Most perpetual trading platforms in crypto focus on one thing: price. They let users speculate on where tokens like ETH or BTC are headed, offering leverage and liquidity for directional bets. What they don’t offer is a way to trade yield itself, rates, spreads, and income streams (staking, lending/borrowing) that drive long-term value in both traditional finance and DeFi.

Nunchi, an early access invite-only perpetuals DEX, takes a different approach. Instead of building another price-focused perp exchange, it introduces a framework for trading interest rates and yield-derived spreads directly. That means turning things like the U.S. Treasury yield or the staking discount of stETH into perpetual markets, allowing users to gain, hedge, or transfer yield exposure without touching the underlying assets.

What follows is a look at how Nunchi works, why it matters, and how it differs from the perpetual DEXs you already know.

What Do You Trade?

At the core of the platform are two types of contracts: yield perpetuals and basis perpetuals. Yield perps track an annualized rate, such as a T-Bill APY or a DeFi borrow rate. Longs receive that yield, shorts pay it. It’s a structure that mirrors a floating-versus-fixed interest rate swap. A trader longing a T-Bill perp might earn around 5 percent APY, without ever holding the bond. Someone shorting it effectively turns that floating yield into a fixed obligation. These contracts can be used for macro speculation or for treasury management, where stabilizing cash flow matters more than price exposure.

Basis perps, on the other hand, track the price ratio between a yield-bearing token and its base asset. In the case of stETH and ETH, that ratio reflects how much staking yield is priced into the token. Longing a basis perp is a bet that the discount will shrink. Shorting it allows someone who holds the token to lock in that discount and hedge against further depeg. If the short side actually holds stETH off-platform, they continue to earn staking rewards, while the perp’s funding flow offsets price risk. This kind of instrument is well-suited for LPs managing impermanent loss or for treasuries trying to protect principal without sacrificing income.

A Hybrid Engine and Segmented Liquidity Design

To support these contracts, Nunchi combines a limit order book with an automated market maker. Orders match on the central limit order book (CLOB) first. If there’s leftover size, it falls through to a binned AMM that allocates liquidity around the index price. The AMM submits proxy orders to the book rather than undercutting it, ensuring that order flow always routes through the best available pricing. During volatile periods, the platform can run a just-in-time auction to fill large trades, bringing in outside market makers to protect LP capital.

Liquidity is sourced from a multi-tranche vault split into junior, mezzanine, and senior layers. Junior capital, made up of stablecoins, absorbs daily trading PnL and earns the highest returns. Mezzanine capital consists of yield-bearing tokens like tokenized T-Bills, creating a stable funding base that continues earning interest. Senior capital is slower, deeper, and only tapped in rare, extreme cases. This structure allows risk to be distributed more thoughtfully, while keeping capital productive across all layers.

Pricing, Carry, and Yield-Aware Funding

Nunchi’s funding model is designed to reflect more than just price dislocation. Funding = premium + (r_base – r_quote), where r_base and r_quote represent the yields of the base and quote assets. A long in an stETH/ETH perp, for example, doesn’t receive staking rewards directly. So they pay that missing 3.5 percent to the short side, who is economically compensated as if they held stETH. This keeps the perp priced fairly and prevents it from drifting into premium territory. The funding rate is updated at high frequency—potentially every block—and adjusts for market imbalances in real time.

This mechanism isn’t just a pricing trick. It’s a way to continuously transfer yield between market participants based on their position and the underlying economics of the asset pair. As a result, traders are essentially trading rate differentials, not just price direction.

Collateral, Margining, and Risk Controls

Collateral is also yield-aware. Traders can post stablecoins (Tier-1), tokenized T-Bills and other yield-bearing stables (Tier-2), or even LP vault tokens and senior tranche assets (Tier-3). The system accounts for the income earned on these assets, which can offset funding costs on the other side of a trade. If a user posts mETH as collateral and shorts mETH/ETH, the protocol recognizes this as a near-hedged position and lowers margin requirements accordingly. This kind of cross-margining is rare in crypto, but essential in any system that deals in correlated rates.

Leverage is capped dynamically. Instead of offering flat leverage across all markets, Nunchi calculates limits using volatility caps (based on historical moves), liquidity caps (based on available backstop capital), and an overall hard ceiling of 50×. Some stable rate markets might allow very high leverage within these caps, but the dynamic checks prevent excessive risk accumulation while still allowing efficient capital use.

Liquidations are handled by a permissionless keeper network and designed to be partial. Rather than wiping out entire positions, the system trims only what’s necessary to restore margin. Combined with multiple layers of protection, insurance fund (funded by fees and liquidation penalties), tranches, and oracle sanity checks, Nunchi avoids the forced loss-sharing seen in other platforms when things go wrong.

A Clear Break from Traditional Perp DEXs

Nunchi isn’t just a variation on DYDX, Paradex or Hyerliquid, . It’s built for a different use case. GMX and others center on price volatility. Nunchi centers on yield exposure. Where Hyperliquid offers perps on ETH, BTC or memes, Nunchi offers markets on 3-month Treasury rates, funding spreads, and staking premiums. This lets users hedge rate risk or secure forward returns without holding the underlying assets.

Its architecture also departs meaningfully. GMX uses a pooled AMM. Hyperliquid is a high-performance Layer 1 with a fully on-chain order book and matching engine, offering sub-second latency and CEX-level throughput without off-chain components. Nunchi, by contrast, merges an on-chain order book with a binned AMM fallback and uses an order-first execution model. Liquidity is segmented, not monolithic. Its LP vault splits capital into junior (stablecoins), mezzanine (yield-bearing assets like tokenized T-Bills), and senior tranches, each with different risk exposure. Collateral is diverse and yield-bearing. Traders can post stablecoins, RWA-backed tokens like sDAI or OUSG, or tranche tokens from the vault, allowing margin to earn passive yield. Margining reflects portfolio risk, not just isolated trades. For example, a user who deposits mETH and shorts the mETH/ETH basis perp benefits from reduced margin requirements because the protocol recognizes the natural hedge. Nunchi also emphasizes metrics like interest streamed and open interest rather than raw trading volume, reflecting its focus on yield transfer rather than speculative churn.

The platform is tailored for DAOs, treasuries, LPs, and other capital allocators who think about rates rather than just price. A DAO might short a yield perp to lock in a fixed return on stablecoins. An LP might hedge basis risk while continuing to farm. This orientation toward persistent capital, not just speculative turnover, marks a fundamental shift in perp design.

A Platform for the Yield-Centric Future

Nunchi is building infrastructure for a part of DeFi that’s been largely overlooked. By unbundling yield into tradable components, rate and basis, it offers tools that mirror traditional fixed income markets. It enables perpetual exposure to interest rates, staking spreads, and funding premiums, with mechanisms designed around carry, not just price.

The platform doesn't aim to compete with traditional perp DEXs directly. It fills a gap that most have left untouched. If on-chain treasuries and DeFi-native institutions continue to mature, tools like Nunchi may become foundational. The real question is whether yield trading, not just price speculation, becomes the next frontier for crypto derivatives.