How it works
The LP and the payout queue
What you trade against, where its money comes from, and what happens when it cannot pay a winner at once.
The LP
The LP is the Exchange’s own USDC, held to settle trades. It started at $0: no seed capital, no founders’ deposit, no LP raise. It grows from what losing traders pay in and shrinks by what winners are paid out.
Nobody can deposit into the LP or withdraw from it. The only way to share in its economics is to hold and stake TOKEN, which is minted to traders on losing closes and liquidations; the LP’s value above $10,000,000 is passed on to stakers.
The payout queue
Because the LP holds only what traders have lost, sometimes it cannot pay a win in full. The unpaid part then becomes a claim in a first-in, first-out queue. Later losses refill the LP, and the queue is paid from the front, oldest claim first.
Your margin is never queued. When you close a position funded from your available balance, the margin comes back to your balance at once; only the profit can wait. On a losing close, what is left of the margin is yours immediately. A position you funded from your queued balance is different: its margin was itself a claim, so on close the whole surviving claim can be queued again.
While anything is queued, the LP is frozen: every new win is queued in full behind the existing claims, losses and liquidations go to a side bucket reserved for the queue, and no loss or liquidation fee is charged. A harvest pays claims from the front as long as there is cash, at most 64 per call; our keeper runs it whenever there is something to pay.
What this means for you
If the LP can pay your win when you close, you are paid at once. If it cannot, the queue holds the difference and pays you as cash comes in. A queued claim is on-chain debt of the Exchange to you: not a refund and not a haircut, a delay of unknown length.
You do not have to wait idle: a new position can take its margin from your queued claims instead of your free balance (the newest claims first, up to 50 claims per open). The app shows the total queued, your own claims and how much is ahead of them.
Trading while the LP is small or underwater is rewarded: at launch that is when TOKEN mints at its highest rate, after the switch to the supply-share rule a loss that refills an LP below zero counts up to 5×, and while claims are queued every loss goes toward paying them. The bootstrapped LP page explains the idea; Solvency & queue has the exact accounting.