# Core Concepts

## The Bilateral Model: PartyA and PartyB

Most crypto derivatives today are traded on order-book exchanges. Traders place bids and asks on a shared book, and a matching engine decides when two orders meet.

Instead of using a centralized order book, traders on SYMMIO express intents. An intent is simply a request that says: *“I want to go long or short this market, here is my price, my size, and the collateral I’m using.”* When a trader submits this intent, it becomes visible to a network of independent counterparties called [**solvers**](https://docs.symm.io/getting-started/glossary-of-terms). Each solver can decide whether they want to take the other side of that trade. So rather than fighting for priority in a centralized orderbook, traders using SYMMIO simply declare what they want and the market comes to them.

This model removes the need for a centralized matching engine and makes the system permissionless, flexible, and peer-to-peer. It allows anyone to create and trade derivatives in a trustless manner, without relying on a central exchange.

<figure><img src="https://1257875949-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYQhBmTCs9MwhhuPQrV5v%2Fuploads%2Fqav9o9qs3DYgrYx34z8D%2FSymmioDocsV0.8.4%20(9).png?alt=media&#x26;token=cc864215-8690-4ef6-8cc4-f96b38cbff87" alt=""><figcaption></figcaption></figure>

To make this possible, SYMMIO introduces three main roles:&#x20;

* **Party A**: the trader who creates an intent.&#x20;
* [**Party B**](https://docs.symm.io/getting-started/broken-reference): also called the solver or hedger, who chooses to accept that trade.&#x20;
* **Liquidators**: impartial actors who monitor positions and step in if collateral falls below safe levels.&#x20;

{% hint style="info" %}
See the [Glossary ](https://docs.symm.io/getting-started/glossary-of-terms)for more information.
{% endhint %}

When a solver accepts a trader’s intent, the position opens on-chain, with collateral from both parties locked into the protocol. When the user wishes to close his position, he simply declares an intent to close his position, the solver handles the close request, and both parties' balances are updated.

## Intent-Based Trading: How Trades Actually Happen

Trading on Symmio follows a simple flow:

1. **You send an intent** — "I want to go 10x long on ETH at this price"
2. **A solver sees it** — They decide if they want to take the other side
3. **They lock it in** — The solver accepts, and both parties lock collateral
4. **Position is open** — You now have a live position against that solver
5. **Close when ready** — The trader can request to close; settlement happens on-chain

This is different from AMMs (where you swap against a pool) or order books (where you match with anonymous orders). Here, a professional counterparty explicitly agrees to your trade.

## Collateral, Margin, and CVA

Three terms you'll see everywhere:

**Collateral** — The actual funds you deposit (usually USDC). This is your money in the system.

**Margin** — The portion of your collateral backing a specific position. With 10x leverage, a $1,000 position requires $100 margin.

**CVA (Credit Valuation Adjustment)** — A small buffer on top of margin that protects against counterparty default. Think of it as a security deposit that covers the worst-case scenario if the other party can't pay.

Here's how they relate:

```
Collateral = Locked Margin + CVA + Available Balance
```

When you open a position, margin + CVA get locked. If the trade goes badly and your losses approach your total collateral, you risk liquidation.
