What is ArithFi (ATF)? A derivative trading platform with an innovative SCP model.
ArithFi is a derivative trading platform that utilizes the SCP (Smart-contract Counterparty) model to act as a partner in futures and options trading for all users. ArithFi eliminates entities like MM (Market Makers) and LP (Liquidity Providers) to provide a unique derivative trading experience for users. Based on SCP model, ArithFi is able to offer 0 fees and 0 slippage derivatives trading.
What is ArithFi?
ArithFi is a derivative trading platform that employs the SCP (Smart-contract Counterparty) model, with smart contracts acting as counterparts in futures and options trading for all users. ArithFi also eliminates market makers (MM) and liquidity providers (LP) to mitigate risks and remove the order matching steps in traditional derivative trading.
The Operational Mechanism of ArithFi
ArithFi employs the SCP model, with smart contracts acting as counterparts for all participants in the derivative trading platform. This approach ensures decentralization and virtually unlimited liquidity in derivative trading through the issuance and burning of ATF tokens. Furthermore, ArithFi eliminates key entities such as MM and LP from the trading process, promoting fairness among all ATF token holders. As a result, they will collectively share risks and, in turn, profit in proportion to their participation in derivative trading on ArithFi.
SCP Model for Futures Trading
The SCP model operates in futures trading as illustrated by the following example:
If a user opens a long position in BTC/USDT with a leverage of 10x, collateralizing it with 1000 ATF tokens, they are required to send 1000 ATF to the smart contract as an opening fee (considered as burning ATF tokens). From this point, two scenarios can unfold:
If the BTC/USDT price increases by 1%, the user's profit is 10%. When the user closes the position, the smart contract automatically returns 1000 ATF plus 100 ATF in profit to the user.
If the BTC/USDT price decreases by 1%, the user incurs a loss of 10%. When the user closes the position, the smart contract automatically returns the remaining 900 ATF to the user.
SCP model for options trading
The SCP model operates through an example of option trading as follows:
If a user buys a call option for BTC/USDT at a cost of 2000 ATF, with a strike price of $30,000 and an expiration date of December 31, 2024, they need to send 2000 ATF to the smart contract as the option opening fee (considered as burning ATF tokens). Before the option expires, two scenarios can occur:
If the option's calculated value through the SCP model at that time is 3000 ATF, the user can sell the option to the smart contract. In this case, the smart contract will automatically return the initial 2000 ATF plus 1000 ATF in profit to the user.
When the option expires, if the BTC/USDT price at that time is $35,000, the option's value for the user is 5000 ATF. The user needs to execute the option sale, and the smart contract will automatically transfer 2000 ATF plus 3000 ATF in profit to the user. However, if the BTC/USDT price is $25,000 when the option expires, the option's value for the user is 0 ATF, indicating they have incurred a complete loss.
Features of ArithFi
Futures
This feature allows users to trade futures contracts for various crypto and forex assets, with a maximum leverage of up to 100x. ArithFi offers 0 trading fees and 0 slippage futures trading. There are two types of trading orders available for users to choose from, including Limit order and Market order.
Note: Users can only trade with ATF tokens, so they will need to use the next feature, Swap, in order to participate in trading.
Swap
This is a feature that allows users to swap other tokens for ATF tokens in order to trade on the platform. However, ArithFi currently only supports swapping USDT/BNB for ATF and will provide support for other token types in the future.
Copy
This is a feature that allows users to copy the trades of others, with displayed ROI (Return on Investment) metrics for reference. This feature is similar to Copy Trade functionality on prominent CEX (Centralized Exchange) platforms such as Binance and Bybit.
When users choose someone to copy trades, they will set the amount of ATF tokens to allocate based on the risk ratio they are comfortable with to mitigate the risk of excessive losses when copying someone else's trades.
ATF token
Basic information about ATF token
| Attribute | Details |
|---|---|
| Token name | ArithFi Token |
| Ticker | ATF |
| Blockchain | Ethereum, BNB Chain |
| Token type | ERC-20, BEP-20 |
| Contract | Ethereum: 0x00000000ba2ca30042001abc545871380f570b1f, BNB Chain: 0x00000000ba2ca30042001abc545871380f570b1f |
| Uses of tokens | Utilities, Administration |
| Total supply | 1 Billion ATF |
ATF Token Allocation
| Allocation | Percentage |
|---|---|
| Smart Contract Reserve | 50% |
| Investors | 20% |
| Team & Early Contributors | 15% |
| DAO Reserve | 15% |
Token ATF Allocation Schedule
Currently, ArithFi has not disclosed information regarding the ATF token allocation schedule.
What is ATF Token Used For?
ATF is the native token of ArithFi and is used for the following purposes:
- As the primary means of transaction within the platform.
- As rewards for airdrops to users who participate in early experiences.
- Token holders of ATF can participate in project governance through a DAO
Where can investors trade ATF tokens?
Currently, investors can only trade ATF tokens on the PancakeSwap V2 exchange with the trading pair ATF/USDT.
Where can investors store ATF tokens?
ATF is an ERC-20 and BEP-20 standard token, so investors can store it in various wallets such as Metamask, Trust Wallet, Coin98 Wallet, and others that support these standards.
Development Roadmap
ArithFi has a development roadmap consisting of three phases as follows:
- Newton Phase: ArithFi provides efficient SCP model-based futures contracts for various crypto and forex assets, minimizing trading costs for users. Additionally, the project will integrate futures contracts for Real World Assets (RWA) into the platform.
- Euler Phase: ArithFi introduces its own Layer 2 solution to efficiently handle on-chain derivative transactions within the platform.
- Gauss Phase: ArithFi introduces M-Function, a tool created within smart contracts that allows individuals to build various financial products such as futures, options, and other derivative instruments. M-Function will be built on smart contracts from ArithFi's Layer 2.
Development Team:
Currently, ArithFi has not disclosed the identity of their development team to the community.
Investors:
ArithFi has finished the seed round fundraising, but has not disclosed the investors.
Partners:
Currently, ArithFi has notable partners including BNB Chain, Followin, Coin98, among others.
Summary:
ArithFi is a derivative trading platform that utilizes the SCP (Smart-contract Counterparty) model, with smart contracts acting as counterparts in futures and options trading for all users. ArithFi eliminates Market Makers (MM) and Liquidity Providers (LP) to create a fair trading environment for all ATF token holders, where risk and profit are proportionate. Through this article, you should have gained some basic understanding of the ArithFi project to make your own investment decisions.