Quanto Perpetuals
Techstack
Quanto Perpetual Contracts
Quanto.trade introduces a novel class of perpetual derivatives known as quanto perps, where all trading pairs are denominated in the platform’s native token, $QTO, regardless of the underlying asset. This means that profits, losses, and liquidations across all markets—including majors such as BTC, ETH, SOL, and meme coins—are quantified and settled in $QTO.
Whether a user deposits BTC, ETH, SOL, USDC, or any other supported crypto asset as collateral, the contract itself remains denominated in $QTO. This design enables cross-collateralized exposure while preserving a consistent risk model across assets. Quanto.trade offers Quanto Perpetual Contracts in US Dollars. This allows exposure to the US Dollar price of an asset, without needing to hold US Dollars / Tether or the asset directly.
The following information assumes usage of the “COIN/USD” perpetual contract as an example. Information is generalisable to all Quanto Perpetual contracts. Please check the contract specifications directly for that information.
A Quanto COIN/USD perpetual contract has a fixed Quanto multiplier regardless of the USD price of COIN. This allows traders to go long or short the COIN/USD exchange rate without ever touching COIN or USD. Traders will post margin in one of the 400+ coins supported as collateral on Quanto.trade, and make or lose QTO as the COIN/USDT exchange rate changes.
How are Quanto Perpetuals Quoted?
The COINUSD perpetual’s underlying is the COIN/USD exchange rate as recorded in the underlying index. The contract is quoted in USD and all margin and PNL calculations are denominated in Quanto.
*Assumes USD/USDT rate of 1.
Traders who think that the price of COIN will rise will buy the perpetual contract. Conversely, traders who believe the price will drop will sell the perpetual contract.
Margin and Leverage
All margin is posted in $QTO, which means traders can go long or short this contract using any collateral, but the margin is calculated only in QTO. Most Quanto Perpetuals feature a leverage between 10x and 100x.
Settlement
As this contract is perpetual, there is no settlement (subject to Liquidation).
Note: since this product is a perpetual contract, funding occurs every hour (usually 8 hours). Please see the Funding Section for more information, and for the current rates please see Funding Rates on each pair in the Quanto-Perps trading interface.
Trade Inception
In a quanto perpetual contract, you're trading the price movement of one asset (e.g., ETH/USD), but the profits and losses (PnL) are settled in a different asset—the quanto asset (QTO). This creates a layer of abstraction where:
The contract tracks an external price (like ETH/USD).
The PnL is realized in a fixed multiplier of a separate token (like QTO).
Traders don't need to hold or post margin in the asset being tracked—only in the quanto asset.
Impact of $QTO Denomination on Risk Parameters
The $QTO-denominated structure introduces unique dynamics in liquidation, stop loss, and take profit calculations. Since all PnL and margin metrics are expressed in $QTO, fluctuations in its price directly affect your account’s effective leverage and risk profile.
For example:
If you're long BTC and its price remains flat, but your collateral asset (e.g. ETH) declines in value, the dollar-equivalent value of your collateral shrinks. This leads to less margin and pushes your liquidation price higher.
E.g., A 10% drop in $ETH can reduce your buffer and trigger earlier liquidation even if the underlying asset hasn’t moved. Conversely, if your collateral appreciates while your BTC long remains flat, your collateral becomes more valuable, increasing available margin and lowering your liquidation threshold. E.g., A 10% increase in $ETH can increase your buffer and trigger later liquidation even if the underlying asset hasn’t moved.
This behavior mirrors traditional quanto contracts in legacy finance, where instruments are settled in a different currency than the underlying, often introducing an implicit volatility and correlation premium (or risk).
Additionally, Even though PNL is denominated in $QTO, to make it easier to understand, Quanto frontend converts and displays PNL in USD on the interface.
For example: If you’re long 1 BTC with current $QTO price at $0.01, and your current PNL on this BTC long is +10000 QTO, you’ll be up 100 USD. Therefore, if QTO price later rallies to 0.011 (up by 10%), your long position becomes 1.1 BTC, and your PNL (10000QTO) becomes 110 USD worth. Alternatively, if QTO price becomes 0.009, your long position will be worth 0.9 BTC and your PNL (10000 QTO) becomes 90 USD.
Key Concepts
Abstracted Exposure You're not directly buying or selling ETH or SOL. You're entering a synthetic position whose PnL is settled in QTO, while exposure follows the tracked asset’s price (e.g., ETH/USDT).
Fixed Multiplier The only constant in a quanto contract is the multiplier (e.g., 0.0001 QTO per $1 move). This multiplier determines how much PnL you earn or lose per unit of price change in the tracked asset.
PnL Comes from Price Movement Only The PnL is determined strictly by the price difference in the tracked asset (e.g., ETH/USDT), multiplied by the contract size and multiplier. The PnL itself is always quantified in QTO, regardless of what asset is being tracked.
Value and Collateral in QTO All margin requirements, liquidation thresholds, and payouts are handled in QTO, not the asset being tracked (e.g., not in ETH or USDT). This means users must understand that even if ETH goes up, their profits are in QTO, which introduces secondary risk if QTO fluctuates.
