Perpetual DEX Comprehensive Tutorial

SparkDEX Eternal: A Comprehensive Perpetuals Tutorial

In this comprehensive, step-by-step tutorial, you’ll get everything you need to start trading perps like pro, from learning about perpetuals contracts and risk management, to navigating the platform and using its trading tools effectively. For additional support, a 2-minute SparkDEX Eternal video tutorial is also available on SparkDEX’s YouTube channel [HERE]. This tutorial is broken down into 4 sections. You can proceed through all 4 to get the full rundown, or skip ahead to sections that are most relevant to your trading needs. 🔶 Section 1: Getting Set Up 🔶 Section 2: Opening Your First Position 🔶 Section 3: Pro Mode — Utilizing SparkDEX’s Advanced Features 🔶 Section 4: Providing Liquidity (LPing) for Perps Traders Without further ado, it’s time to get set up on SparkDEX Eternal.

Section 1: Getting Set Up

🔸(1) Open SparkDEX Eternal: If you’re on the SparkDEX landing page, click “Launch App”. Then, select “Perps” in the top menu bar. Alternatively, navigate to SparkDEX Eternal directly via URL: https://sparkdex.ai/perps.

🔸(2) Wallet Connect: Once you’re on SparkDEX Eternal, connect your Web3 wallet to the platform by clicking the “Connect Wallet” button in the upper righthand corner, and ensure your wallet is connected to Flare.

Once connected, the UI will display your wallet address and available balance.

Section 2: Opening Your First Position

Congratulations — you are now ready to open your first perpetuals position. On SparkDEX Eternal, users can trade perpetual contracts — “perps”, for short. Perps allow traders to speculate on the future price of an asset without actually owning it. On SparkDEX, all prices are quoted in USD. For additional support, a video tutorial on opening positions is available on SparkDEX’s YouTube channel [HERE].

🔸(1) Select Your Perpetuals Contract: To begin, open the dropdown menu on the left side of the screen and select the perpetuals contract you would like to open a position for. In the example above, the user selects the XRP-USD contract.

🔸(2) Dashboard: SparkDEX Eternal’s dashboard displays key metrics related to each contract. From left to right:

• Current Order Book Prices: The top figure is a measure of the lowest ask (selling) price, and the bottom figure is a measure of the highest big (buying) price.

• 24h Data: The highest and lowest prices in the last 24 hours, and the percentage change.

• 1h Funding Fee: The left (red) figure measures the hourly rate at which long positions pay shorts. The right (green) figure measures the hourly rate at which shorts pay longs. For more information, hover your cursor over each rate. A complete breakdown of SparkDEX Eternal’s Funding Fee mechanism is available [HERE].

• Fee Discount: Users staking SparkDEX’s native token, $SPRK, receive fee discounts of up to 20% on all perpetuals trades. Full details on $SPRK staking benefits and fee discount tiers are available [HERE].

🔸(3) Long or Short: Once you have chosen your contract, you can open a Long position, where you buy the XRP-USD contract and profit as XRP’s price rises. Alternatively, you can open a Short position, where you sell the contract and profit as XRP’s price falls.

🔸(4) Order Type: Now, determine what type of order you would like to use to open a position. A Market Order opens a position immediately at the best available price, buying or selling contracts into the existing orders that populate the order book. Conversely, a Limit Order places an entry in the order book at a designated price that may be filled by other traders. Market Orders provide instant market entry, but can result in worse entry prices, while Limit Orders offer better control over entry price, but risk never being executed if the market moves in the opposite direction.

🔸(5) Collateral: In order to trade perps, users must deposit assets to the platform as collateral. SparkDEX Eternal currently supports 4 different assets as collateral: USDT0, WFLR, sFLR, and FXRP. To proceed, select your collateral type and determine the amount you want to deposit. In the example above, the user deposits 10 USDT0 as collateral.

🔸(6) Leverage: Use the leverage slider to determine how much you would like to amplify your exposure. To mirror a normal spot position, move the leverage slider to 1x. 🛑 Risk Management 🛑: Before proceeding any further, take a moment to understand the risk you are taking on by employing any amount of leverage.👇 Leverage is a unique concept offered in perpetuals markets. A user leverages deposited collateral to borrow capital from liquidity providers (LPs) on the platform, effectively gaining access to a larger position size with greater return potential. For instance, utilizing 5x leverage from a $10 deposit, a user going Long on XRP-USD opens a $50 position. Subsequently, if the price of XRP-USD increases 10%, the user’s position increases by $5 rather than $1, increasing profit by a factor 5. However, it is a law of markets that risk and return are inherently correlated. As such, leverage also puts a trader at greater risk when the market moves against an open position. Because leverage involves borrowing, if total losses approach the value of a user’s collateral, it may be liquidated — that is, sold directly into the open market at the current price — in order to repay the user’s debt, thereby protecting the system from loss. In the example above, if the user with a 5x long position on XRP-USD sees the price fall 20%, the user’s losses will be $10 rather than $2, requiring the system to liquidate the user’s initial collateral of $10 to avoid incurring systemic losses. In order to assist users in evaluating risk, SparkDEX Eternal provides comprehensive metrics so that users can see their fees, position size, and potential liquidation price prior to opening a position. Users must also accept all terms and demonstrate an understanding of the risks involved with leverage prior to trading perpetuals contracts on the platform.

Once you understand leverage and the risks involved, you are ready to proceed. Use the green “Long” or red “Short” button to open your first position, as seen in the image below.

Congratulations, and welcome to SparkDEX Eternal’s perpetuals arena!

