layouts.

4. Fat-Finger Protection

• One-click order-fill reduces input errors, ensuring accurate price and quantity selection.

5. Multi-Currency Margin

• Accepts various tokens (USDC, USDT, WETH, etc.) with an internal swap engine to unify collateral.

6. Cross-Margin (Coming Soon)

• Maximize capital usage across multiple positions, simplifying margin management.

7. SuperNova (SNV) Index

• Our original NFT floor-price perpetual for collections like BAYC, MAYC, Azuki, Doodles, and CloneX—still relevant for those seeking NFT exposure.

8. Beyond NFTs

• Extended coverage for crypto assets, Ordinals, RWA, and meme tokens—making Xtrading a versatile platform for diverse trading interests.

9. AI-Enabled Customer Support

• 24×7 intelligent assistants providing personalized guidance, from basic queries to advanced trading tips.

10. Telegram Notifications

• Real-time updates on order fills, margin calls, and liquidation alerts sent directly to your Telegram.

11. Desktop-Optimized Pro Mode

• Advanced order book, keyboard shortcuts, powerful charting, and layout customization for power users.

12. Staking & Token Utility

• Lock or stake $XTRA tokens to unlock premium AI features, reduced fees, or governance privileges.

13. Referral & Ambassador Programs

• Earn additional revenue by inviting new traders. Specialized roles (Knights, Squires) reward proactive community support.

14. Security & Insurance

• Audited smart contracts, robust liquidation mechanisms, and an upcoming insurance fund for asset protection.

15. Forward-Looking Roadmap

• Plans to integrate Uniswap v4 hooks, AVS, and eventually deploy an XTrading app-chain for superior scalability and user experience.

Core Architecture

XTrading runs on a central limit order book (CLOB) approach for fair, transparent price discovery. Key components include:

• On-Chain Smart Contracts: Handling margin logic, custody, and settlement.

• AI Off-Chain Services: Voice-to-text, natural language processing, and RAG-based customer support.

• Security Framework: Ongoing audits, multi-sig governance, and future insurance protections.

Why XTrading Stands Out

1. Intuitive Experience: Innovations like voice commands and fat-finger protection drastically reduce friction, appealing to both DeFi newcomers and veterans.

2. Versatile Market Coverage: From stablecoins and mainstream cryptos to NFT-based indexes and emerging meme or Ordinal tokens, XTrading consolidates these markets under one roof.

3. AI-Assisted Risk Management: Dynamic alerts, customizable margin monitoring, and real-time support empower traders to make confident, data-driven decisions.

4. Community-Centric Growth: Inclusive referral and ambassador programs that reward ecosystem participation.

Core Protocol ( Protocol Specs )

1) Funding Payments

Funding Rate

The Funding Rate is the main factor that aligns the Mark Price (the perpetual contract’s trading price) with the Index Price (the underlying reference price). It is computed as:

FundingRate = (MarkPriceTwap - IndexPriceTwap) / IndexPriceTwap

• Funding Amount = FundingRate * PositionSize

• The funding rate at XTrading is capped between -0.75% and +0.75% at the protocol level, preventing excessive fees for either side.

Global Index (G)

Instead of distributing funding payments on a strictly hourly basis, XTrading accumulates each user’s funding in a global accumulator, settling it whenever they interact with the protocol (e.g., by placing or closing a trade).

• A global accumulator Gt is maintained according to:

Gt = Gt-1 + (Δt) * (Mark - Index) / 86400

where:

• Δt = time in seconds between Gt and Gt-1

• (Mark - Index) = difference between the mark price and index price

• 86400 = number of seconds in a day

• For example, if Δt = 300 seconds (5 minutes), you have:

Gt = Gt-1 + (Mark - Index) / 288

• Internally, the protocol calculates a per-account relative accumulator. Whenever a user executes an action (place an order, close a position, etc.), the system settles the funding owed:

Funding = (Gi - Ii) * PositionSize

where:

• Gi = current value of the global index

• Ii = the user’s last cached index

• PositionSize = number of contracts or tokens in the user’s position

This design streamlines funding settlement, minimizing gas fees and on-chain overhead.

2) Liquidation

Liquidation Trigger

A position becomes eligible for liquidation when its Margin Ratio (MR) falls below the Maintenance Margin Fraction (MMF). The current MMF is set at 0.0625 (or 6.25%).

Liquidation Price

Liquidation Price depends on whether you are long or short:

• Long Positions

LiquidationPrice = (| EscrowedAmount - InitialPositionValue |)
                   / ((1 - MMF) * Quantity)

• Short Positions

LiquidationPrice = (| EscrowedAmount + InitialPositionValue |)
                   / ((1 + MMF) * Quantity)

where:

• EscrowedAmount = net collateral remaining in the user’s margin account (initial deposits minus any withdrawals and realized PnL)

• InitialPositionValue = notional value at the time the position was opened

• Quantity = size of the position, in contracts or tokens

Liquidation Penalty

If liquidation occurs:

• 80% of the penalty (remaining margin) goes to the protocol

• 20% is allocated to the liquidator as an incentive

Example

1. Trader Alice deposits $100 in USDC and opens a short position worth $1,000 (10x leverage) on an asset priced at $10 each (so position size = 100 tokens).

