Rage Trade is a decentralized derivatives trading platform that allows users to provide liquidity provider (LP) tokens of other protocols as liquidity for perpetual traders.

Derivatives

Rage Trade

Protocol Code Quality

Protocol Maturity

Protocol Design

Risk Rating

Watch Out

* [Documentation](https://docs.rage.trade/) 
 * Auditors 
 	* [Quantstamp](https://certificate.quantstamp.com/full/rage-trade-core) 
 	* [PeckShield](https://drive.google.com/file/d/1VeDwi9EcLhmpJhStWOV5k7HIjeLw-aoP/view) 
 	* [Audits](https://drive.google.com/file/d/1rgTgB3Zs1A6YhssF4jIsVS5l0Lr8sl1r/view) 
 	* [Audits](https://docs.google.com/document/d/1joxRpf1D-KoACf7h1xnB72YkPYKxd27oDX-9axTbIQw/edit#heading=h.mnockoickb7e) 
 	* [Audits](https://github.com/RageTrade/core/blob/159a94ca9fa75a7c1b3acf7191c2c87ebd746691/audits/quantstamp/audit.pdf) 
 	* [Audits](https://github.com/RageTrade/core/blob/159a94ca9fa75a7c1b3acf7191c2c87ebd746691/audits/cmichelio/audit.pdf) 
 * Please see our [FAQ on experienced auditors](https://help.exponential.fi/en/articles/6381015-what-are-experienced-auditors)

Exploit/Hacks

green

None

* [Website](https://www.rage.trade/)  
 * Tags: Derivatives

Info

* TVL: $13.4M (Rank #114)  
 * TVL Ranking by Derivatives: #0  
 * Blockchain: Arbitrum  
 * Chain TVL  
 	* Arbitrum: $13.4M

Key Metrics

Information


- Code reviewed by several experienced auditors including [Quantstamp](https://certificate.quantstamp.com/full/rage-trade-core) and [PeckShield](https://drive.google.com/file/d/1VeDwi9EcLhmpJhStWOV5k7HIjeLw-aoP/view)
- Anonymous team reduces transparency
- No documented protocol hacks since launch
- Basic controls to prevent oracle price manipulation

yellow


- Core protocol launched recently in 2022; maturity less than six months increases technical risk as smart contracts are not battle-tested
- Bottom 80% by total value locked increases risk
- Centralized governance increases risk
- At least one critical governance issue documented
- No governance token and/or contracts are fully immutable


- No concerns identified
- Quickswap is a direct fork of Uniswap V2 implemented on the Polygon PoS chain.

Risk Assessment

Rage Trade aims to become the most liquid and composable ETH perpetual by leveraging Uniswap V3 vault strategies that utilize underutilized liquidity provider (LP) tokens.

What we like

The platform currently only offers up to 10x leverage and only one asset (ETH) which is far less than competitor offerings.

What we like less

Offers you a great way to earn additional yield from perpetual trading fees on your underutilized LP tokens.

What it means for you

Summary

#### How Rage Trade works
Rage Trade is powered by Uni V3 using a virtual Automated Market Maker (vAMM) design. The Uni V3 vAMM pool holds virtual tokens (vETH-vUSDC) that are synthetic representations of underlying tokens in the spot market (ETH-USDC). Traders and LPs use virtual tokens to place orders on the vAMM. Additionally, Rage uses a funding rate mechanism to ensure the platform's funding rates match centralized exchange rates. Omnichain recycled liquidity allows Rage to re-use LP tokens across chains and protocols to provide liquidity into the platform's ETH perp. Rage uses LayerZero technology to pass messages to/from chains, while Stargate is used to bridge USD profits and losses (PnL) to/from the vaults. These LP tokens are deposited into the 80-20 vaults, which keep 80% of the TVL in the initial yield-generating service (isolated risk) and 20% of TVL to provide concentrated liquidity on Rage. The goal of these vaults is to earn additional yield on top of these LP tokens while replicating the payoff of an ETH-USD LP in Uniswap V2 (similar impermanent loss to Uni V2). 

The initial state of the vault is 100% in a yield-generating LP position (outside of Rage), while the vault deploys a concentrated liquidity position around the current price with an equal amount of vETH and vUSDC. As the price of ETH moves, the LP vault accumulates directional perp positions. For example, as the ETH price increases, the vault becomes short ETH perps. The rebalance operation realizes the PnL from the perp position and transfers the assets to/from the yield-generating LP. As the price of ETH moves, the concentrated liquidity position may hold an imbalance of vETH and vUSDC. A smart contract will update the range once per day by withdrawing the current range order and deploying a new range with equal parts vETH and vUSDC centered around the new price. When the ETH price moves significantly, a large perp position will be accumulated in the vault. Once this positions size exceeds 20% of the vault's value, the reset liquidity operation closes the vault to manage risk and the liquidity will be returned to the initial stated based on the new vault size.
#### How Rage Trade makes money
Rage collects 0.15% of each swap with 0.1% going to liquidity providers (LPs) and the remaining 0.05% going to the protocol. The protocol fees are collected across markets and sent to a team address.
#### How you make money on Rage Trade
You can make money by placing directionally levered bets on ETH. If you have a more long-term view, you can earn a portion of all protocol generated revenues from staking LP tokens. The fee split is currently 2/3rd paid to LP stakers and the remaining 1/3 paid to the protocol.