Parcl V3 Exchange upgrades to proportional P&L realization and restricts position flipping on Sep 22, 2025. Enhances trading, control, and safety. Audit starts Sep 8. Prepare strategies now. Follow our Discord and X for updates.
Important Update: P&L Realization Changes
These changes will go live on September 22nd, 2025.
We're providing advance notice to ensure all traders understand the current system and how it will change with our upcoming smart contract upgrade.
Key Dates:
September 8th, 2025: Smart contracts enter audit phase
September 22nd, 2025: Changes go live on mainnet
Two-week window: Prepare your trading strategies and position management
What's Changing:
P&L Realization: Moving from full realization to proportional realization
Position Flipping: Will be restricted at the smart contract level
Existing Positions: Will be subject to new rules when modified or closed
No Action Required: Your current positions and P&L will remain unchanged
Audit Status:
These changes are entering audit on September 8th, 2025 with our security partners. This comprehensive audit will ensure the safety and reliability of the new P&L realization system before deployment.
Important Note: If the audit takes longer than expected or requires changes based on audit findings, the go-live date may be adjusted. We will communicate any timeline changes immediately. However, all traders should be prepared for the September 22nd, 2025 target date as we expect a quick turnaround on the audit.
Introduction
We're updating the Parcl V3 Exchange's profit and loss (P&L) realization mechanism and position management system. This blog post explains how the current system works, what's changing, and why we're making these updates.
Current P&L Realization System
How It Works Today
Currently, Parcl V3 uses a full P&L realization model where every position modification realizes P&L in full, regardless of the size of the modification. Here's how it works:
Key Characteristics:
Full Realization on Every Trade: Whether you're adding to a position, reducing it, or closing it entirely, all accumulated P&L is realized immediately
Position Reset: After P&L realization, the position gets a new entry price and funding rate based on the current market
No P&L Accumulation: Positions never carry forward unrealized P&L between trades after a modifcation
Example: Current System
Let's say you have a long position of 100 SqFt at an entry price of $100, and the current price is $120:
Scenario 1: Adding 50 More SqFt
Current System: Realizes $2,000 P&L (100 SqFt × $20) immediately
New Position: 150 SqFt at $120 (new entry price)
Result: All previous P&L is crystallized, new position starts fresh
Scenario 2: Reducing by 50 SqFt
Current System: Realizes $2,000 P&L (100 SqFt × $20) immediately
New Position: 50 SqFt at $120 (new entry price)
Result: All P&L realized, remaining position starts fresh
New Proportional P&L Realization System
What's Changing
We're transitioning to a proportional P&L realization model that provides more intuitive position management:
Key Changes:
Weighted Average Pricing: Position increases update the weighted average entry price
Proportional Realization: P&L is only realized proportionally when positions are reduced or closed
P&L Accumulation: Unrealized P&L accumulates within positions until explicitly realized
No Position Flipping: Users must fully close positions before taking opposite direction
How the New System Works
Position Increases:
No P&L realization occurs
Weighted average entry price is recalculated
Funding rates are updated to reflect new position size
Unrealized P&L continues to accumulate
Position Decreases:
P&L is realized proportionally to the amount being closed
Remaining position keeps its original entry price and funding rate
Only the closed portion's P&L is crystallized
Example: New System
Using the same scenario (100 SqFt long at $100, current price $120):
Scenario 1: Adding 50 More SqFt
New System: No P&L realization
New Position: 150 SqFt with weighted average entry price of $106.67
Unrealized P&L: $2,000 continues to accumulate
Result: Position grows, P&L remains unrealized
Scenario 2: Reducing by 50 SqFt
New System: Realizes $1,000 P&L (50 SqFt × $20)
Remaining Position: 50 SqFt at original $100 entry price
Unrealized P&L: $1,000 remains unrealized
Result: Partial P&L realization, remaining position unchanged
Position Flipping Restriction
Current Behavior
Currently, users can flip positions directly:
Long 100 SqFt → Sell 150 SqFt = 50 SqFt short
All P&L is realized, new short position starts fresh
New Restriction
Smart Contract Enforcement:
Users must fully close their current position before taking the opposite direction
Attempting to flip positions will be blocked at the smart contract level
This prevents accidental position reversals and ensures intentional position management
Example:
Current: Long 100 SqFt → Sell 150 SqFt = 50 SqFt short ✅
New: Long 100 SqFt → Sell 150 SqFt = ❌ Transaction Rejected
New: Long 100 SqFt → Sell 100 SqFt → Sell 50 SqFt = 50 SqFt short ✅
Why We're Making These Changes
1. More Intuitive Trading Experience
Current System:
Adding to positions realizes all accumulated P&L
Position entry prices reset with every trade
P&L realization happens regardless of position management intent
New System:
P&L realization only occurs when reducing or closing positions
Position entry prices persist across additions
More predictable P&L behavior
2. Better Position Management
Current System:
Every trade resets position entry prices and metrics
Difficult to maintain position sizing strategies
P&L realization may interfere with trading plans
New System:
Position entry prices and metrics persist across additions
Easier to implement scaling strategies like dollar cost averaging
P&L realization only when intended
3. More Control Over P&L Realization
Current System:
P&L is realized on every position modification
Less control over when P&L is crystallized
New System:
P&L realization only when positions are reduced
More control over when P&L is realized
4. Position Flipping Restriction
Current System:
Users can flip positions directly (long to short in one trade)
May lead to accidental position reversals
Complex position state management
New System:
Users must close positions before taking opposite direction
More intentional position management
Clearer position direction at all times
Technical Implementation
Backward Compatibility
Implementation Strategy:
Existing positions will be subject to new rules when modified or closed
No impact on current P&L or position values
New rules apply to all position modifications after deployment
Timeline and Rollout
Security Audit 🔄 CURRENT PHASE
🔄 Smart contracts entering audit on September 8th, 2025
🔄 Comprehensive security review with audit partners
🔄 Timeline may adjust based on audit findings
Smart Contract Upgrade 🗓️ September 22nd, 2025
🗓️ Smart contract upgrade on September 22nd, 2025
🗓️ New rules apply to all position modifications
Two-Week Preparation Period
Target: September 22nd, 2025
During this preparation window, we encourage all traders to:
Review the changes outlined in this blog post
Understand how the new P&L realization system works
Prepare for the position flipping restrictions
Impact on Traders
What Stays the Same
Position P&L calculation accuracy
Funding rate mechanics
Liquidation processes
Market settlement functionality
What Changes
P&L realization timing and amount
Position management workflow
Position flipping restrictions
What Improves
More intuitive trading experience
Better position tracking
Reduced trading costs
Enhanced safety features
Conclusion
These updates improve the trading experience on Parcl V3 by implementing a more intuitive proportional P&L realization system and adding position flipping restrictions. The changes provide traders with more control over their position management and reduce the potential for trading errors.
Preparation for the Changes
Remember: These changes go live on September 22nd, 2025.
What You Should Do Now:
Review this blog post thoroughly to understand the changes
Plan your trading strategy for the new system
Join our Discord for real-time updates and community discussion
Follow our X Account for official announcements
We're committed to transparency throughout this process and will provide regular updates as we approach the September 22nd, 2025 deployment date.
For questions or feedback about these changes, please reach out to our support team or join the discussion in our Discord community.
