> For the complete documentation index, see [llms.txt](https://docs.extended.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.extended.exchange/about-extended/technical-architecture.md). # Technical Architecture For information only. Eligibility and jurisdictional restrictions apply. Trading involves risk of total loss. See the Terms, Risk Statement and Restricted Countries. #### Overview of Extended Architecture Extended is a perpetuals exchange that settles on Arc, the Layer 1 blockchain developed by Circle. All user funds are fully self-custodied in on-chain smart contracts. The protocol is designed to be trust-minimised by enforcing trading logic, transaction validation, and key components of the risk engine directly on-chain. All transactions are validated and settled on Arc, ensuring transparent and verifiable state transitions. Extended's smart contracts are open source and verified on the [Arc explorer](https://explorer.arc.io/address/0x4445AACaCC2dE174B77b37Eb27529ce0B36bC580). Extended is among the few perpetual DEXs with fully verifiable on-chain infrastructure. At the protocol level, every transaction involving collateral movement, including trades, funding payments, transfers, liquidations, and ADLs, triggers a full on-chain health check. This ensures that all participating accounts remain solvent or become more solvent as a result of the transaction, with system solvency continuously enforced on-chain. Extended also applies a comprehensive set of on-chain fairness checks across all transaction types: * Trades must respect user-defined price constraints and cannot be executed at a price worse than the specified limit * Funding payments are subject to on-chain limits on maximum funding rates per period * Liquidations are permitted only when a user’s Total Value, or equity, falls below their Total Risk, or maintenance margin, based on external oracle prices * Liquidations are triggered using independent external oracle mark prices, ensuring impartiality in the liquidation process * Each liquidation must improve the user’s Total Value to Total Risk ratio, otherwise the transaction is rejected * Accounts remain protected from ADL as long as their Total Value remains above zero All state transitions are verified through zero-knowledge proofs, ensuring the integrity and correctness of the system. ### Performance and Execution Quality Extended delivers competitive performance, with end-to-end latency and throughput comparable to leading trading venues, enabling reliable execution even under high market activity.

Latency benchmarks

### Rationale for Settling on Arc The selection of Arc as the settlement layer is based on three key considerations: **Finality** Arc reaches deterministic finality in [under a second](https://docs.arc.io/arc-chain). Once Extended settles a batch on Arc, it is final, with no need to wait for block confirmations. **Native USDC** USDC is both Extended's base collateral and Arc's native gas token. Network fees are paid in USDC, so costs stay stable and predictable. **EVM compatibility** Arc is EVM-compatible, so standard wallets and developer tooling work with Extended without a separate account system.