What's Vanilla TRS?

1. What's Vanilla TRS?

Vainilla TRS(Total Return Swap) is a Decentralized Coin Derivatives Service Provider, which lets users long or short new tokens anytime, even just 10 minutes after they launch.

1. How does it work?

Users don’t need to borrow tokens—just pay a dynamic interest rate to gain exposure. LPs stake tokens to earn rewards while taking the opposite side of short trades, collecting interest and liquidation profits.

1. What tokens will be supported?

Initially, tokens are listed one-by-one based on popularity and liquidity. In the future, permissionless listings will enable any token to be listed on day 1.

1. What are the risks?

There are a few risks to consider when shorting on Vanilla:

Liquidation risk is the risk that your dump position is liquidated due to insufficient collateral from the market moving against you.

Oracle risk is the risk that the oracle quotes an incorrect price, causing liquidation when it shouldn't have.

Squeeze risk is the risk that cascading short liquidations cause forced buying pressure, causing a rapid increase in price.

For lenders, there is a different set of risks. Utilization risk is the risk that withdrawals are not available due to all the tokens being lent out.

Bad debt risk is the risk of some accounts being left with more debt than collateral after liquidation, which may result in a socialized loss.

1. How much leverage is allowed?

Up to 10x (adjusted based on token volatility).