Core Principles & Design Philosophy

use.com's architecture is guided by six foundational principles that inform every technical and operational decision. These principles distinguish use.com from promotional venues and position it as critical market infrastructure.

Principle 1: Transparency by Default

Philosophy: Operational data should be public by default, not proprietary by default.

Traditional exchanges treat risk formulas, insurance fund mechanics, and performance metrics as trade secrets. This opacity prevents independent verification and creates opportunities for discretionary intervention that may not align with user interests.

use.com inverts this model: all risk calculations, liquidation formulas, insurance fund balances, and performance metrics are published in real-time. Changes follow a governance process with public comment periods and version control.

Implementation:

• Risk Formulas: Published with version numbers (e.g., v1.2.0) and change logs

• Insurance Fund: Real-time dashboard showing balance, coverage ratio, inflows/outflows

• Performance Metrics: Public dashboards displaying latency (p50, p99), uptime, order success rate

• Burn Attestations: On-chain transaction hashes for every quarterly burn

Example: When use.com adjusts BTC maintenance margin from 0.5% to 0.6%, the change is:

1. Proposed with rationale (e.g., increased volatility)

2. Published for 7-day comment period

3. Reviewed by risk committee

4. Implemented with version increment (v1.2.0 → v1.3.0)

5. Historical versions archived for reference

Principle 2: Determinism Over Discretion

Philosophy: System behavior should be predictable and rule-based, not discretionary.

Discretionary systems create uncertainty and enable preferential treatment. use.com eliminates discretion wherever possible, replacing it with published rules and deterministic algorithms.

Implementation:

• Order Matching: Strict price-time priority with no hidden order types

• Liquidation: Published formulas with no manual intervention

• Risk Parameters: Algorithmic adjustments within governance-approved bounds

• Fee Structure: Transparent tiers with no negotiated rates

Example: Liquidation occurs automatically when mark price reaches the published liquidation price. There is no discretionary "grace period" or manual review—the system executes deterministically according to published rules.

Principle 3: Alignment Through Economics

Philosophy: Token value should correlate with platform success, not marketing spend.

Most exchange tokens suffer from misalignment: exchanges profit while token holders experience dilution. use.com aligns incentives through revenue-driven deflation.

Burn Formula: $Burn_t = \min\left(\frac{0.20 \times NetProfit_t}{VWAP_t}, CirculatingSupply_t\right)$

This creates a direct link: higher revenue → larger burns → reduced supply → increased scarcity.

Implementation:

• No Inflationary Emissions: Zero staking rewards or liquidity mining that dilute supply

• Hard Cap: 200M total supply (immutable)

• Predictable Unlocks: All vesting schedules published and immutable

• Utility Stack: Fee discounts, collateral benefits, governance rights

Example: If use.com generates $40M annual profit, it burns $8M worth of tokens. At $0.50/token, that's 16M tokens (8% of supply)—creating measurable deflationary pressure.

Principle 4: Security Through Redundancy

Philosophy: Eliminate single points of failure through layered redundancy.

Single points of failure have caused billions in losses. use.com implements defense-in-depth across custody, infrastructure, and operations.

Implementation:

• MPC + HSM: Key shares distributed across 5 locations, requiring 3-of-5 for signing

• Wallet Segregation: Hot (2-5%), warm (15-25%), cold (70-80%) with automated rebalancing

• Geographic Distribution: Infrastructure across multiple regions and cloud providers

• Dual Control: Sensitive operations require two independent approvals

Example: To compromise cold storage, an attacker would need:

1. Physical access to 3 of 5 geographic locations

2. Compromise of 3 separate HSMs

3. Compromise of 3 separate operators

4. Bypass of dual-control approval workflow

Probability: < 10⁻¹⁵ (effectively impossible)

Principle 5: Compliance as Architecture

Philosophy: Regulatory requirements should be integrated at the architectural level, not bolted on afterward.

Treating compliance as an afterthought creates operational risk and limits market access. use.com integrates compliance requirements into core architecture.

Implementation:

• Tiered KYC: 4 tiers with clear limits and product access

• Jurisdictional Gating: Products enabled/disabled based on licensing status

• Travel Rule: Automated IVMS101 data exchange for transfers > $1,000

• Audit Trails: Immutable logs of all compliance-relevant actions

Access Control Formula: $Access = License(Jurisdiction) \land Product\_Compliance \land User\_Tier \geq Required\_Tier$

Example: A user in Singapore with Tier 2 KYC can access perpetual futures because:

• use.com holds MAS license in Singapore ✓

• Perpetual futures are compliant in Singapore ✓

• User has completed Tier 2 KYC (required minimum) ✓

The same user cannot access options because use.com doesn't yet offer options in Singapore (licensing in progress).

Principle 6: Observable Performance

Philosophy: Performance claims should be verifiable through public metrics, not marketing assertions.

Many exchanges claim "high performance" without providing measurable evidence. use.com publishes real-time performance metrics enabling independent verification.

Implementation:

• Public Dashboards: Real-time latency, uptime, order success rate

• SLO Commitments: Published targets with historical compliance

• Incident Transparency: Public post-mortems for any SLO violations

• Third-Party Monitoring: Independent verification of published metrics

Published SLOs:

• Matching latency (p99): < 800 µs

• API latency (p99): < 15 ms globally

• Uptime: > 99.95% monthly (< 22 minutes downtime)

• Order success rate: > 99.99%

Example: During March 2024, use.com's dashboard shows:

• Matching latency (p99): 687 µs ✓ (target: < 800 µs)

• API latency (p99): 12.3 ms ✓ (target: < 15 ms)

• Uptime: 99.97% ✓ (target: > 99.95%)

• Order success rate: 99.994% ✓ (target: > 99.99%)

All targets met, with historical data available for verification.

Principle Integration

These six principles are not independent—they reinforce each other:

Transparency + Determinism: Published rules enable verification of deterministic execution

Determinism + Alignment: Predictable burns create reliable value accrual

Alignment + Security: Token value supports security investments

Security + Compliance: Secure operations ease regulatory approval

Compliance + Observable Performance: Audit trails support performance verification

Observable Performance + Transparency: Public metrics validate transparency claims

Measuring Adherence

use.com tracks adherence to these principles through quantitative metrics:

Principle	Metric	Target	Frequency
Transparency	Formula publication coverage	100%	Continuous
Determinism	Discretionary interventions	0	Monthly
Alignment	Burn execution timeliness	< 30 days	Quarterly
Security	Reserve ratio	> 105%	Daily
Compliance	Regulatory actions	0	Annual
Performance	SLO compliance	> 99%	Monthly

Conclusion

These six principles—Transparency by Default, Determinism Over Discretion, Alignment Through Economics, Security Through Redundancy, Compliance as Architecture, and Observable Performance—form the philosophical foundation of use.com.

They are not aspirational values but operational commitments backed by measurable metrics, published data, and verifiable proofs. By adhering to these principles, use.com aims to operate as critical market infrastructure rather than a promotional venue.

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Related Sections:

• Vision & Mission

• Risk Engine & Liquidation System

• Governance Framework