1/ Introducing Jupiter Perps Additive Imbalance Price Impact Model
An adaptive pricing framework that introduces imbalance-based adjustments to traditional price impact models.
Now live on all @JupiterExchange perp markets.
2/ Overview
Traditional price impact models treat trades of equal size identically, regardless of their effect on market balance.
This creates unnecessary protocol risk when positions become heavily skewed in one direction.
3/ How it works
The Additive Imbalance model introduces additional price impact when trades increase imbalance between long and short positions.
The greater the resulting skew, the higher the cost, disincentivizing extreme positioning while maintaining competitive pricing for balanced flow.
4/ This marks a shift toward risk-aware pricing mechanisms that respond to real-time market conditions.
By penalizing imbalance-inducing flow while keeping balanced trades cheap, Jupiter perps maintains capital efficiency without any compromise.
5/ Early Results
Data shows measurable improvements, including:
• Reduced PnL volatility for LPs
• Lower open interest skew
• Enhanced protection during volume spikes
• Tight spreads for balanced trades
6/ By applying smarter risk management at the protocol level, @JupiterExchange Perps delivers a reliable trading infrastructure that protects both traders and LPs, especially during periods of market stress.
7/ Full discussion and analysis:
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