IOTA EVM Buildsphere AMA #17 – Cyberperp

Published 22 September, 2024

In this AMA of IOTA Foundation which took place on August 28, 2024, Jonathan hosted Tangleman from cyberperp to discuss the mechanics of decentralized perpetual trading, the benefits and risks for both traders and liquidity providers, and the future roadmap of Cyberperp, including NFTs and token launches, and more! Read our notes below to learn more.

Background

Jonathan Hellweg (Host) – Community Manager at IOTA

Tangleman (Guest) – BD at ioLend and cyberperp

Cyberperp – a decentralized perpetual exchange on IOTA EVM

Introduction to Perpetual Trading on IOTA

Tangleman introduces himself as the BD (Business Development) of Cyberperp and Ioland protocol. He explains that Cyberperp is a perpetual trading exchange where contracts have no expiry, allowing users to long or short assets indefinitely as long as they can pay the funding premium and avoid liquidation.
Tangleman elaborates on the concept of a perpetual exchange, contrasting it with traditional exchanges that have set expiry dates for contracts. He emphasizes that with Cyberperp, traders can keep their positions open indefinitely.
When asked about how leverage is achieved, Tangleman explains the process. Traders must deposit collateral on Cyberperp and can choose leverage from 1.1x to 50x. Using an example, he describes how a $100 collateral could be leveraged to a $1,000 position by borrowing from the Cyber LP (liquidity pool). He details how profit and loss are calculated based on price movements and explains the risk of liquidation if the price moves against the trader’s position by a certain amount.

Understanding Long and Short Positions, Leverage, and Liquidity Provision in Trading

Jonathan asks Tangleman to explain the difference between going long and short in trading. Tangleman describes longing as betting on an asset’s price to increase, while shorting is betting on it to decrease. He explains leverage using an example of a 3x leverage on a $100 position, showing how profits and losses are amplified.
They discuss the mechanics of borrowing assets from the Cyberperp LP (liquidity pool) to achieve leverage. Tangleman mentions a recent issue where there wasn’t enough IOTA in the pool due to high demand for long positions, highlighting the importance of liquidity balance.
The conversation then shifts to the benefits for liquidity providers. Tangleman explains that LPs earn trading fees, currently generating around 80-100% APR on Cyber LP tokens. He describes the relationship between traders and LPs as a PvP game, where trader losses benefit the LP, and vice versa. Tangleman notes that historically, about 90% of traders end up losing money, making liquidity provision potentially more profitable in the long run.
They compare holding Cyber LP tokens to holding IOTA directly. Tangleman explains that Cyber LP is less volatile due to its composition of IOTA, Ethereum, and USDT. He illustrates how the value of Cyber LP is affected by both asset price changes and trader performance.

Exploring Copy Trading, Level-Up Benefits, and Future Enhancements

Tangleman elaborates on the copy trading feature, explaining that users can view a leaderboard to identify successful traders. He gives an example of a trader with a 12-2 score, indicating they won 12 trades and lost only 2. Users can enable copy trading by depositing a chosen amount of collateral, which will then automatically mimic the selected trader’s positions. Tangleman cautions users to be careful with the amount they allocate to copy trading, as they will share both the gains and losses of the trader they follow.
Regarding the level-up system, Tangleman provides more details on the benefits and requirements. Level one users receive a 2% additional rebate on trades made using their referral code and enjoy reduced trading fees. To reach level two, users need to deposit around 100 USD worth of tokens into the Cyber LP and create five trades within a seven-day period. Level two offers even higher fee rebates and increased earnings on Cyber LP staking.
Tangleman mentions a forthcoming level three, which is not yet achievable. This level will be tied to a future NFT release, adding an element of exclusivity to the highest tier of the platform’s reward system.

NFT Sale and Cyber Perp Token Strategy: Boosting Liquidity and Community Engagement

Jonathan asks about the NFT mentioned in the level-up system. Tangleman explains that there will be an NFT sale with 5,000 pieces. The minting price is yet to be decided, aiming for accessibility. The NFTs will have utility, enabling users to reach level three in the trading system. 70% of the funds from the NFT sale will be deposited into CyberLP, generating fees for NFT holders. 20% will go to the cyber token pool with IOTA for deeper liquidity, and 10% to the treasury for marketing and competitions.
Regarding NFT rarities, Tangleman clarifies that each NFT will be unique with different rarities, but this won’t affect fee generation to ensure fairness.
The conversation shifts to the planned cyberperp token. Tangleman explains their approach differs from other GMX forks. Instead of direct staking, users will need to pair the token with IOTA and stake it to earn 30% of platform fees. This model aims to grow liquidity and reduce token volatility.
When asked how the community can support Cyberperp, Tangleman suggests providing liquidity, testing the platform, generating referral codes, and engaging in trading activities.
Responding to a question about future plans and integrations, Tangleman outlines their roadmap: launching the token, releasing NFTs, potentially adding more trading pairs, and collaborating with other protocols like WAGMI, Velocimeter, or MagicSea for liquidity. He highlights the young age and potential of the IOTA EVM ecosystem, expressing optimism about its growth prospects.

Check out these important links

Show Information

Medium: Twitter AMA & YouTube (Audio)

Show: IOTA Foundation

Show Title: Buildsphere AMA Ep #17: Cyberperp

Show Date: August 28, 2024