Market Making Engine

Overview of Zaros Market Making Engine

Zaros unveils an innovative Market Making Engine utilizing the Tree Proxy Pattern, which consists of Leaves, Branches, and a Root for its structure. This engine is supported by a modular architecture, including critical components such as FeeBranch.sol, CreditBranch.sol, CollateralBranch.sol, and ZLPBranch.sol. This setup lays the groundwork for a sturdy and flexible ecosystem.

Benefits to Liquidity Providers (LPs)

LPs play a crucial role on Zaros by providing credit to its markets. In exchange for their contribution, LPs earn a sizeable portion of trading fees from Zaros’ perpetual futures markets. Certain Vaults may also reward LPs with zPoints, enhancing the benefits of participation.

USDz Backing

USDz is paid out to profitable positions, and is accounted as debt by the CreditBranch. Traders can swap USDz to any of the ZLP Vaults underlying collateral at any point in time, using Chainlink's Data Streams prices for settlement. This ensures traders can have a smooth experience on Zaros while the system remain collateral agnostic, enabling the DAO to smoothly spin up new ZLP Vaults.

Rewards

LPs allocate their collateral to specific ZLP Vaults designed for efficiency in asset management, supporting a variety of purposes. By depositing Liquid Staking Tokens (LSTs) and Liquid Restaked Tokens (LRTs) into ZLP Vaults, LPs can earn up to 70% of trading fees generated, linking their success directly to the platform’s performance.

This innovative framework not only incentivizes liquidity providers but also establishes a stable and scalable trading landscape for perpetual futures on Zaros, fostering a mutually beneficial ecosystem for traders and LPs alike.