"Toxic Flow" Countermeasures

Background

GMX-inspired perp venues have liquidity fuelled by passive liquidity providers, and trades execute at 0 slippage based on oracle price. In this context, informed traders can extract value from the platform (see the Avax manipulation incident on GMX Arbitrum). On a traditional order book based venue, this would not be possible, as the cost of liquidity would be impacted.

How Other Platforms Handle It

• GMX: Splits trades into 2 transactions, introducing latency. This acts as a delay-based protection but harms UX significantly.

• Jupiter Perps: Uses a keeper model - receives trade intents and funds, then eventually submits trades. Heavy UX during high volatility (comparable to 4 seconds of latency).

Adrena's Approach

Since inception, Adrena's ethos is to keep it simple and fair, and to provide a user experience on par with what Solana offers in terms of TX settlement speed. Adrena does not use a keeper. This allows for:

• Super snappy single-transaction trade execution

• Transparent, straight on-chain experience

• No detours or proxy hops

Monitoring

Adrena monitors markout_1m, 5m, and 10m to see the PnL of trades 1/5/10 minutes after opening, allowing the team to identify and respond to toxic flow patterns.

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See Fees for the full breakdown.