Introduction

Chromatic Protocol is a decentralized perpetual futures protocol that provides permissionless, trustless, and unopinionated building blocks which enable participants in the DeFi ecosystem to create balanced two-sided markets exposed to oracle price feeds and trade futures in those markets using various strategies.

It is the very first protocol that introduces the concept of partitioned LP with dynamic fees. Chromatic Protocol provides a liquidity pool divided into multiple bins with different trading fee rates. The fee rate at which trades are executed is determined based on the dynamics of taker’s trading demand and maker’s liquidity supply. This dynamic fee system achieves a balanced maker-taker equilibrium, mitigating the inherent instability of closed systems like futures markets and significantly enhancing the sustainability of the protocol.

Furthermore, Chromatic Protocol is a permissionless, open-source, non-upgradable protocol that enables the creation and trading of futures markets exposed to price feeds provided by an oracle. It is characterized by a minimalist, low-level, and unopinionated design. Market creators and participants can define customizable markets supported by the protocol to optimize and innovate, fostering a secure and optimized decentralized financial ecosystem.

Lastly, Chromatic Protocol is trustless and censorship-resistant. By eliminating trusted intermediaries and rent extraction commonly found in traditional futures markets, it ensures fair and capital-efficient trading by processing transactions based on smart contracts. Additionally, Chromatic prioritizes accessibility and censorship resistance, enabling anyone to freely participate in the decentralized financial market.

Chromatic Protocol is currently built on Arbitrum.