What is Perpetual Protocol

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About Perpetual Protocol

Key Points

  • Perpetual Protocol is a decentralized exchange (DEX) for futures on Ethereum and xDai.
  • Traders can go long or short with up to 10X leverage on various assets.
  • The platform utilizes a virtual automated market maker (vAMM) for on-chain liquidity.
  • The vision is to create the world’s best, most accessible, and most secure decentralized derivatives trading platform.

Founders and Investors

  • Founded by Yenfen Weng and Shao-Kang Lee, Taiwanese cryptocurrency entrepreneurs.
  • Backed by reputable investors, including Zee Prime Capital, Multiarrows Capital

Introducing Perpetual Protocol: A Revolutionary Trading Ecosystem

Introducing Perpetual Protocol (PERP): A Revolutionary DeFi Solution

Perpetual Protocol is a decentralized exchange (DEX) for futures, operating on both Ethereum and xDai. The platform empowers traders to take long or short positions with leverage of up to 10X on a diverse and expanding array of assets, including BTC, ETH, DOT, SNX, YFI, and others. Notably, trading on Perpetual Protocol is non-custodial, ensuring that traders maintain full control over their assets at all times, with all transactions executed on-chain. The protocol leverages a virtual automated market maker (vAMM), which provides on-chain liquidity with predictable pricing governed by constant product curves. Moreover, Perpetual Protocol’s vAMMs are deliberately designed to be market-neutral and fully collateralized, fostering a secure and reliable trading environment.

The Perpetual Protocol envisions a future where it establishes the world’s premier, most accessible, and secure decentralized derivatives trading platform. By building upon its DeFi projects and empowering other projects to build on its foundation, the company embodies the “DeFi money lego” philosophy. Having successfully achieved several milestones in its roadmap, including the launch of staking pools and the implementation of limit and stop-orders, Perpetual Protocol is poised to expand its reach to other chains, introduce leveraged tokens, and unveil dynamic liquidity in its pools.

The Visionaries Behind Perpetual Protocol: Meet the Founders

Perpetual Protocol was founded by Yenfen Weng and Shao-Kang Lee, two visionary Taiwanese entrepreneurs who had previously established payroll and accounting firms catering to crypto startups. The majority of the team is based in Taiwan. Notably, Perpetual Protocol has garnered the support of esteemed investors, including Zee Prime Capital, Multiarrows Capital, CMS Holdings, Binance Labs, and Alameda Research, a strategic partner of FTX. With the backing of these prominent investors, the company successfully closed a $1.8 million seed round led by Multicoin Capital in 2020.

Unveiling the Distinctive Attributes of Perpetual Protocol

The overarching objective of Perpetual Protocol is to establish a seamless and accessible perpetual contracts trading platform, where users can engage in trading activities with ease. To achieve this, it is essential to ensure that users can trade with optimal liquidity and minimal slippage. Perpetual Protocol addresses this challenge by leveraging its innovative vAMM solution. Notably, Perpetual Protocol diverges from the conventional order book model employed by centralized exchanges. Instead, traders interact with a virtual automated market maker, whose initial liquidity is strategically set by the operator.

For example, suppose the operator sets the vAMM’s liquidity at 100 vETH to 40,000 vDAI. If someone deposits DAI to go long on ETH, this would push the price of ETH upwards, thereby creating an incentive to go short on vETH if the price deviates from market prices. Conversely, traders going short on vETH would also deposit DAI as collateral, which would, in turn, bring the price of vETH back to its equilibrium. Notably, liquidity swaps are unnecessary, as the vAMM functions as a comprehensive ledger of all trades, automatically finding an equilibrium in the long run. In practice, all trades on Perpetual Protocol are settled in USDC.

Through the innovative vAMM model and the strategic deployment on xDai, traders can revel in the benefits of on-chain trading, completely free from fees and instantaneous settlement. Moreover, Perpetual Protocol offers a unique advantage, providing gas-free deposits exceeding 500 USDC, thereby enabling traders to deposit funds with zero ETH in their wallets.

What Is the Circulating Supply of Perpetual Protocol (PERP) Coins?

The total supply of PERP is capped at 150 million. The current circulating supply of PERP stands at 68.7 million. The token distribution is allocated as follows:

A 7.5% allocation is designated for the Balancer Liquidity Bootstrapping Pool (LBP), fostering a robust and dynamic market.

A 4.2% allocation is designated for seed investors, with 20% of the total amount being unlocked upon the mainnet launch, followed by a quarterly release of an additional 20% every three months.

Fifteen percent is allocated to strategic investors, with 20% unlocked upon mainnet launch, followed by an additional 20% released every three months.

A total of 21% is allocated to the team and advisors, with a vesting period of 2.1% every three months, commencing six months after the mainnet launch.

A substantial 54.8% allocation is designated for the ecosystem and rewards, with the distribution of ecosystem rewards to be determined by the Perpetual Protocol community.

PERP is a utility token that fosters and enables the decentralized governance of the protocol, thereby creating a self-reinforcing cycle. This token feedback loop unfolds as follows: Staking rewards and trading fee rewards increase, leading to a surge in the value of the PERP token. As a result, awareness of the PERP token grows, which in turn boosts awareness of the protocol. Consequently, trading volume increases, generating higher trading fees, and the cycle repeats itself.

The Perpetual Protocol Network’s Robust Security Framework

Perpetual Protocol has undergone rigorous audits by esteemed firms Consensys and Peckshield, ensuring the integrity of its infrastructure. As a community-governed platform, it also features a bounty program that incentivizes developers to identify and report bugs in its smart contracts. Notably, the network operates on xDai, while the PERP token is an ERC-20 token seamlessly integrated with the Ethereum blockchain.

ERC-20 is the token standard of choice for the majority of newly minted tokens when launching on the Ethereum blockchain. As one of the most popular blockchain platforms for decentralized autonomous organizations (DAOs), Ethereum relies on a proof-of-work consensus mechanism, which necessitates the mining of new Ether by miners. A network of decentralized nodes is responsible for validating transactions and ensuring the integrity of the Ethereum blockchain.

Perpetual Protocol leverages Chainlink as its oracle for funding rate calculations, yet deliberately omits an on-chain oracle as a price engine. This strategic design choice is intended to prevent the exploitation of flash loans to manipulate the prices of underlying assets, thereby precluding opportunistic profiteering within the same transaction.

Where to Acquire Perpetual Protocol (PERP): A Comprehensive Guide

PERP is listed on prominent cryptocurrency exchanges, including UniSwapV2, Binance, Kraken, and Gate.io, ensuring seamless accessibility for traders and investors alike.

Associated Resources:

Discover dYdX (DYDX), a prominent decentralized exchange that has garnered significant attention in the cryptocurrency landscape.

Discover Idex (IDEX), a pioneering decentralized exchange designed for seamless futures trading.

Delve into our in-depth exploration of decentralized liquidity pools.

Stay ahead of the curve with the latest cryptocurrency news and expert trading insights, courtesy of the CoinMarketCap blog.

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