Implications
Leverage and margin calculations are all based on the QTO value of the position, not the tracked asset.
Risk management must account for both the movement of the tracked asset and the market value of QTO, especially under extreme volatility.
This structure allows platforms like Quanto.trade to offer unified collateral and PnL in a native ecosystem token (QTO), simplifying UX while abstracting asset exposure.
Coin Collateral and LTVs
Quanto.trade supports a wide range of collateral types, including:
$QTO (native platform token)
$QSR (QTO-SOL LP token)
$QLP (the QLPs native loan token)
Major cryptocurrencies (e.g., BTC, ETH, SOL)
Stablecoins (e.g., USDC, USDT)
Memecoins (e.g., PEPE, MOG, SPX, etc.)
NFTs from select collections.
Coin collateral
Universal Collateral and Full Portfolio Margining on Quanto.trade
Quanto.trade is redefining capital efficiency in crypto trading by allowing users to post nearly any digital asset as collateral—including majors, altcoins, memecoins, and LP tokens—across the entire platform. Through its universal collateral framework and full portfolio margin system, users gain unprecedented flexibility and efficiency in how they deploy capital. Whether you're a long-term holder seeking additional exposure, or an active trader managing multiple positions, the platform ensures your assets are always working for you.
Key Benefits:
Maximum Capital Efficiency Traditional platforms often silo assets, requiring traders to convert spot holdings into stablecoins or margin-specific tokens to open leveraged positions. Quanto.trade eliminates this friction. Users can retain long-term spot holdings while simultaneously using those same assets as margin to gain exposure to other markets. This allows traders to avoid opportunity costs and maintain their core positions—even during active trading.
Cross-Collateral Portfolio Margining Instead of isolated margin accounts per asset, Quanto.trade uses a unified risk engine that evaluates the total value of a user's deposited portfolio in real-time. This allows for intelligent risk assessment and higher capital utilization. Traders can deploy leverage across multiple positions without having to overcollateralize or manually shift funds between wallets.
Hold While You Trade Long-term conviction holdings no longer need to sit idle. Whether it’s SOL, BTC, PEPE, or an LP token from a DeFi yield strategy, all eligible assets can contribute to your margin balance. This opens up the ability to "hold and trade" simultaneously—preserving upside potential while accessing short-term opportunities.
Diversified Risk Management With a broad collateral base, users can balance and hedge risk more effectively. Exposure to one asset can be offset with positions in another, creating more strategic and dynamic portfolio management options. This is particularly valuable in volatile markets where capital agility is crucial.
Streamlined User Experience There’s no need to pre-convert or wrap assets to begin trading. Deposits are seamlessly recognized and integrated into margin calculations, removing the common barriers to entry.
Incentivized Ecosystem Participation By allowing QTO LP tokens (QSR) and other yield-generating assets to be used as collateral, Quanto.trade also enables users to stack yields—earning on-chain rewards while unlocking capital for leveraged trading. This dual utility model encourages deeper liquidity participation across DeFi strategies.
LTV ratios
Each collateral asset is assigned a Loan-to-Value (LTV) ratio that reflects its market volatility, liquidity profile, and systemic risk. These LTVs determine how much leverage a trader can deploy per unit of deposited collateral.
For example, stablecoins and BTC may offer higher LTV ratios due to relative price stability, while meme coins may have lower LTV thresholds to account for higher volatility and thinner liquidity.
Current LTV ratios for each supported asset are published on the Quanto.trade and are subject to change based on market conditions and risk engine adjustments.
Cross-Margin Architecture & Liquidation Risk
Cross Margin
Quanto.trade employs a cross margin system powered by portfolio-wide margining, allowing traders to deploy multiple collateral types across all open positions. This architecture offers capital efficiency and flexibility—but also introduces additional risk if not properly understood.
In a cross-margin environment, all assets within a trader’s account contribute to the margin pool. While this allows users to open larger positions or diversify across multiple markets, it also means that a single underperforming position with deeply negative PnL can place the entire account at risk of liquidation, not just that individual trade.
This risk is further compounded by Quanto.trade’s unique use of quanto-style perpetuals, where all contracts are denominated and settled in $QTO, regardless of the underlying asset or collateral used.
Unexpected Liquidations from $QTO-Denominated Exposure
Because both margin calculations and liquidation thresholds are expressed in $QTO, fluctuations in the token’s price introduce an additional layer of complexity and volatility. For example, when combined with cross-margining, this means that one highly leveraged or volatile position can consume margin from the rest of the portfolio, triggering full account liquidation even on unrelated positions with neutral or positive PnL.
Liquidation Mechanics
To preserve platform solvency and minimize the risk of cascading losses, Quanto.trade implements a structured, automated liquidation mechanism. This ensures that undercollateralized accounts are addressed swiftly and fairly when portfolio values fall below required maintenance margin thresholds.
Because all trades and debt are denominated in $QTO—the core token powering Quanto Perpetuals—non-QTO collateral can still generate QTO-denominated losses. If an account incurs such losses, they appear as a negative QTO balance (also known as QTO debt). This debt is repaid through:
Future QTO gains on trades
Direct QTO purchases on Quanto.trade
On-chain QTO deposits into the account
If liquidation occurs, non-QTO collateral is automatically converted into QTO to cover the debt.
