Phoenix Trade Lets Traders Use SOL as Collateral for Perpetuals

The Solana-based protocol Phoenix Trade has made it possible for traders to use SOL as direct collateral for perpetual contracts. This integration enables users to trade across more than 80 perpetual markets, including crypto, equities, and commodities, without needing stablecoins like USDC.

According to the technical team's report, the risk engine assigns an 80% collateral weight to SOL deposits compared to the 100% retained by USDC. This haircut is designed to absorb the token's intrinsic volatility without compromising the solvency of the on-chain order book.

The protocol has accumulated over $2.834 billion in cumulative derivatives volume and more than $75 billion on its original spot order book since its technical debut in 2023 with a spot order book that processed over $75 billion.

Market analysts surveyed by industry outlets suggest that supporting volatile collateral could drive higher daily trading volumes in the short term, but they caution that sharp declines in SOL's market price could trigger more frequent automated liquidations for highly leveraged accounts.