Price Impact
Overview
Price impact on ZO is a simulated spread that adjusts execution price based on open interest (OI) skew. It behaves like orderbook slippage: the more crowded one side (long or short), the worse execution gets for new trades on that side. It does not change the underlying oracle price; it applies a configurable spread on top of it at execution time.
Typically you can see the simulated spread for a market in the depth tab of the chart section:
Why it exists
Fairer execution — Trades that add to the crowded side get a worse price; trades that reduce skew can get a better effective price.
LP protection — Reduces adverse selection by making it more expensive to pile into the same direction when OI is already skewed.
Predictable caps — Spread is bounded by a configurable maximum (e.g. up to 10% total spread cap in the implementation).
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