Users can participate in Shield as Traders, Liquidity Providers 1 (LP1), Liquidity Providers 2 (LP2), Liquidators, and Brokers.
Traders: Open long or short positions for hedging and speculative purposes. The fixed funding fee cost approach of perpetual options gives traders a tool to adjust risk exposure as market conditions change. Liquidation is no longer based on price fluctuations, but instead on maintaining the funding fee balance.
LP1: Provide liquidity to the Public Pool. Risk and rewards are shared among LPs in this pool. Public pool is the senior tranche with limited market risk exposure, which will only take over liquidated positions from LP2 (private pool liquidity providers). Public Pool will target retail liquidity mining participants, and profit from the portion of Funding Fees and token incentives.
LP2: Provide liquidity to the Private Pool. Each LP is entitled to all the risks and rewards of that private pool. The private pool has priority of taking orders and managing their net position through active hedging strategies. Most LP2 are institutions and will profit mainly from funding fees and market making strategy. They will receive token incentives at the same time.
Liquidator: Earn liquidation bonus: liquidators actively screen all open positions that Takers and Makers have. Liquidators trigger a liquidation contract when there is an insufficient balance in the funding fee account or liquidity margin, to receive 150% of the gas expense as arbitrary rewards.
Broker: Refer new traders to Shield: decentralized brokerage system allows anyone to become Shield broker. Users only need to connect their wallets, then the smart contract will automate an exclusive referral link. Brokers get new users traded on Shield and can earn up to 40% commission rate.