Frequently Asked Questions

• What is Heimata?
  Heimata is a perpetual futures AMM (“Automated Market Maker”) protocol in the Ethereum blockchain ecosystem that allows anyone to gain financial exposure to local real estate markets. Traditionally, only a relatively small group of investors have had access to one of the most powerful asset classes on earth – real estate - due to high barrier-to-entry, complexity, and headache. Heimata changes that.
• What is collateral?
  Collateral refers to the funds that a trader provides to secure a trading position. Liquidity Providers (or “LPs”) also contribute collateral to trading pools in order to ensure that the pools remain balanced and that there is sufficient liquidity for traders to enter and exit positions. The only collateral currently accepted on Heimata is USDC (US Dollar Coin), a stablecoin pegged to the US Dollar and backed by attested fiat reserves.
• What does it mean to be “long” or “short”?
  Being "long" means you have a position in which you profit if the price of the asset increases. In other words, you are betting that the price will go up. On the other hand, being "short" means you have a position in which you profit if the price of the asset decreases. In this case, you are betting that the price will go down. So, being "long" or "short" refers to your trading position and the direction you expect the price to move.
• How do traders make money?
  Traders make money on Heimata by taking positions that benefit from the price movements of real estate in available markets. If a trader correctly predicts that the price will increase, they can take a long position and profit from the price appreciation. Conversely, if they anticipate a price decrease, they can take a short position and benefit from the price decline. Traders earn profits by closing their positions at a favorable price compared to the price at which they entered the trade.
• How do Liquidity Providers make money?
  Liquidity Providers on Heimata can passively earn trading fees and pool impact fees. When users trade on the platform, they pay fees that are distributed to Liquidity Providers as a reward for providing liquidity to the different trading pools. Liquidity Providers can also earn from reinvested liquidation fees and the other side of net trader profit and loss (“PnL”) – though the goal is for each pool’s skew (long vs short interest) to be balanced so that LP funds are not as exposed to net trader PnL.
• Where does each city’s pricing come from?
  Heimata’s price feeds (the average cost per square foot of residential real estate in a given city) are generated off-chain in a decentralized manner using active listings in that market. This price data is then continuously brought on-chain using Chainlink oracles, providing up-to-date and accurate price information for trading activities.
• What is a funding rate?
  The funding rate is a dynamic rate used to calculate payments from the majority side of a trading pool to the minority side. Each pool has its own funding rate to ensure that majority traders are incentivized to close positions and potential minority traders are incentivized to open positions, thus encouraging balanced open interest within the pool.