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Once a market graduates — or when an existing Monad coin is listed — it moves off the internal virtual curve onto the secondary engine. Instead of trading against a standalone virtual pool, the perp now prices off real spot liquidity on Uniswap, backed by the Counterflow Vault (cfUSDC).

How pricing works

On the secondary engine, fills are based on three things:

1. The on-chain oracle

  • Uniswap v4 pools (graduated markets): The engine tracks a smoothed moving average of the pool price. Samples are taken once a second and capped so a single quick swap can’t spike the oracle.
  • Uniswap v3 pools (listed tokens): Uses Uniswap’s built-in 5-minute TWAP. If a token is paired with WMON, the price converts to USD using the main WMON/USDC pool.

2. “Worst-of” fill protection

To stop traders from front-running a lagging oracle or a moved spot pool, takers always fill at the worse of the oracle price and the live pool price:
  • Longs (buys): Fill at whichever price is higher.
  • Shorts (sells): Fill at whichever price is lower.
This means you can’t buy at an old low oracle price while the real pool is already higher, and you can’t dump at a high oracle price while the real pool is lower.

3. Skew premium and spread

When a market gets lopsided (e.g. way more longs than shorts), the crowded side pays a small premium. The premium scales with the order size and is path-averaged, so splitting an order into small chunks costs the exact same as one big order. Every trade also includes a baseline 10 bps half-spread.

Leverage and limits on secondary

  • Opening leverage: Starts at 15x on day one of graduation, then steps up by 5x each day until reaching 40x.
  • Open interest caps: Scaled directly to how much USDC depth the spot pool actually has.
  • Single-wallet limit: No single trader can hold more than 25% of the market’s total capacity.

Backed by Counterflow

Graduated markets are backed by Counterflow, Priest’s community liquidity vault. If a market runs into a temporary deficit paying out winning traders, Counterflow steps in to cover the difference. In exchange, Counterflow gets 30% of the market’s trading fees and keeps the surplus when traders lose.

See also