Here, you can choose your Leverage:

Next, accept the Terms and Conditions to verify you acknowledge them:

Use the green “Long” or red “Short” button to open your first position

Section 3: Pro Mode — Utilizing SparkDEX’s Advanced Features

You’re already making great progress, so don’t get intimidated — on SparkDEX Eternal, anyone can become a pro in no time.

Crypto markets are notoriously volatile and operate around the clock, which can make managing open positions a major undertaking. To ease the experience, SparkDEX Eternal equips users with a series of advanced risk management features that allow traders to set predetermined thresholds at which to exit trades. This way, if the market makes a big move — either in favor of or against your position — while you’re asleep or away from the platform, you make sure you lock in profits or minimize losses.

The best part: you can utilize SparkDEX’s advanced features even before opening a position.

🔸(1) Activating Pro Mode: Prior to opening a position, click on the gray “Pro Trading” button. It will slide to the right and turn green, as a dropdown menu appears with all of SparkDEX’s advanced trading features.

🔸(2) Advanced Trading Features: Each of SparkDEX Eternal’s 5 advanced trading features has simple function that vastly reduces risk or locks in profits, depending on your strategy.

• Stop Loss: Designate a price where your position will automatically close if the market moves against you, protecting your remaining collateral, and avoiding liquidation.

• Take Profit: Designate price where your position will automatically close once the market moves in your favor, locking in profits before the market can turn around.

• Trailing Stop: Designate a moving price buffer that follows the market in your favor and automatically closes your position only when the price reverses by your designated buffer value, locking in profits while allowing market momentum to drive further gains.

• Reduce Only: Ensure that any new order you place can only decrease or close your existing position, thereby limiting exposure.

• Protect Order: Ensure that SparkDEX Eternal automatically adds stop loss and take profit levels to your trades, maximally managing volatility upon opening a position.

Advanced trading features may also be accessed and utilized after creating open positions via SparkDEX Eternal’s positions dashboard, located below the price chart.

To view your open positions, click on the “Your Positions” tab below the price chart.

🔸(1) Open Position Dashboard: View your entry price and market price, your total position size, total collateral deposited, the position’s total value and profit/loss metrics, and the price at which the position will be liquidated. This information is valuable for any perpetuals trader that may want to support, strengthen, or protect a position after it is opened.

To utilize advanced trading features for an open position, click on the 3-dot menu icon to the right of the Open Position Dashboard, and select from the dropdown menu.

🔸(2) Edit Collateral: If a position is nearing liquidation, adding collateral can help to protect it by moving the liquidation price further away from the market price. Alternatively, if a position is in profit, collateral can be withdrawn for other uses by increasing leverage.

🔸(3) Add Trailing Stop: Designate a moving price buffer that follows the market in your favor and automatically closes your position only when the price reverses by your designated buffer value, locking in profits while allowing market momentum to drive further gains.

🔸(4) Select Market & Share Position: Traders with open positions may examine positions across multiple contracts, or share their open positions with their communities on social media.

🔸(5) Close Position: To manually close a position, click on the X icon to the far right of the position metrics and input the amount of the position you would like to close. For additional support, a video tutorial on closing positions is also available on SparkDEX’s YouTube channel [HERE]. Note: By clicking on the X icon on the right of your position, you can easily set Limit Orders and correspondingly set Take Profits and Stop Losses.

🔸(6) Limit Orders: The same Take Profit and Stop Loss features that may be set prior to opening a position may also be set using Limit Orders. After clicking the X icon corresponding to a position, select the “Limit” button to select a price above or below the current market price.

🔸(7) Take Profits and Stop Losses: Here, you may input a price for your Limit Order where you would like the protocol to automatically close your position to prevent further losses — essentially a Stop Loss. Alternatively, you may input a price where you would like the protocol to automatically lock in profits — essentially a Take Profit.

🔸(8) Execution: Click the orange “Close” button to execute your Limit Order.

That’s it — now you’ve opened and closed your position, and you know how to trade perps on SparkDEX Eternal like a pro.

Section 4: Providing Liquidity (LPing) for Perps Traders

If you’re looking to grow your capital on SparkDEX Eternal, you don’t have to be a trader. There’s another way: you can provide liquidity (LP) to perpetuals traders who are looking to take on leverage. For additional support, a video tutorial is also available on SparkDEX’s YouTube channel [HERE]. First, navigate to the “Pool” page. 🔸(1) SparkDEX Pool: If you’re on the SparkDEX landing page, click “Launch App”. Alternatively, navigate to SparkDEX Eternal directly via URL: https://sparkdex.ai/pool.

🔸(2) Perpetual Liquidity: Then, in the horizontal menu bar just below, select “Perps”.

🔸(3) Providing Liquidity: In order to LP, fill in the information according to your objectives.

• Asset & Amount: Liquidity must be provided in one of SparkDEX Eternal’s supported collateral assets: USDT0, WFLR, sFLR, and FXRP. Once you have selected your asset, determine the amount you would like to LP.

• Slippage Tolerance: How much price movement and corresponding loss of value you’re willing to accept between placing and executing your order.

Once you have filled in all fields, click “Deposit Order”.

If you want to withdraw liquidity from SparkDEX Eternal at any time, simply return to the Perpetual Liquidity page.

🔸(1) Withdraw: On the Perpetual Liquidity page, click on the “Withdraw” tab to the right of “Deposit”.

🔸(2) Withdraw Order: Determine your asset, amount, and Slippage Tolerance, and click on the “Withdraw Order” button.

Congratulations! You are now a SparkDEX Pro trader, and a savvy LP.