# Mechanism

Shield is building a secure, stable, and open decentralized derivatives trading protocol based on a fully non-cooperative game network. Shield's decentralized network has five types of participants.&#x20;

![](https://4207105469-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FkVrWGu1mzw8472NSjgWC%2Fuploads%2FXMdpUp0a54E99VcQ410B%2Fphoto_2022-05-31_13-49-36.jpg?alt=media\&token=be62882d-4de0-41ef-a448-28b9c701cc10)

**Brokers**

With the "Broker Campaign" [commission system](https://docs.shieldex.io/product/broken-reference), brokers bring a steady stream of traders to the Shield network through education and referrals.

**Traders**

Shield users pay funding fees for their trading needs.

**Private Pool**

Sellers of Shield protocol, who provide liquidity to the protocol's private pool through their professional market-making capabilities and earn an order taking liquidity bonus (SLD) and trader funding fees.&#x20;

**Public Pool**

The reserve liquidity pool is used when the entire private pool has insufficient liquidity, or the LP order margin is inadequate. Everyone can provide liquidity and earn LP rewards (SLD) through liquidity mining

**Liquidator**

Trigger liquidation contracts when there is an insufficient balance in the funding fee account or liquidity margin, to receive 150% of the gas expense as arbitrage rewards&#x20;

Each role has a clear interest incentive and sufficient competition mechanism. Each person acts in their interest to facilitate the network needs, hence achieving the optimal *network-wide Nash equilibrium* to maintain the security and stability of the network.<br>


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