Key Concepts

Buy Now, Pay Later Trading

Unlike traditional perps where you post collateral and face liquidation, EXNIHILO positions only require the fees to open. You pay USDC to open a position and receive an NFT. When you close in profit, you get back USDC — depending on price movement.

There is no margin, no funding rate, and no liquidation engine.

Three-Curve AMM

Every EXNIHILO pool runs three constant-product curves simultaneously:

Curve	X Reserve	Y Reserve	Used For
SWAP-1	backedAirToken	backedAirUsd	Normal token swaps
SWAP-2	backedAirToken	airUsd.totalSupply()	Open long / close short
SWAP-3	airToken.totalSupply()	backedAirUsd	Open short / close long

All three use the standard x * y = k formula. The key insight: backed reserves track real collateral, while totalSupply includes synthetic (unbacked) mints. This divergence is what creates leveraged price exposure.

Synthetic Minting

When you open a long, the protocol mints synthetic airUsd (not backed by real USDC). This inflates airUsd.totalSupply() without changing backedAirUsd.

When you open a short, synthetic airToken is minted instead, inflating airToken.totalSupply().

These synthetic tokens are burned when the position is closed, restoring the supply ratio.

Backed vs Total Supply

• backedAirToken / backedAirUsd — Real collateral deposited by LPs and swappers. Always ≤ totalSupply.
• totalSupply — Backed tokens + synthetic tokens from open positions.

The ratio between backed and total supply determines how much leverage exists in the system.

Position NFTs

Every position (long or short) is an ERC-721 token. The NFT custodies the locked wrapper tokens for the position's lifetime. This means:

• Positions are transferable and tradeable
• Collateral is safely isolated from the pool
• On-chain SVG metadata shows live P&L

Single-LP Model

Each pool has exactly one liquidity provider, identified by an LP NFT. The LP earns swap fees passively and collects a 3% fee on every position opened. Transferring the LP NFT transfers all LP rights.