2. Initial Margin Ratio: 100 / 1000 = 0.1 (which is above 0.0625, so Alice is initially safe).

3. Suppose the asset’s price rises to $10.36. The notional value of Alice’s short position is now $1,036, reducing her collateral effectively to $64 (due to unrealized losses of $36).

4. Margin Ratio = 64 / 1036 ≈ 0.0618, which is below 0.0625. This triggers liquidation.

5. Liquidation Price for a short position:

LiquidationPrice = (| EscrowedAmount + PositionValueAtOpen |)
                   / ((1 + MMF) * PosSize)
= (|100 + 1000|) / ((1 + 0.0625) * 100)
= 1100 / (1.0625 * 100)
= 1100 / 106.25
≈ 10.35

The position gets liquidated around $10.35. The penalty is split: 80% to protocol, 20% to liquidator.

Liquidation Bot

Anyone can run an open-source liquidation bot. It monitors the protocol’s subgraph for under-collateralized accounts and executes liquidation transactions via the order processor API routes. This decentralized approach ensures the market self-regulates and maintains solvency.

3) Margin Specs

Margin Ratio

Margin Ratio (MR) gauges your position’s risk level:

MR = (Value of Collateral) / (Value of Position)

• If a trader deposits $200 in collateral and opens a $1,000 position, MR = 0.2.

• As the market moves, MR fluctuates based on unrealized gains or losses.

Keeping MR above the Maintenance Margin Fraction (MMF) is critical to avoid liquidation.

Buying Power

Buying Power defines how much you can trade relative to your deposited collateral. With up to 10× leverage on XTrading:

• Example: Deposit $200 → Buying Power of $2,000 (10×).

• Opening a $400 position uses $400 of your buying power, leaving $1,600 of remaining buying power.

Margin Usage

Reflects the portion of your margin currently in use. If you deposit $500 and open a position worth $100 in initial margin:

Margin Usage = 100 / 500 = 0.2 (or 20%)

Mark Price

Mark Price is derived from the current highest bid and lowest ask in the order book:

MarkPrice = (LowestAsk + HighestBid) / 2

This price is used for PnL calculations and liquidation thresholds, ensuring trades settle at a fair, transparent rate.

Account Value

Your Account Value (AccValue) is the sum of your Collateral, Unrealized PnL, and Realized PnL:

AccValue = Collateral + UnrealizedPnL + RealizedPnL

Example

1. You deposit $300 in collateral.

2. Open a long position of 30 tokens at $5 each (position value = $150).

3. Suppose the token’s price rises to $8. Your unrealized profit is $3 per token, so $3 × 30 = $90.

4. You pay $0.50 in funding fees.

5. New AccValue = $300 + $90 - $0.50 = $389.50.

Health Factor

The Health Factor forecasts your liquidation risk. The closer your Margin Ratio is to the Maintenance Margin (MMF), the lower your Health Factor.

HealthFactor = 100 - RiskFactor

If MMF = 0.0625, then any Margin Ratio near 0.0625 signals heightened risk.

Roadmap

Short-Term (3-6 Months)

• Cross-Margin Launch: Simplified collateral management across multiple positions.

• Refined AI Terminal: Enhanced voice recognition and chat-based user assistance.

Mid-Term (6-12 Months)

• Uniswap v4 Hooks Integration: Liquidity innovations for improved capital efficiency.

• AVS Adoption: Potential for advanced verification solutions or identity integration.

• Insurance Module: Initial rollout to safeguard traders against extreme market events.

Long-Term (12-18+ Months)

• XTrading App-Chain: A dedicated chain for higher throughput and advanced DeFi functionalities.

• Expanded RWA & Ordinals Coverage: More asset classes integrated, broadening user choice.

• DAO Governance: Progressive decentralization, with token holders guiding platform upgrades and policy decisions.

Token Utility

• Staking & Governance: Locking $XTRA tokens grants voting rights on platform changes and treasury allocations.

• AI-Feature Access: Certain advanced analytics, risk bots, or voice modules may require tokens for access.

• Reward Mechanisms: Referral bonuses, trading discounts, or premium support tiers for active token holders.

• Treasury & Buybacks: Revenue from protocol fees can be recycled into a treasury to fund further development, incentives, and ecosystem growth.

Conclusion

As the DeFi perpetual market rapidly expands, XTrading stands ready to lead in AI-driven, user-friendly solutions. By melding intuitive design, robust security, multi-asset support, and advanced risk management, XTrading lowers barriers for newcomers while offering cutting-edge tools to professionals.

Join us on this journey to reimagine decentralized trading, where voice commands, 24/7 intelligent support, and a rich token ecosystem converge to empower the next generation of traders.

Welcome to XTrading: The AI-Powered Perpetual DEX for Everyone.

Use this revised text to update the Whitepaper, ensuring it emphasizes perpetual markets, AI integration, and the broad scope of digital asset coverage while highlighting how XTrading delivers a unique advantage in user experience, security, and community-driven innovation.