How Parchment Trade Perpetuals Work
Parchment Trade provides synthetic perpetual exposure to supported crypto and US-equity markets on Sui. Unlike spot purchases, perpetual positions are derivative contracts without a fixed expiration date. A trader chooses a market and direction, supplies collateral and manages an open long or short position.
The protocol describes trades collateralized in USDC on Sui. Positions settle against an oracle-based reference price with a house pool acting as counterparty. Displayed entry prices, fees and trade execution conditions can change, so the live trading view should determine any actual order decision.
Long vs Short Positions on Parchment
The trader gains directional exposure to an increase in the reference price. The position can lose value if the market moves lower.
The trader gains directional exposure to a decrease in the reference price. The position can lose value if the market moves higher.
A leveraged position magnifies the sensitivity of position equity to the underlying price movement. It is not necessary to own the underlying spot asset to trade a synthetic perpetual, but the collateral remains at risk.
USDC Collateral and Network Requirements
According to descriptions of Parchment’s getting-started flow, USDC on Sui is used for trading collateral and a small amount of SUI may be required for on-chain network fees. Always confirm supported token types before moving assets. Sending funds on an unsupported chain can make them unusable in the protocol interface.
The trade size, collateral committed and leverage determine how much market exposure is taken. Read the displayed position details, the fee estimate and the resulting liquidation conditions before submission.
Leverage, Liquidations and Perpetual Trading Risk
Leverage increases both profit sensitivity and loss sensitivity. An adverse move can exhaust the available collateral, resulting in liquidation. Extremely high leverage can leave a narrow tolerance for even small market movements.
At 10× leverage, a 1% adverse price move corresponds to roughly a 10% move against the initial position margin before fees and other mechanics. Real liquidation thresholds depend on the platform’s actual maintenance margin, fees and price methodology.
Oracle pricing, liquidity rules, smart contracts and network availability add risks beyond ordinary market volatility. Review the protocol’s current terms before trading.
How Parchment Trading Relates to the PARCHMENT Token
Some qualifying realized losses may trigger PARCHMENT issuance under the protocol’s stated token mechanics. This is not a refund of trading losses and should not be interpreted as a guarantee of future token value. PARCHMENT can also be associated with rewards from certain referrals and achievements.
For the earning model and the token dashboard, read How to Earn PARCHMENT. For holding the token and participating in the reward stream, see Parchment Staking.
Trading fundamentals FAQ
What is Parchment Trade?
Parchment Trade is a Sui-based interface for synthetic perpetual long and short positions collateralized in USDC.
Does Parchment Trading use USDC?
The protocol’s published descriptions identify USDC on Sui as the collateral for trading perpetual positions.
Can a Parchment perpetual position be liquidated?
Yes. Adverse price moves, especially when using leverage, can erode margin and cause liquidation.
Does every losing trade mint PARCHMENT?
No guaranteed emission should be assumed. Token minting depends on qualifying realized losses and the protocol’s current rules.