@rf_extended

What multi-asset collateral unlocks for @extendedapp's roadmap: - Alongside multi-asset collateral, we have built spot trading infrastructure (all non-USDC liquidations already route through the native spot market), leveraged spot and a lending protocol. - As the next step, we will open spot trading to users and expand lending beyond the Extended ecosystem to support broader DeFi use cases. - Reasonably soon, we will multiply the number of crypto and TradFi markets available on Extended, while keeping liquidity and execution quality as top priorities and upgrading spot trading to support leverage. While multi-asset collateral is only one part of the broader vision, it is foundational to Extended’s goal of building one margin account across all markets: hundreds of crypto and TradFi perpetual markets, leveraged spot, an open lending protocol, yield products (XVS), and other trading products.

What's unique about Extended’s native money market. With multi-asset collateral now live, @extendedapp users can deposit ETH and wBTC (with USDT and EURC coming shortly) and use them as margin to trade perpetuals. When a user's USDC balance goes negative, borrowing is triggered automatically with the Extended Vault serving as the primary lender. The key difference is how borrowing rates work. Traditional crypto money markets typically operate through isolated lending pools, where interest rates depend only on utilisation of a specific pool. Collateral risk is managed separately through haircuts and borrowing limits. Extended's setup is fundamentally different. The Vault lends against multiple collateral assets simultaneously, while borrowing demand emerges dynamically from unrealised PnL. In this environment static global borrowing caps are not practical. As a result borrowing rates depend on two dimensions: - overall vault utilisation - utilisation against a specific collateral asset. This means borrowing USDC against ETH can be cheaper than borrowing against BTC if system-wide exposure to ETH is lower. The second layer is how borrowing is allocated. When a user has multiple collateral assets, the system automatically routes borrowing through the lowest-rate collateral first, minimising the effective cost of capital. Example: if a user has a negative USDC balance backed by both ETH and wBTC collateral, and ETH borrow rates are lower than BTC, the system will allocate borrowing against ETH first before routing the remainder against BTC, continuously reducing the effective cost of capital. The result is a system where: - users automatically receive the cheapest borrowing allocation across their collateral portfolio - Extended maintains granular risk control over exposure to different collateral assets backing borrowed USDC - vault depositors earn additional yield directly from trading activity.

From our conversations with TradFi brokers, it’s clear that moving to 24/7 is quickly becoming table stakes. To get there, most are looking at two routes: launching perps (either in-house or via partners) or extending CFDs to 24/7 and hedging the exposure externally. When discussing the second approach, hedging CFD exposure with perps (instead of futures, leveraged spot, etc.), two structural differences stand out: 1. Deterministic liquidation vs operational margining. In TradFi, margining is rule-based but involves operational processes and potential grace periods, while in perps liquidation is fully deterministic and continuous, ensuring individual account and system-wide solvency without credit assumptions. 2. Managing funding vs rollover / borrow costs. Perp funding is realized more frequently (hourly / 8-hour), and can be significantly more volatile as it reacts in real time to positioning imbalances, compared to the smoother, benchmark-driven cost of carry in futures and financing markets. None of those are blockers to a wider institutional adoption of perps, but rather observations on how traditional players are already adapting their ways of working to benefit from perps and DeFi.

In light of recent security incidents and the increasingly hostile environment, we have activated a dedicated treasury contract to further strengthen the system’s resilience. This contract is solely responsible for holding the entirety of the protocol’s treasury (TVL) and incorporates a circuit breaker mechanism governing fund outflows. Specifically, if the total value locked (TVL) decreases by more than 3% within any rolling 24-hour period, the treasury contract will automatically halt all USDC outflows. In such an event, settlements are paused until the team reviews the underlying transactions and explicitly approves any increase in withdrawal limits via a multisignature process. The multisig signers are distributed across multiple geographies. In rare circumstances, this may introduce delays to withdrawals. However, we believe this is a reasonable trade-off to ensure the safety of funds. The perpetuals and vault contracts, which handle trading and business logic, no longer custody funds. All asset movements are routed exclusively through the treasury contract. As a result, even in the event of a full system compromise, including bridges, oracle providers, or operator infrastructure, the maximum potential impact is limited to 3% of the TVL.

In light of recent security incidents in the space, we follow a strict set of principles in our approach to contract security: 1. No deployments without audits conducted by at least two independent external firms 2. Critical controls are governed by a multisig, with signers distributed across geographies 3. Circuit breakers are in place for certain operations to pause the contract For security reasons, we do not disclose implementation details of these mechanisms but safety of the user funds is the top priority for the team.