This article explains Quanto's unique PnL settlement system, where all profits, losses, and fees are realized in our native token, $QTO.
The $QTO Settlement System
At Quanto, our platform is deeply integrated with our native token, $QTO. A key aspect of this integration is that all trading profit and loss (PnL) and fees are settled directly in $QTO.
This means your cumulative trading performance on the platform is reflected in your account's $QTO balance. This system has several implications that you need to be aware of, including how to manage a negative $QTO balance and a unique risk associated with $QTO price fluctuations.
How $QTO Settlement Works
The process is straightforward:
When you close a trade for a profit: The realized profit is calculated and credited to your account in the equivalent amount of
$QTOtokens.When you close a trade for a loss: The realized loss is calculated and debited from your account's
$QTObalance.Trading Fees: All fees for trading activity are also debited from your
$QTObalance.
This means that your $QTO balance serves as a real-time ledger of your net trading results on Quanto.
Understanding a Negative $QTO Balance
It is possible and normal for your account to have a negative $QTO balance.
A negative balance simply represents the net amount of $QTO that you owe to the platform as a result of trading losses and/or fees. Think of it as a debt denominated in $QTO. While you are not required to settle this balance immediately, it is essential to manage it proactively.
How to Settle a Negative $QTO Balance
Quanto provides two flexible options to clear a negative $QTO balance at any time:
Deposit
$QTO: The most direct method. You can deposit$QTOfrom an external wallet to your Quanto account to cover the negative balance.Buy
$QTO: Use other assets in your account (e.g.,$USDC,$SOL) to buy the required amount of$QTOon our spot market or using the "Buy $QTO" tool. This will automatically settle your debt.
CRITICAL RISK: $QTO Price Fluctuations
This is the most important risk to understand about our settlement system.
When you have a negative $QTO balance, you are effectively "short" the $QTO token. This exposes you to risk from the price of $QTO itself.
Consider this scenario:
You have a balance of -100
$QTO.The price of
$QTOis currently $2. The USD value of your debt is $200.The price of
$QTOthen rises to $3. The USD value of your debt has now increased to $300.
This increase in your debt's value reduces your Available Collateral. If the price of $QTO rises significantly, the value of your debt could grow large enough to consume all your available margin, triggering a liquidation of your other collateral to ensure your account remains solvent.
A $QTO price rally can put your account at risk if you are holding a negative $QTO balance.
Best Practices for Management
Monitor Regularly: Always be aware of your
$QTObalance, visible in your Account overview.Manage Your Debt: Do not let a negative
$QTObalance grow unmanaged, especially in a rising market for$QTO.Settle Periodically: Consider settling your negative balance regularly to de-risk your account from
$QTOprice volatility.
Understanding this system is key to a safe and successful trading experience on Quanto. If you have any questions, please contact our support team.
Note on Position Sizes
The price of $QTO not only affects your PnL settlement but also dynamically adjusts your displayed position size. To learn more about this critical mechanic, please read our detailed guide: "How Position Size is Calculated on Quanto".