Zeta Protocol FAQs
As stated in Section 5.4 of the Terms and Conditions Zeta does not offer services or products to users in a few excluded jurisdictions. The Excluded jurisdictions include:
- the United States;
- the People’s Republic of China; and
- any jurisdiction identified under the Financial Action Task Force’s list of “High-risk and Other Monitored Jurisdictions”.
As of Feb 2023 the jurisdictions identified under the Financial Action Task Force’s list of “High-risk and Other Monitored Jurisdictions” are:
- Burkina Faso
- Cayman Islands
- Democratic Republic of the Congo
- North Korea
- South Africa
- South Sudan
- United Arab Emirates
Zeta has been audited by Kudelski. You can find the full audit here: https://github.com/zetamarkets/audits/blob/master/kudelski-08-07-22/PUBLIC_RELEASE_Zeta_Markets_Zeta_Markets_Digital_Assessment.pdf
Zeta currently only accepts USDC as collateral. Users can only deposit and withdraw USDC from the system. All trades are settled and margined in USDC.
Fees and Transaction Costs
The first time a user deposits, a zeta margin account is created for the user.
This is a one time cost that costs ~0.02 SOL and is reimbursed when an account is closed.
How Are Trades Settled?
Zetas programs use an oracle feed to fetch the underlying asset price. This is used in our system to then track market prices and also settlement prices which are used to mark the outcome of a trade. When a trade is closed or settled the profit and loss is realized to the users trading account.
How Do Liquidations Work?
When a user doesn't have enough account balance and PnL to cover their required margin a user's account is open for liquidation.
Liquidators can then step in and take over the user's portfolio, in doing so they will get rewarded a % of the liquidatees maintenance margin.
This will be an area of intense scrutiny for us, and we will aim to stress-test our engine thoroughly. The good news is that by building on Solana we can build a very performant, low-latency liquidation engine. We are optimistic this will work well as other Solana projects such as Mango Markets have been able to capably handle mass liquidation events as of recent.
BTC, ETH, SOL, ARB & APT markets are available for trading on Zeta
There are scenarios where a liquidator does not step in to secure a portfolio that should be liquidated. In these scenarios an insurance fund will be used to cover bankruptcy in the platform.
A decentralised exchange is a platform for buyers and sellers to trade against each other without needing to rely on a central organisation or party to hold assets or clear trades. Instead this is done by automated, transparent code deployed on a distributed ledger.
In the DEX world you often see spot exchanges - these are exchanges where the underlying assets are traded. Derivatives are not tokens or cryptocurrencies, instead they are contracts that derive their price from an underlying asset, and as such provide exposure to this underlying asset.
Under Collateralization allows users to trade with more capital than they currently have. This is extremely useful as it lets users utilise their capital more efficiently.
When trading in an undercollateralized system there must be a system that tracks your capital, your profit and loss and your active positions and orders. By tracking all these things the system ensures that you have enough capital to service your positions. This is done at a portfolio level which means that your profit in some positions can be used to offset your loss in others, meaning you are margined across your portfolio.
Historically DEXes have not been able to match the performance of centralized exchanges due to speed and transaction fees. Solana allows over 50,000 transactions per second and fees less than 1 cent. This allows us to create an experience that rivals centralized exchanges whilst still maintaining decentralisation. Relative to other blockchains Solana offers this performance on the Layer 1 level - which gives the added benefit of composability with any protocol within the ecosystem. Lastly the Solana technical infrastructure is a lot more aligned with TradFi system, meaning that it is easier to onboard institutions onto DeFi.
Derivatives are undoubtedly more complex than spot trading, however we believe a lot of this is due to poor user experience and design. We strive to make things as simple as possible and believe that we have built the best derivatives trading experiences on DeFi for beginners.
Yes! Zeta has been built keeping the mobile experience top of mind. While we do not have a native Android or iOS app we do have a mobile optimized website that you can access via your browser. It is designed to look and feel like an app and is something we are very proud of, try it out! Note that trading is currently (as of 1st Feb 2023) unavailable on mobile as we upgrade the experience.
As with all trading platforms users can incur losses while trading. Seeing as we do under-collateralized trading, users also face the risk of being liquidated if they do not have enough capital to offset their losses.
In options trading there are these metrics known as the Greeks - delta, gamma, theta, vega etc. There are all based off Greek letters. We are options geeks so Zeta which is also a Greek letter was a really cool name to us!
The Zeta core contributors have traders and developers who have worked in some of the best tradfi derivatives trading firms, software devs/data scientists from huge tech companies, along with a bunch of experience across building apps for millions of active users.
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