# Introduction

The Qiqi Protocol is a decentralized perpetual contract platform built on an Automated Market Maker (AMM) framework. Qiqi aims to offer an open, transparent contract trading system that promotes efficient liquidity provisioning, controlled risk, and supports a wide range of token trading pairs.

**Key Features:**

1. **AMM Based on Oracle Spot Price**: Qiqi's AMM generates a price curve based on spot prices obtained from oracles. This curve adjusts the perpetual contract's price according to traders' long and short positions, maintaining a dynamic equilibrium with spot prices. The following benefits arise from this approach:

* (For Traders) Automated orderbook generation for perpetual contracts, ensuring transparent and visible pricing.
* (For Traders) Slippage/funding rate discounts/rewards based on traders' long/short positions, making our contracts often more favorable than market prices.
* (For Traders & LPs) Support for a wide array of external price feeds, including Chainlink and all Uniswap trading pairs.

2. **Exponential Decay Tracking of Spot Price**: Qiqi's AMM employs a consistent and continuous exponential decay pattern to track oracle-obtained spot prices. This approach offers the following benefits:

* (For Traders) Contract prices remain stable around spot prices, enhancing credibility.
* (For Traders & LPs) Manipulating the oracle price efficiently through changes in spot prices has limited impact, reducing and buffering the influence on contract prices.
* (For LPs) Price movements are not achieved through arbitrage, minimizing losses during price anchoring.

3. **Effective LP Utilization**: Qiqi's AMM constructs a virtual liquidity pool with a certain leverage ratio based on the net asset value of the LP pool, providing consistent pricing support. This approach offers the following benefits:

* (For LPs) Diversified asset exposure by becoming a single-sided LP.
* (For Traders & LPs) LPs enjoy a leverage multiplier that enhances capital efficiency.
* (For LPs) Slippage and trade limits are determined based on LP assets and counterpart positions, ensuring effective risk management.