What is Pear Protocol?
An Innovative Approach to On-Chain Pairs Trading
Last updated
An Innovative Approach to On-Chain Pairs Trading
Last updated
Pear Protocol is an array of engineering solutions aimed to address the inherent inefficiencies and complexities when pair-trading cryptocurrencies. By enabling leveraged long and short positions within a single on-chain transaction, the protocol significantly improves the process of pair-trading execution, with a superior front-end for risk management.
This is done by integrating a wide array of on-chain trading engines with a dedicated UI and UX, thus simplifying the process of opening simultaneous long and short positions in correlated assets. For example, initiating a long position in $BTC while shorting $ETH (with leverage) at the same time.
By integrating with various trading engines (e.g., , and ), Pear Protocol becomes liquidity agnostic, ensuring that users always have access to the deepest liquidity possible. The platform's design emphasizes not only scalability but also flexibility - whereby users can manage margin, leverage and other parameters like net funding in a seamless manner.
The protocol is designed to revolutionise the way pair trading execution is done.
These issues are particularly exacerbated when attempting to establish multiple pair trades, which can result in convoluted portfolio management and intricate profit-and-loss calculations. For example, reconciling a complex portfolio with varied long and short positions on a CEX demands laborious manual handling, a process that is prone to errors.
Furthermore, the protocol aims to mitigate the custody and trust issues associated with centralized exchanges (CEXs). Pear Protocol's decentralized genesis and use of decentralized trading engines ensure that traders retain custody over their assets.
Pear Protocol's technical blueprint offers use cases that span across various market dynamics, from short term narrative trading through to more sophisticated market-neutral positions. Professional and retail traders stand to benefit from an integrated monitoring and risk management system for individual pair trades.
Moreover, Pear introduces an innovative tokenized trading system that enhances position utility. By representing trading positions as ERC-721 tokens, these positions become transferable and can be integrated as collateral within DeFi protocols, paving the way for a higher degree of composability in DeFi ecosystems.
The key technical features of Pear Protocol include:
Simplicity: Leveraged long and short positions conducted in a single, consolidated transaction.
Flexibility: Seamless integration with an array of on-chain liquidity sources and DeFi platforms.
Scalability: Cross-chain expansion to facilitate efficient and rapid trading in multiple ecosystems (coming soon).
Optionality: Various trading engines that allow multiple types of trading for different pair-trading needs.
Ease of use: User-friendly interface for straightforward operations, reducing manual handling with multiple position-managing and charting tools that alleviate trading difficulties
Leveraging its first-mover advantage, Pear Protocol also commits to thought leadership and educational outreach, fostering community engagement and forging strategic alliances with key opinion leaders in the space.
This multifaceted approach not only solidifies Pear Protocol's market position but also contributes to the broader adoption and advancement of decentralized finance trading solutions.