> For the complete documentation index, see [llms.txt](https://docs.covenant.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.covenant.finance/markets/market-types.md).

# Market types

A **market type** is a parametric template for a Covenant Market. It specifies the Neutral LTV, duration, price band, fees, and gates that together define how the market behaves under stress and at equilibrium. A single market type can be deployed against many Base Assets; for example, all major-crypto markets (BTC, ETH, MON) share the same 80/20 Wide template, while RWA-style yield-bearing collateral typically uses the 80/20 Concentrated template.

Four market types are currently in production. They span two design axes:

* **Leverage / buffer split (80/20 vs 50/50).** The senior / junior NAV split at Neutral LTV. 80/20 markets give 5x structural leverage to the junior tranche and an 8–10% loss buffer; 50/50 markets give 2x leverage and a 20% buffer.
* **Price band width (Wide vs Concentrated).** The AMM's operating range. Wide bands absorb base-asset price volatility but slip more on swaps; Concentrated bands concentrate liquidity around par for tight swaps but accommodate less collateral drawdown before stress gates engage.

## Comparison

| Market type                                                       | Neutral LTV | Structural leverage | Min / max price | Neutral rate | Min buffer | Best for                                                              |
| ----------------------------------------------------------------- | ----------- | ------------------- | --------------- | ------------ | ---------- | --------------------------------------------------------------------- |
| [80/20 Wide](/markets/market-types/80-20-wide.md)                 | 80%         | 5x                  | 0.37 / 1.02     | 4%           | 8%         | Volatile major crypto (BTC, ETH, MON, HYPE)                           |
| [80/20 Concentrated](/markets/market-types/80-20-concentrated.md) | 80%         | 5x                  | 0.97 / 1.00     | 4%           | 10%        | Yield-bearing low-volatility collateral (RWAs, stables, LST pairs)    |
| [50/50 Wide](/markets/market-types/50-50-wide.md)                 | 50%         | 2x                  | 0.80 / 1.07     | 4%           | 20%        | Volatile collateral with conservative leverage / new assets           |
| [50/50 Concentrated](/markets/market-types/50-50-concentrated.md) | 50%         | 2x                  | 0.96 / 1.01     | 4%           | 20%        | Moderately volatile collateral (LST/USD, equity indices, mezz credit) |

All four types share the same duration (`D = 3 month perpetual`) and currently charge no protocol fee on funding yield. Swap fees differ: 5 bps for 80/20 markets (deep liquidity around par), 30 bps for 50/50 markets (compensates junior LPs for the lower-leverage book).

See the [Glossary](/resources/glossary.md) for definitions of each parameter.