Convergence FAQ
No, Convergence is a system that allows people to buy or sell illiquid assets due to size, being sold in bulk or asset type. Users can also use algorithms to place orders automatically. When two orders match, a special function is triggered filling the order.
Convergence RFQ is an Over the Counter plugin, where counterparties can select any protocol marketplace as a clearing venue. It can be used to quote illiquid trades of any kind, long tail assets, whether they be spot, perpetuals, options, nfts
An aggregator splits orders in different parts and routes them to different clearing venues, where arbitrageurs still have a small window to take advantage of the different arrival to n venues if splitted at x different times.
Transparency is one of the features that often goes unnoticed until something breaks. While Convergence RFQ aims to have privacy features in V3. Until Recently the electronification of markets has accelerated at a rapid pace due to pandemic, macro, and policy conditions Convergence believes by bein on-chain we will democratize access to institutional level liquidity to every asset type that can be tokenized.
Convergence RFQ aims to be differentiated by being the first fully on-chain RFQ system with a sophisticated risk engine for derivatives. With a product suite for spot, perpetual and option markets we aim to provide sophisticated market makers with the ability to unlock maximum capital efficiency for their on-chain positions Imagine having your liqudity generating yield on the chain on a lending protocol while reusing this position as colletral when submitting a trade on Convergence RFQ. Unlocking the possibility of LP's from using their positions to submit RFQ's on the Convergence Network. Takers will benefit from better execution as the cost of capital will be lower on Convergence
Convergence RFQ fills quotes by allowing takers to post their RFQs online and inviting makers to respond to those RFQs with competitive bids. The takers can then review the bids and select the one that best quote fits their needs.
Yes, Convergence offers options and perpetual RFQs where our risk engine calculate a collateral deposit needed depending on the product being built. Convergence's in-built SPAN Risk Engine is a suite of risk management scenarios designed to help traders and market makers manage their risk and calculate the collateral ratio on their position. The Risk Engine allows traders to unlock a certain degree of capital efficiency when trading derivatives allowing traders to build more exotic strategies such as call spreads, butterflies, and even autocallables.