Matrix Labs is a fully decentralized virtual-AMM-based perpetual swaps trading protocol running on the Polkadot and Cardano blockchains. Instead of relying on traditional AMMs, traders can go long or short any asset’s perpetual contracts with leverage of up to 25x. While many decentralized derivatives platforms struggle with liquidity, the Matrixswap vAMM is designed to provide infinite liquidity directly on-chain. The protocol uses a funding rate setup to keep the MarkPrice closely aligned with the IndexPrice. In the long term, Matrix Labs seeks to become a fully community-owned and community-governed DeFi system.

Features

Where many decentralized derivatives venues run into liquidity constraints, Matrix Labs vAMM supports trades with up to 25x leverage and infinite on-chain liquidity.100% on-chain and 100% non-custodial trading.By using Matrix Labs’s vAMM smart contracts, users can obtain exposure to derivatives for any assets listed in the market.Matrix Labs intends to expand across two major networks: Polkadot and Cardano. Through cross-chain bridges, Matrixswap aims to tap liquidity from multiple blockchain ecosystems, improving capital efficiency for traders.Matrix Labs offers users an Emergency Nuke Button (DEX aggregator) to swap multiple (or all) tokens into a single asset in one transaction. This is enabled by the underlying blockchain’s characteristics (low fees, high throughput) and shared liquidity across DEXs.The Matrix Labs platform utility and governance token MATRIX uses a deflationary economic model. 50% of platform trading fees will be directed to token buyback & burn to help offset rewards token emission.

Perpetual Swaps

Perpetual Swaps are crypto derivatives that let traders take a position on the value movement of a specific underlying asset. Perpetual contracts come with two core characteristics:

(i) Contracts do not have expiry dates. They stay active until a trader closes their position.

(ii) The underlying asset itself is not exchanged, which reduces custody-related complications.- The swap price stays close to the underlying asset’s price through funding rates. This design helps drive perpetual MarkPrice toward the IndexPrice through a convergence mechanism.

In practice, the key distinction for perpetual trading on Matrix Labs is that all assets and trades are stored and processed on-chain. Unlike Binance or Bitmex perp contracts, Matrix Labs does not depend on counterparties, and it avoids the risk tied to centralized off-chain servers. With Matrix Labs, users retain full custody of their own funds.

vAMM (Virtual AMM)

Matrix Lab's vAMM (pioneered by perp.fi) follows the same x*y=k constant product approach used by most AMMs. Still, despite the “virtual” naming, the vAMM does not hold an actual asset pool (k). Instead, the real assets (traders’ collateral) are stored in a smart contract vault that manages all of the vAMM’s collateral. Put differently, Matrix Labs uses vAMMs as price discovery engines, not as a spot trading venue. This structure is intended to let Martixswap run with infinite liquidity and no impermanent loss for stakeholders, since liquidity providers don’t need to supply liquidity.

The vAMM functions as a standalone settlement market, with all profits and losses accounted for directly within the collateral vault.

Oracle

Matrix Labs Market Oracle nodes deliver information about the time-weighted average price (TWAP) of assets. After mainnet goes live, Matrix Labs oracle operators will publish TWAP data for all assets (including major coins & shit coins) using their own nodes that pull from DEXs' API for live market pair information. As an initial reference, the system will rely on Kylin data oracle as the real-time index price feed for stable coins and major assets, since it supplies oracle solutions for the Polkadot/ Substrate environment. Each provider supplies data for a specific asset. For instance, provider k serves as the only data source for asset k.