How to Trade on Twilight
Audience: New users exploring the Twilight Testnet Goal: Understand how trading works on Twilight and prepare to begin your journey as a trader or liquidity provider.
Trading on Twilight — A New Kind of Exchange
Trading on Twilight isn’t just about opening a position — it’s about participating in a Bitcoin-first, privacy-preserving perpetual exchange. Every trade interacts directly with the Twilight Pool, a shared liquidity layer backed by BTC collateral, where profits and losses settle automatically without revealing your position to anyone else.
Unlike conventional perpetual DEXs:
There is no AMM and no public order book.
Trades execute at the oracle spot price (currently Binance mid).
There are no interest costs — funding is used solely to balance exposure between longs and shorts.
All positions are encrypted using zkOS, ensuring your margin, leverage, and PnL remain private while the system stays publicly verifiable.
The Building Blocks of a Trade
Before you place your first trade, it helps to understand the main components of the Twilight trading system:
Collateral
All trades use SATS, a Bitcoin-denominated test asset. SATS represent BTC in the testnet environment and are distributed freely via faucet.
Twilight Pool
The shared BTC liquidity pool that acts as the counterparty to all trader positions. LPs deposit collateral; traders open leveraged long or short positions against it.
Privacy Layer (zkOS)
Ensures that individual trade data — such as margin, leverage, and PnL — remains encrypted on-chain while still verifiable by validators.
Funding Mechanism
An hourly funding rate based on position skew balances long and short exposure within the pool.
Settlement
Each trade is isolated, meaning losses cannot exceed your posted margin. Realized PnL flows back to your trading account when positions close.
Trading Flow Overview
Every trade on Twilight follows a simple and verifiable lifecycle:
Each position you open is:
Private: encrypted end-to-end using zkOS.
Independent: isolated margin ensures no cross-position contagion.
On-chain verifiable: settlements and pool accounting are confirmed at the block level.
Start Exploring
You’re now ready to begin your journey through the Twilight Testnet.
Follow these next steps to set up your environment and start trading:
Note: All activity on the Twilight Testnet uses test tokens (SATS) — they carry no real monetary value.
The goal is to familiarize yourself with the Twilight platform before the mainnet launch.
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