> ## Documentation Index
> Fetch the complete documentation index at: https://docs.derive.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Supported Products

***

Derive supports trading of the following three products:

1. Options
2. Perpetual futures
3. Spot

Derive also supports multi-asset collateral, allowing traders to collateralize with the quote asset (USDC) as well as supported base assets (ETH, BTC, HYPE, etc). In V3, supported base assets can also be **borrowed**, facilitating two sided lending.

Every instrument and every collateral token lives inside exactly one **risk universe**. A subaccount trades inside a single universe and margin nets across the currencies in that universe only.

See [Risk Universes](doc:risk-universes) for the list of universes and what each one supports.

In the sections below we detail relevant properties of these asset classes.

# Products

## Options

Users can mint and trade European options for any expiry and strike price in supported markets, provided a supporting oracle data feed for the expiry exists.

All options are settled to a `SETTLEMENT_TWAP_PERIOD = 30 minute` TWAP of the market's base asset price. See the Settlement section for more detail.

Options on Derive are marked to the **USD** price of the underlying and are settled in **USDC**. E.g. BTC options are marked to the BTC/USD price. Base assets (serving as collateral) are marked to the **USDC** price.

Note the longest dated option supported is capped at `MAX_EXPIRY = 400 days`.

> 📘 Options are settled in the **cash asset of the universe the option belongs to**. At launch every universe uses USDC as its cash asset.

## Perpetual Futures

Users can mint and trade perpetual futures for supported markets.

To ensure perpetuals converge to their respective underlying, funding is exchanged between long and short positions. For example, if the perpetual is trading at a premium to the underlying, then longs will pay shorts funding. This encourages further shorts and decreases the differential between the perpetual and spot prices.

Derive perpetuals are settled ***continuously***. Specifically, whenever a user adjusts their position (say, via a trade or withdrawal) their unrealized funding and profit and loss is settled to the current perpetual price (not the spot price). Further, traders can have the settle function called on their account by other users (including themself!).

Perpetual markets are keyed by `(asset, risk universe)`. A perpetual is only tradable by subaccounts in the universe that lists it.

### Marking Perpetuals

Perpetual contracts are marked to the the sum of the current spot price and a `PERP_TWAP_LENGTH = 30 minute` time weighted average price (TWAP) of the difference between the spot and perpetual prices. Specifically, the mark price of the perpetual used in [Standard Margin](doc:standard-margin) and [Portfolio Margin](doc:portfolio-margin) is given by

```text theme={null}
Perpetual Mark Price = Spot Price + 30 minute TWAP(Perpetual Mark Price - Spot Price)
```

where

* `Spot Price` is the current mark price of the spot asset
* `Perpetual Mark Price` is the current mark price of the perpetual asset.

For more detail on said feeds, see [Oracles](doc:oracles).

Note that the maximum (minimum) price that a perpetual can be marked to is `1+PERP_MAX_PERCENT_DIFF =1.06` (`1-PERP_MAX_PERCENT_DIFF = 0.94`) of the spot price.

### Deprecated Perpetuals

A perpetual can be retired by giving it a `frozen_price`. A frozen perpetual is force-closed at that price the next time the holding account is touched, and it is not routed into any universe.

# Collateral

## Quote (USDC)

Each risk universe designates a **cash asset**; at launch every universe uses USDC. This is the main way by which users collateralize their option and perpetual positions. Derivatives will be settled in this cash asset.

## **Base (Multi-Asset)**

Users can also hold the underlying base asset token as a collateral or hedge. The protocol can support any ERC20 token as collateral, with new base assets (and markets) being added frequently.

For example, wETH, wstETH, sUSDe or cbBTC tokens can be used as collateral.

Which tokens a subaccount may post is decided by its **universe**, not by its positions: each universe publishes the list of collateral families it accepts.

Both margin engines (standard and portfolio) apply a **risk based haircut** to base collateral.

# Open Interest and Supply Caps

Every asset carries four independent caps **per universe**:

| Cap             | Limits                                                   |
| --------------- | -------------------------------------------------------- |
| Option OI cap   | Total open interest across that asset's options          |
| Perp OI cap     | Total open interest in that asset's perpetual            |
| Spot supply cap | Total amount of the token that may be held as collateral |
| Spot borrow cap | Total amount of the token that may be borrowed           |


## Related topics

- [Settlement](/settlement.md)
- [Portfolio Margin](/portfolio-margin.md)
- [Borrow Markets](/borrow-markets.md)