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Risk Management Mechanism
Revolutionary Risk Management and LP Seniority Solution for UrDEX Liquidity Providers
One of our priorities is risk management for LPs. Until now, UrDEX has developed the Risk Management & LP Seniority system to address common issues in zero-price impact perpetual. By introducing Pools with varying risk profiles, UrDEX Liquidity Providers (ULPs) can select the level of risk they are willing to take, isolating long-tail risk more effectively. The Pools range from the lowest-risk Guardian Pool to the highest-risk Divine Pool, each representing a pool of assets like BTC, ETH, and stablecoins.
With this innovative solution, UrDEX is empowering ULPs to manage their risk exposure more effectively while still providing attractive returns, allowing ULPs to choose their preferred risk level and APR.
The table above displays the percentage of profit or loss associated with each asset class for the three Pools. The Divine carries the highest risk in the event of unexpected market conditions or other incidents, which is why it is allocated the highest percentage of platform revenues and, consequently, has the highest APR. The Guardian, on the other hand, has the lowest risk and receives the smallest percentage of platform profits.