How Does Nado Spot Work?

Off-chain CLOB sequencer with 5-15ms matching, batched on-chain settlement on Ink L2

Nado runs a high-performance off-chain sequencer that matches bids and asks in 5-15ms and then settles trades in batches on-chain. Sequencer cannot steal funds because settlement requires on-chain verification, but sequencer liveness is critical.

Cross-margin account spanning spot, perps, and money markets with dynamic margin offsets

Single collateral pool backs all positions across spot and perps. Portfolio-level risk engine recognizes hedges (e.g., basis trades) and dynamically adjusts margin requirements, offering more leverage for hedged positions.

Perpetual futures with funding rate mechanism on CLOB

Standard perpetual futures with periodic funding rates. Trading on CLOB rather than AMM provides tighter spreads. Over $5B in volume processed during private alpha.

NLP (Nado Liquidity Provider) vault for passive market-making yield

NLP vault deploys capital across sub-vault strategies to provide liquidity to the orderbook. Passive LPs earn yield from trading fees and market-making spreads.

Ink L2 on-chain settlement with verification of sequencer batches

All trades settle on Ink (Optimism Superchain L2 by Kraken). On-chain risk engine verifies sequencer output, preventing manipulation of trade execution.

Portfolio-level liquidation with maintenance margin computed at account level

Liquidation engine operates at portfolio level rather than per-position, reducing unnecessary liquidations for hedged accounts but concentrating risk for concentrated positions.

If the sequencer goes offline or is censored, all trading halts. Users can only withdraw via on-chain fallback, but open positions cannot be managed until sequencer resumes, potentially causing unhedged exposure during volatile markets.

A sudden move in one asset class (e.g., perps) can trigger cascade liquidation across all positions in the unified margin account, including spot holdings that would otherwise be safe in isolation.

NLP vault losses from adverse market-making conditions could trigger withdrawals, reducing orderbook depth and widening spreads in a self-reinforcing liquidity drain.

L2 congestion or Ink network issues could delay settlement batches, creating a window where off-chain state diverges from on-chain reality, potentially enabling exploitation.