Settlement (0.8.4)
When you trade on SYMMIO, your positions earn or lose money over time. That profit or loss is called unrealized PnL. It exists on paper, but it isn’t yet locked in as realized PnL. Separately, you also have an allocated balance: real collateral that can be used to pay for losses, open new positions, or be withdrawn. The protocol requires this allocated balance to remain sufficient at all times, which means you can’t close a losing trade unless you have enough realized collateral to cover the loss. Sometimes a trader is profitable overall but still gets blocked from closing a losing position, because all of those profits are still unrealized inside open positions. Settlement is the mechanism that converts some of those unrealized gains into usable balance.
Let's illustrate settling unrealized profit works with an example:
Scenario
Bob (Party A) has three open positions:
Position 1 with Rasa Hedger (Party B1):
Unrealized Profit: $300
Quote ID:
1
Position 2 with PerpsHub Hedger (Party B2):
Unrealized Profit: $100
Quote ID:
2
Position 3 with PerpsHub Hedger (Party B2):
Unrealized Loss: $250
Quote ID:
3
Bob's is technically $150 in profit, and wants to close Position 3, which has an unrealized loss of $250. However, since Bob has insufficient allocated balance, he cannot cover this loss upon closing.
In situations like this, the solver can step in and unlock the necessary funds. PerpsHub submits a signed message from Muon attesting to the current market prices and the unrealized profits and losses across Bob’s positions. The contract verifies the signature and checks that everyone remains solvent. Upon settling, $150 profit for Position1 and $100 profit for Position2 are realized. After settlement, Bob's allocated balance is $250, with Position2's profit fully settled, and Position1's profit partially settled ($150)
Position3 remains unchanged, and PerpsHub can now successfully fill the close request for Position3, as Bob has sufficient allocated balance ($250) to cover the loss ($250).
Now Bob has $250 of spendable collateral, and PerpsHub can safely close the losing position. Nothing in the system breaks, no one takes on uncollateralized risk, and Bob isn’t trapped waiting for his losing trade to recover.
This settlement process has several important protections built in. The updated prices must always lie between the original entry price and the signed current price, neither side of the trade is allowed to end up insolvent as a result of settlement and multiple positions can be settled at once, allowing a solver to quickly free up collateral across many trades if needed. More details on settlement can be found here.
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