Polynomial x Chainrisk: Building the Economic Risk Infrastructure for Perpetual Trading

In the competitive and complex world of on-chain derivatives, protocols are not just battling for users—they are constantly negotiating with volatility, liquidity fragmentation, and systemic leverage. Perpetual exchanges, by design, are highly capital-efficient but inherently fragile without a robust risk architecture. This is precisely where the partnership between Polynomial and Chainrisk begins.

Polynomial is a dedicated L2 derivatives chain with a native liquidity layer that powers both trading and staking. It offers gasless and fast trading with multi-collateral margin, smart execution, and deep liquidity. Users can also stake supported assets to earn yield, protocol incentives, and ecosystem rewards. Polynomial has joined forces with Chainrisk, a leading economic risk management and simulation company that builds dynamic, protocol-specific infrastructure to protect DeFi protocols under stress.

Together, they are aligning real-time trading execution with real-time economic safety—merging product innovation with deep systemic foresight.

Embedding Economic Intelligence Into a Perpetual Exchange

For a perpetual trading platform, risk management cannot be a reactive process—it must be an embedded, real-time system that continuously adapts to shifting market conditions, user behaviors, and protocol exposure.

Chainrisk brings to Polynomial a sophisticated simulation and risk analysis platform powered by agent-based modeling, historical stress testing, and live market data ingestion. This allows Polynomial to:

• Dynamically adjust parameters across its markets
• Pre-approve new assets or trading logic through predictive simulation
• Mitigate insolvency risks from cascading liquidations or skewed funding curves
• Increase trader confidence through transparent, data-driven safeguards

This isn't simply parameter tuning—it's transforming risk management from a one-time setup to a living, protocol-native process.

Dynamic Risk Parameters for a High-Throughput Exchange

Chainrisk’s methodology includes biweekly recommendations for spot, perpetual, multi-collateral, and liquidity pool parameters based on market activity and simulation outputs. These touch every layer of Polynomial’s market structure:

• ‍Perpetual Markets: Skew scale, funding rates, open interest caps, and margin ratios are modeled against high-volatility regimes and optimized for both trader experience and protocol safety.
• ‍Collateral Design: Chainrisk introduces detailed rules around max collateral per asset, leverage multipliers, and discount schedules for overexposed tokens.
• ‍Utilization and Fee Models: By simulating inventory usage and capital flow, Chainrisk helps Polynomial structure its fees (atomic, async, wrap) to be fair, defensible, and sustainable.‍
• Liquidation Circuit Breakers: Advanced mechanisms ensure large-scale liquidations are rate-limited to protect LPs and avoid systemic damage.

Each of these parameters is supported by rigorous simulation of live order flow, historical black swan scenarios, and user behavioral patterns.

Simulating Stress Before It Happens

A standout feature of the Chainrisk platform is its ability to simulate hypothetical events under adverse market conditions. This enables Polynomial to evaluate the impact of:

• Introducing a new collateral asset with low liquidity
• Adjusting leverage multipliers during volatile weeks
• Funding rate imbalances in highly directional markets
• Realistic user liquidations following sharp price declines

This forward-looking risk modeling allows the Polynomial team to not only avoid preventable failures but to move faster in launching new products—with risk constraints already validated.

A Unified Risk Dashboard for Visibility and Action

To support both the core team and its community of traders, Chainrisk is also delivering a real-time monitoring dashboard tailored to Polynomial. This dashboard includes:

• Protocol-level metrics on open interest, collateral ratios, position imbalances, and liquidation queues
• Individual trader health scores, margin usage, and projected risks under price movements
• Historical trade analysis to understand user behavior and optimize incentives
• Parameter flagging system to suggest when key risk metrics approach unsafe zones

This makes risk not just observable, but actionable—empowering both the protocol and its users with the data they need to make informed decisions.

Scaling Trading Volume With Resilience

A well-designed economic risk infrastructure is not just about protection—it’s about unlocking confident growth. By aligning Chainrisk’s risk services with Polynomial’s trading engine and incentive structures, the protocol can:

• Confidently scale trading volume while maintaining solvency
• Adjust leverage and caps in real-time based on dynamic market health
• Provide LPs with credible safety guarantees, increasing protocol depth
• Attract sophisticated traders by showcasing transparency in market mechanics

In a market where liquidity moves fast and trust erodes quickly, this alignment is not just a feature—it is a differentiator.

A Long-Term Infrastructure Partnership

This collaboration between Polynomial and Chainrisk is a long-term commitment to building economically sound, capital-efficient trading systems. Chainrisk will continue to serve as an embedded infrastructure partner—running simulations, stress-testing updates, and evolving the risk engine in tandem with Polynomial’s roadmap.

As perpetual trading matures, the platforms that succeed will be those that treat risk management as a first-class primitive, not a post-facto concern. With this partnership, Polynomial is positioning itself to lead that future.

For more information, visit:

Polynomial: https://polynomial.fi/

Chainrisk: https://www.chainrisk.xyz/

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