Tech

Functor is a layer-1 blockchain built for trading

The chain has three parts. FunctorCore runs the exchange: order books, margin, funding and liquidations. Consensus orders blocks, and a bridge moves USDC in and out.

Status Roadmap

Architecture

01 · Built

FunctorCore

The exchange state machine, written in Rust. It covers order books, margin, funding, liquidations, the launch market and the FCTR ledger. All arithmetic is in integers, so every validator computes the same result.

02 · Planned

Consensus

Byzantine fault tolerant consensus using Malachite, a Rust implementation of Tendermint. The public testnet starts with four validators. Staking opens validation to FCTR holders at genesis.

03 · Planned

Bridge

USDC deposits and withdrawals through Arbitrum. Validators sign withdrawals, and each withdrawal has a dispute period. No admin key can move bridged funds.

Market launches

A new market opens with a call auction. Orders must be fully funded, and all matched orders fill at a single price. Arrival time does not affect priority, so bots and split wallets gain nothing.

The opening auction ends at a random time. Orders cannot be cancelled in the final phase.
For the first days, each block clears as one batch at one price.
A collar limits how far the price can move in each batch.
In continuous trading, prices cannot print outside a moving band. If demand pushes through the band, the market pauses and reopens with an auction.
Holders can always sell their full balance.

Options and risk

The options engine is based on the founder's research at the University of Oxford's Department of Computer Science: a compositional, category-theoretic library for pricing derivatives. Structures are built from simple contracts, and the maximum loss of each structure is computed exactly.

Pricing models include clustered price jumps (a Hawkes process). For deep out-of-the-money puts, Black-Scholes can misprice by a factor of ten.
Options are fully collateralized. Each position locks its maximum loss, so options are never liquidated.
Perpetuals have a withdrawal rule, open interest caps, a limit on open interest growth, a maximum order size and an oracle price band.
Planned: margin requirements that increase with jump risk, and auto-deleveraging that leaves hedged positions alone.

Status

Each module has scenario tests, property tests on randomly generated cases, and mutation tests.

Module	Scope	Status
Order book	Price-time priority; limit, IOC and post-only orders; self-trade prevention	Built and tested
Clearinghouse	Accounts, margin and fees. Liquidations go to the order book first, then the liquidity vault, then auto-deleveraging	Built and tested
Perpetual risk limits	Withdrawal rule, open interest caps and growth limit, maximum order size, oracle band	Built and tested
Launch market	Opening auction, batch auctions, collar, price bands, halts	Built and tested
FCTR ledger	Fixed supply, founder vesting, protocol accounts	Built and tested
Funding	Paid hourly using the standard perpetual funding formula, settled at the oracle price	Built and tested
Oracle and mark price	Validator price submissions and mark price	Next
Vaults, node, app, testnet	See the roadmap	Planned

97 chain tests pass as of 19 Sep 2026. The node will be open source from the public testnet onward.

Comparison

Comparison with Hyperliquid

	Hyperliquid (today)	Functor (planned)
Layer-1 with an onchain order book	Yes	Yes
Community liquidity vault	Yes (HLP)	Yes, split by risk tier
No VC allocation; fees buy back the token	Yes	Yes
Vanilla options	No. Outcome contracts only (HIP-4)	Yes
Auction to open new markets	No	Yes
Node software	Closed source (source)	Open source
Liquidity and users	Established	None yet. Functor is pre-testnet