Key participants 🤹
For RiskSwap to operate as intended there is a need to accommodate external and internal actors into the system. Read on to learn more!
Irreplaceable actors in the RiskSwap system are Traders, Oracle, Liquidators, Liquidity Providers, Market Makers. The incentive for platform participants to follow the intentions of the system mainly consists of tokens. In this vein, the system is supported by a natural stimulation mechanism that contributes to the continuous operation of the platform.

Traders

Traders are internal actors who have the right to interact with the platform and take part in platform-related events. In the broadest sense, traders are the immediate contributors to the volume, liquidity, and commissions on RiskSwap. Among all traders, one can differentiate several types with different roles and goals such as speculative traders, arbitrageurs, and longer-term investors.

Stakers

Stakers actively participate in RISK staking to extract extra passive yield by depositing assets to a staking smart contract.

Oracle

Oracle is an external actor, to whom specific roles and permissions are assigned by the Public Governance. Oracle extracts the price feed from the given data provider to ensure the authenticity, and validity of the price of the collateral at that time. Price Oracles also have a crucial function in submitting timely data for the initiation of the liquidation process. To get consistent Oracle data, RiskSwap derives collateral prices by accessing a decentralized Oracle Infrastructure.

Liquidators

The main assigned task of liquidators is to actuate the process of liquidation. Any liquidator on the RiskSwap platform can initiate the liquidation process of an undercollateralized vault. Liquidators play a salient role in the act of liquidating the outstanding debt of collateral and therefore are key figures in the platform’s ecosystem.

Liquidity providers

Anyone can become a liquidity provider by providing liquidity to the separate AMM pools within RiskSwap conceptually Order Book model. By providing liquidity to the futures pool (which is segregated from the options’ pool) providers can accrue a much higher percentage of return with a risk of considerable loss. This type of liquidity providing becomes a double-edged sword that with auspicious market conditions can, ultimately, be extremely lucrative.
RiskSwap also incorporates a traditional staking pool. Staking pool constitutes a traditional incentivized reward system that doles out RiskSwap tokens and ensures a liquidity lock that prevents a sudden or steep price drop of the RISK token. RiskSwap benefits by the way of insured liquidity from AMM in case of unexpected market turbulence that might result in vaults being undercollateralized.

Market maker

On RiskSwap, Market Maker is the governing head of liquidity thereby acting as the main actor sustaining the Order Book model in an operative state. Market Maker upholds price slide-off risk to be minimal and to keep it in a medial state that allows for adequate spread.
There are also two other crucial tasks accomplished by Market Maker on the RiskSwap platform. Market Maker can also take part in the liquidation process. With more users entering the platform, every user will have a chance to partake in the liquidation mechanism. Coincidentally with that, Market Maker maintains trades on illiquid strikes so that users can employ every existing financial instrument even with the other users’ absence from trading with the same instruments.
Last modified 27d ago