How Does Extended Work?
Extended is a perpetual futures DEX on Starknet built by a former Revolut team, offering crypto and TradFi asset perpetuals with cross-asset collateral and up to 100x leverage across 50+ markets. It is currently #1 on Starknet by TVL with $194M+ and has processed $100B+ in total volume. No exploits or security incidents since its August 2025 mainnet launch.
TVL
$161M
Sector
Derivatives
Risk Grade
B-
Value Grade
D+
Core Mechanisms
4.1.5
NovelPerpetual futures with cross-asset unified margin on Starknet
Embeds margining and liquidation logic directly into the Starknet base layer rather than application-level smart contracts. Hybrid CLOB with off-chain matching (<10ms) and on-chain settlement.
4.4.1
On-chain orderbook for perps with up to 100x leverage across 50+ markets
Central limit orderbook model. Supports EVM-compatible wallets (MetaMask, WalletConnect) without requiring Starknet bridge. 24-hour volume has reached $1.6B+.
6.1.3
Cross-collateralized unified margin across crypto and TradFi assets
Users can use any supported asset as collateral for any position
6.3.2
Fixed-spread liquidation engine for cross-margin positions
Standard liquidation mechanics adapted for unified margin
7.3.1
Points-based Season 1 program with trading and LP rewards
Standard points-to-token conversion with weekly distribution
Insurance > Protocol Insurance Fund
Extended maintains an insurance fund to backstop liquidation shortfalls across unified margin accounts
Fund absorbs losses when liquidation engine cannot close positions at breakeven; depletes during volatile conditions
How the Pieces Interact
A flash crash in one asset class triggers liquidations that cascade across all collateral types in a user's unified margin account, potentially causing forced selling of unrelated positions.
Starknet sequencer downtime during volatile markets could prevent order placement and liquidation execution, leading to bad debt accumulation and socialized losses.
TradFi assets trade on different schedules than crypto. Oracle staleness during off-hours could enable price manipulation or delayed liquidations.
Wash trading to farm points inflates volume metrics and may create artificial liquidity that disappears when incentives end.
Insurance fund depletion during extreme volatility leads to socialized losses across all cross-margin accounts, creating contagion from one asset class to another
What Could Go Wrong
- Built on Starknet with unified margin logic embedded in the base layer, creating deep coupling between the exchange and the underlying chain. Any Starknet sequencer downtime or censorship could halt all trading and liquidations.
- Cross-asset collateral and unified margin mean a severe price dislocation in one asset class (e.g., TradFi perps) could cascade into liquidations across all user positions, including crypto holdings.
- Relatively new protocol (mainnet August 2025) with limited track record through extreme market conditions. The unified margin system has not been stress-tested through a major market crash.
- Oracle dependency for both crypto and TradFi asset pricing creates a broad attack surface, particularly for less liquid TradFi instruments where price manipulation may be easier.
Starknet Sequencer Outage During Flash Crash
ModerateTrigger: Starknet sequencer goes offline for 30+ minutes during a period when BTC drops more than 15% in an hour, preventing liquidations from executing
- 1.Starknet sequencer halts during extreme market volatility — All Extended trading, including liquidations, stops entirely as order execution depends on sequencer
- 2.Highly leveraged positions (up to 100x) go deeply underwater without liquidation — Bad debt accumulates rapidly as positions move far past liquidation thresholds
- 3.Sequencer resumes and pending liquidations execute simultaneously — Cascade of liquidations hits thin orderbook, causing further price dislocation on the platform
- 4.Insurance fund is insufficient to cover accumulated bad debt — Remaining solvent users face socialized losses, potentially 5-15% of deposited collateral
Risk Profile at a Glance
Overall: B- (33/100)
Lower score = safer