Trading FAQ
Questions about leverage trading, liquidation, risks, and order execution.
Why trade on a DEX?
Trading on 01 offers users greater control, transparency, and security over their assets compared to traditional centralized exchanges. On 01, trades are executed directly on-chain in a non-custodial and permissionless manner — meaning you always retain ownership of your funds, without the need to trust a third party to hold or manage your assets.
What are the risks with trading?
Trading digital assets carries significant risks:
- Market Volatility — Prices can be highly volatile, and you may lose part or all of your invested capital
- Self-Custody Responsibility — You are fully responsible for managing your own funds, wallet security, and transaction approvals
- Smart Contract Risk — Vulnerabilities, network congestion, or oracle failures may impact execution or settlement
- Liquidation Risk — Leveraged positions can be liquidated in volatile conditions
- Slippage — Fast-moving markets can result in execution at prices different from expected
Before trading, carefully assess your risk tolerance, understand how the protocol works, and never trade with funds you cannot afford to lose.
What is leverage trading?
Leverage trading allows you to borrow funds to increase your trading position, amplifying potential profits (or losses). For example:
| Leverage | Price Move | P&L Impact |
|---|---|---|
| 1x | +1% | +1% |
| 5x | +1% | +5% |
| 10x | +1% | +10% |
| 20x | +1% | +20% |
⚠️ High Risk — Leverage amplifies both gains and losses. A 10x leveraged position with a 10% adverse price move would result in a 100% loss of your margin.
What is a liquidation?
Liquidation occurs when your leveraged position loses enough value that it can no longer cover the borrowed funds. The platform automatically closes your position to prevent further losses, often resulting in a loss of your initial margin.
To avoid liquidation:
- Use lower leverage
- Set stop-loss orders
- Monitor your positions regularly
- Maintain adequate margin buffer
What order types are available?
01 supports multiple order types:
| Order Type | Description |
|---|---|
| Market | Execute immediately at the best available price |
| Limit | Execute at a specified price or better |
| Post-Only | Guaranteed to add liquidity (maker order) |
| IOC | Immediate-or-Cancel — fill immediately or cancel unfilled portion |
| FOK | Fill-or-Kill — fill entirely or cancel completely |
What is funding rate?
Funding rates are periodic payments between long and short traders to keep perpetual contract prices aligned with the spot market. When funding is positive, longs pay shorts; when negative, shorts pay longs.
You can view current funding rates on the trading interface or via the market data API.