PARCHMENT token

PARCHMENT is a Sui coin with 9 decimals. You earn it when you lose on a trade. It is not collateral and cannot be redeemed for USDC. You can stake it for a share of protocol fees.

What earns PARCHMENT

Minting follows your realized trading loss, not your fees:

• Losing close: the price loss taken from your margin, capped at that margin.
• Liquidation: see Liquidation. Liquidation mints are claimed from the Token page.
• Winning close: nothing.

Nothing is minted for a wash: holding both a long and a short on the same market, a self-liquidation, or closing a position in the same on-chain millisecond as an opposite-side close of yours on the same market.

Mint rate

You mint up to 100 PARCHMENT per $1 of realized loss, final after the UTC day closes and is finalized. The rate falls as total trader losses grow. With H the total loss counted so far across all traders, and S = $120,000,000:

rate per $1 = 100 x (S / (S + H))^2

Trader wins never lower H, so the rate normally only goes down. The one exception is an admin void: it removes the voided mint's loss from H, which can raise the rate.

Daily mint cap

A day's mints can be scaled down if the pool did not gain enough that day; at least 10 PARCHMENT per $1 of that day's loss is kept. In detail, all loss mints in one UTC day share a cap. When the day ends, it is finalized:

1. Gain room. The day earns room of 100 PARCHMENT per $1 of the pool's net trading gain that day. That fresh room first repays any outstanding floor debt (step 3). What is left, plus unused room from the previous 7 days, funds the day's mints.
2. Loss-day floor. Whatever the room, the day keeps at least 10 PARCHMENT per $1 of that day's counted trading losses, but never more than was actually minted that day. So a day with no net pool gain can still keep part of its mints.
3. Floor debt. What the floor keeps above the available room is recorded as floor debt, which later gain room repays before it funds new mints. Outstanding debt is capped at 10,000,000 PARCHMENT by default (the floor on $1M of uncovered losses). Near the cap, the floor keeps only what the remaining headroom allows.
4. Scale-down. If the day minted more than it keeps, every mint from that day is scaled down by the same ratio (rounded down) and the excess is burned.

Parchment's admin can change these parameters.

Every loss mint is Provisional until its UTC day is finalized. After the day closes at 00:00 UTC, anyone can finalize it, oldest day first. Finalizing applies the steps above, and the mint is then Final.

A Provisional mint shows its full amount, with an estimate after the cap, which can still go down. A Final mint shows the paid amount and any amount burned by the daily cap. It can also show an amount voided by an admin (see Admin void).

Lock and vest

Every mint is:

1. Locked for 7 days. It cannot be transferred, sold or staked.
2. Then vested linearly over 30 days. Anyone can send release-unlocked, including you or the app on your behalf. It always pays the vested amount to the owner's wallet, never to the caller.

While it is locked or vesting, it can earn yield on locked PARCHMENT at half weight.

Exiting early. After the 7-day lock you can take everything at once. The vested part is paid in full. The unvested part is paid minus a penalty that starts at 50% when the lock ends and falls linearly to 0% at the end of the vest. Penalties go to stakers, paid out over 7 days. There is no early exit during the lock.

Admin void

Parchment's admin can void a mint, in whole or in part, while it is still in its 7-day lock, including after its day has been finalized. The voided PARCHMENT is burned. No on-chain proof is required; the void only records a reason code in its event. Once the lock has ended, a mint can no longer be voided. A void also removes that mint's loss from H, so the mint rate can go back up.

Loss fee

On every losing trade, a 2% loss fee is taken from what the pool gains and split between stakers and the treasury. It is always taken, even while the payout queue is waiting. See Staking.