Derivatives protocols allow users to trade with high leverage on the future price movements of assets, such as crypto, commodities, or forex, without requiring the trader to own the underlying physical asset. Utilizing either decentralized order books or shared liquidity pools (GLP/HLP models), these platforms support perpetual futures contracts and on-chain options, relying heavily on low-latency oracle networks to match longs against shorts. Because derivatives networks process massive notional volume and are fundamentally designed around transactions fee extraction (trading fees, liquidation penalties, and funding rates), they offer incredibly rich, programmable surfaces for CaaS.
Trading / Execution Fee Split
Definition. Derivatives platforms charge a flat or maker/taker percentage fee on every leveraged trade (both opening and closing) to compensate liquidity providers or the protocol treasury. A micro-percentage of this gross trading fee is programmatically redirected to a CaaS rail during the trade clearance settlement.
Value-stack tap. Execution Surface (trade clearance and fee accounting module).
Cost-bearer class. Project paid / User paid / LP-borne, surplus (subsidized from the protocol’s gross revenue or liquidity pool yield).
Example protocols. Hyperliquid, dYdX, Lighter xyz.
Liquidation Penalty / Clearance Surcharge
Definition. When a leveraged trader’s collateral falls below the strict maintenance margin, their position is forcibly liquidated by decentralized keeper bots. The protocol charges a harsh liquidation penalty to the defaulting trader. A percentage of this liquidation fee can be intercepted by the CaaS rail before the remainder is passed to the liquidator or the protocol’s insurance fund.
Value-stack tap. Execution Surface (liquidation engine / keeper bot smart contracts).
Cost-bearer class. User-borne (extracted directly from the defaulting trader’s remaining collateral buffer during forced liquidation).
Example protocols. Hyperliquid, dYdX, Lighter.
Protocol Fee Buyback Redirect
Definition. Some high volume Perp DEXs route a massive percentage (e.g., 97%) of all trading fees into an automated smart contract that continuously buys the protocol’s native token off the open market. A CaaS hook sits directly inside this automated routing logic, skimming a basis-point fraction of the aggregated stablecoin fees before they execute the open-market buyback, routing that fraction to public infrastructure.
Value-stack tap. Execution Surface / Smart Contract surface (fee aggregation and automated buyback router).
Cost-bearer class. Project paid, surplus (subsidized entirely from the protocol’s existing revenue/buyback allocation, leaving trader fees unchanged).
Example protocols. Hyperliquid (Assistance Fund model).
Value flow.
Insurance Fund Surplus Skim
Definition. Perpetual DEXs maintain heavy, capital-dense insurance funds to backstop bad debt and ensure winning traders are paid during market crashes. When the insurance fund generates native yield from idle stablecoins or exceeds its hard-coded safety threshold, a micro-percentage of this excess treasury surplus is continuously streamed to the CaaS rail.
Value-stack tap. Execution Surface / Smart Contract surface.
Cost-bearer class. Project paid, surplus (derived entirely from excess, unutilized protocol safety capital).
Example protocols. dYdX (Insurance fund).
Value flow.
Liquidity Pool Borrowing Fee Skim
Definition. In peer-to-pool perpetual DEXs (like GMX or Jupiter Perps), traders don’t just pay a flat trading fee; they pay a continuous, utilization-based “borrowing fee” for locking up the shared pool’s underlying assets for their leverage. A micro-percentage of the continuous, time-based borrowing fee paid by active traders is intercepted at the smart contract level before it is distributed as yield to the protocol’s liquidity providers.
Value-stack tap. Smart Contract Surface (pool utilization and borrowing fee accounting logic).
Cost-bearer class. LP-borne / Project paid, surplus (subsidized from the continuous yield generated by the liquidity pool).
Example protocols. GMX (v2), Jupiter Perps