Derion
On-chain Decentralized Speculation Protocol
Created on 29th June 2025
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Derion
On-chain Decentralized Speculation Protocol
The problem Derion solves
Decentralized perpetual exchanges struggle to operate fully on-chain due to high gas costs, mass liquidation risks, and under-collateralization. This often forces them to rely on centralized backend services and permissioned price feeds, which exposes users to greater risks and limits market access to various assets.
What's needed is a simpler, truly open speculation protocol for any on-chain or off-chain value. A market where even just two people can bet on a value, without complex setups, limitations, or the need for a service provider or "house."
Derion provides this solution.
Challenges I ran into
The first design of Derion does not use an asymptotic curve, and we’ve been facing quite a lot of issues:
- Under-collateralization condition has to be checked in every transaction, which is very gas-consuming.
- It requires manual deleverage transactions (by anyone) every time a pool is under-collateralized.
- Funding rate calculation is extremely hard for the Long and Short sides to compensate each other when the market is volatile.
While trying to solve those problems, the Asymptotic Power Curve is invented from the mathematical principle of a deleveraging pool. The curve solves every single one of our problems above.
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