Technical Whitepaper
Explore the infrastructure powering 3xtremes: a high-velocity, low-latency derivative market engine designed for extreme leverage up to 10,000x and transparent, cryptographically secure settlement.
Introduction
3xtremes operates as an on-chain trading platform built on the Arc Testnet. Unlike traditional order-book exchanges, it relies on a round-based settlement system. We condense market volatility into 60-second execution epochs, allowing users to leverage capital up to 10,000x on real-time simulated price feeds.
The 60-Second Epoch Loop
1. Initiation (T-60s)
The Keeper bot triggers the start of a round. A cryptographic seed is requested from the Gelato VRF to ensure absolute fairness.
2. Trading Window
From T-60s to T-5s, users can open Long or Short positions with massive leverage based on the real-time streamed prices.
3. Lock Window (T-5s)
In the final 5 seconds, all actions are frozen. No positions can be opened or closed, effectively eliminating front-running and latency arbitrage.
4. Settlement (T-0s)
The round concludes. The final price is calculated on-chain, and all active positions are settled automatically.
Architecture & Bots
3xtremes utilizes an off-chain worker infrastructure to handle extreme frequencies without bloating the EVM gas state.
- Keeper Bot
The heartbeat of the system. It handles round lifecycles, streams pre-computed VRF candles to the frontend via WebSocket, and synchronizes the current price on-chain every second.
- Liquidator Bot (Wick Detection)
An independent bot constantly scanning open positions. Crucially, it evaluates the High and Low of every candle tick—not just the Close. If a position hits -100% PnL, the bot liquidates it instantly on-chain, earning a 2% margin reward.
VRF Deterministic Engine
How do we ensure that the platform owners cannot manipulate the charts to liquidate users? By using a Verifiable Random Function (VRF). The price candles are purely mathematical derivatives of an on-chain seed.
Candle Generation Algorithm
- XOR Hash: Every second evaluates a hash:
h = seed ^ (second * MAGIC_CONSTANT) - Global Drift & Noise: Introduces macro trends (±15) and micro volatility (±150 ticks per second).
- Mean Reversion Gravity: A 5% structural pull toward the starting price to prevent infinite spiraling.
- Volatility Tiers: Triggers random volatility spikes ranging from 0.01% up to 3.00% absolute deviation.
Because the algorithm is open-source, any user can verify that the live chart precisely matches the cryptographic seed emitted by the smart contract. Manipulation is mathematically impossible.
Trading Mathematics
Virtual Credit (USCC)
Deposited USDC is converted to a virtual credit called USCC at a ratio of 1 USDC = 1000 USCC, allowing high-precision micro-margin trading.
Absolute Liquidation
There are no margin calls. If your position hits -100% PnL, it is instantly seized. The formula is exact:
SHORT Liquidation = EntryPrice + (EntryPrice / Leverage)
At 10,000x leverage, a mere 0.01% price movement against your position results in immediate liquidation.
Protocol Economy
The financial stability of the platform relies on the FeeManager and the Insurance Fund.
- Trading Spread (0.01%)
A flat fee of 0.01% of the total SIZE (not margin) is charged upon opening and when closing in profit. Distribution: 30% Insurance Fund, 70% Protocol Revenue.
- Liquidation Distribution
When a position is liquidated, the margin is seized. 2% goes to the Liquidator Bot as a gas reward. The remaining 98% flows to the FeeManager, where 95% bolsters the Insurance Fund and 5% goes to the protocol.
- The Insurance Fund
Acts as the ultimate counter-party. If traders collectively win more than they lose in an epoch, the Insurance Fund covers the deficit, ensuring the protocol remains 100% solvent.
Quick Start
Security & Risk Limits
Operating high-leverage infrastructure requires uncompromising security constraints. We employ 6 layers of protection.
Epoch Locking (Anti-Snipe)
T-5s hard lock on the order book guarantees fairness by preventing late-stage algorithmic sniping.
OI Imbalance Cap
Global Open Interest skew is capped at 100M USCC to prevent systemic collapse during extreme one-sided betting.
Net Exposure Limit
Individual wallets are capped at ±100M USCC exposure to prevent massive hedge-drain attacks.
Withdrawal Guard
Users cannot withdraw USDC while any position is open, eliminating reentrancy and flash-loan vectors.