When Liquidation Is Triggered
A liquidation event occurs when the value of a trader’s collateral—adjusted by its Loan-to-Value (LTV) ratio—becomes insufficient to meet margin requirements. This can happen due to:
A drop in the market value of the collateral
Adverse price movement of open positions
An increase in the value of $QTO (raising debt liability)
Any combination of the above, especially under cross-margin conditions
Liquidation can also occur without open positions if a user holds only non-QTO assets and has a negative $QTO balance. In this case, those assets will be converted to $QTO to repay the debt.
Once the account’s margin health falls below the maintenance threshold, the liquidation engine initiates liquidation to restore solvency.
Liquidation Process & Priority
Liquidations are designed to be as minimal and capital-preserving as possible.
Partial Liquidations: Rather than closing the entire account, only enough position size is closed to bring the account back above margin requirements.
Prioritization Logic:
Highest LTV Ratio First – Positions with higher-risk collateral are liquidated first, as they pose greater insolvency risk.
Largest Notional Position Second – If multiple positions have the same LTV, the largest one is liquidated first to minimize systemic exposure.
This process ensures that risk reduction is efficient, trader losses are minimized, and platform stability is maintained.
QTO Debt Rules
Since all debt is denominated in $QTO:
Opening Positions with Non-QTO Collateral: If portfolio value drops, a negative QTO balance may occur.
Debt Repayment Methods:
Win trades to earn back QTO
Buy QTO on Quanto.trade and repay
Buy QTO on-chain and deposit
QTO Debt Interest
Effective Immediately: Outstanding QTO debt will accrue interest after 24 hours.
Key Parameters:
Interest Rate: 12% annualized, charged hourly
Grace Period: 24 hours after debt is incurred
Accrual: Interest applies daily after the grace period, even if positions remain open and unrealized losses are the cause of the debt
What This Means for Traders
Aim to repay or reearn QTO debt within 24 hours to avoid interest charges
Interest accrues even on open positions with unrealized losses if QTO debt exists
Actively monitor account health to avoid both liquidation and debt interest costs
Manage collateral and positions proactively to maintain maximum trading flexibility
Why This Matters
By introducing an interest mechanism for QTO debt, Quanto.trade strengthens the long-term sustainability of the platform while encouraging prompt debt resolution. This keeps the QTO liquidity ecosystem healthy and ensures fairness for all participants.
Protocol Fees
As outlined in the Tokenomics section, the QTO token follows a deflationary economic model designed to reward contributors, reduce supply over time, and support sustainable ecosystem growth. Platform fees are charged on all trades placed, although these fees are not taken as revenue, but rolled back into the QTO token in perpetuity.
Fee Distribution
All protocol fees generated on Quanto.trade are distributed as follows:
70% Burned: Permanently removed from supply via on-chain burns, directly reducing the circulating supply and enhancing long-term value.
30% Allocated to QLP Rewards: Paid out to QLP stakers in proportion to their contribution, providing consistent incentives for liquidity providers.
This creates a constant flywheel of supply reduction while rewarding those who backstop the protocol’s liquidity. See the burns wallet here.
Fees paid
The base fees on the platform's Quanto Perpetuals are outlined below. The upcoming rewards program will allow users to level up their account and get QTO and SOL rebates on all of their fees paid.
Maker
0.02%
0.015%
0.02%
0%
0.02%
0%
0.02%
0.02%
Taker
0.07%
0.035%
0.07%
0%
0.07%
0%
0.07%
0.07%
Quanto Perpetuals Examples & Case Studies
Trading with QTO as collateral:
Because of QTO denomination in Quanto Perpetuals, position size and PNL scale proportionately with QTO price.
If a user longs 1 SOL and the price of QTO increases 10% while their position is open, they are now long 1.1 SOL from the same price.
This increases their USD PNL, but their QTO PNL is the same - the QTO they earn as PNL is just worth 10% more USD now.
If the QTO price decreases 10% instead of increases, the user is now long only .9 SOL and their PNL is 10% lower.
Trading with non-QTO collateral:
The QTO related changes to position sizing discussed above still impact users trading with non-QTO collateral, but the volatility of their collateral should also be considered.
Non-QTO collateral balance is calculated by taking the value of your collateral and multiplying it by it's LTV (listed on the Quanto.trade homepage).
DOGE has an LTV of .85. A user who deposits $100 DOGE will have a collateral balance of $85.
If that DOGE suddenly doubles in price, the user now has $170 collateral in their account. This doubles their available margin to trade with and pushes active positions farther from liquidation.
If that $85 DOGE halves in price, the user now has $42.5 collateral in their account. This halves their available margin to trade with and pushes active positions CLOSER to liquidation.
Trading with stablecoin collateral:
Stablecoins (ideally) don't have the volatility of other forms of collateral, but changes to QTO price can still impact position sizing and margin ratio in the ways described above. Users trading with stablecoins should make sure to monitor their margin ratio for this reason.
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