Derify Protocol Documents



Derify protocol is an innovative decentralized derivative trading protocol. Traders can trade with 10x leverage[1] on exchanges based on this protocol.
Derify protocol is a programmable liquidity pool that supports multiple assets. Third-party smart contract can achieve much more advanced and complicated DeFi (decentralized finance) applications based on this protocol.
Derify protocol enables anyone to create any derivatives freely (as long as proper Oracles exist). It supports all types of derivatives (based on price index), e.g. on-chain assets like ERC-20 tokens, or off-chain assets like gold and crude oil.
Based on the very nature of derivatives and margin trading, Derify protocol introduced two innovative mechanism: hAMM (Hedged Automated Market Making) and position mining.
With Derify protocol, traders can directly trade with liquidity pool without specific trading counterparty or market maker. Furthermore, in this protocol, holding both long and short positions guarantees liquidity rewards, rather than paying funding fees like in traditional derivative exchanges.
Details of our operation as well as its feasibility are further illustrated below.
[1] Higher leverage is also supported based on the overall liquidity risk in each derivative.

Our Vision

Our goal is to become one of the safest, most adaptive and most widely-used derivative trading infrastructure in the world.
We hope the existence of Derify protocol sets stages for more innovative DeFi applications and products.
We are firm believers of Decentralized Autonomous Organization (DAO). As the project moves forward, Derify protocol will be completely owned by the community, run by the community and innovated by the community. Every holder of DRF token can participate in the community governance, and may hopefully earn substantial rewards from the growth of this project.

Current Version

The current version of Derify protocol is Derify Protocol V1.2, updated by July 2022.
With the current version, our primary objective is to support the most popular financial product - the Contract for Differences (CFD[2]). Derify Protocol will support other types of derivatives in future updates.
Currently, we are focusing on establishing fundamental system and functions, as well as building a stable and sustainable risk-control system. Other features (such as user-created derivatives, adding new ERC-20 tokens as trading currencies, etc.) will be gradually rolled out in future updates.
Plan for the future can be found in Roadmap.
[2] CFD is better known as perpetual contract for crypto traders.