Perpetual Protocol PERP
About
What Is Perpetual Protocol (PERP)?
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 a growing number of assets like BTC, ETH, DOT, SNX, YFI and others. Trading is non-custodial, meaning traders always retain possession of their assets, and on-chain. Perpetual Protocol utilizes a virtual automated market maker (vAMM), which provides on-chain liquidity with predictable pricing set by constant product curves. Furthermore, Perpetual Protocol designed its vAMMs to be market-neutral and fully collateralized.
The declared vision of Perpetual Protocol is to create the world’s best, most accessible, and most secure decentralized derivatives trading platform. By building on our DeFi projects and allowing projects to build on Perpetual Protocol, the company embraces the “DeFi money lego” ethos. After hitting a number of milestones in its roadmap, such as launching staking pools and implementing limit and stop-orders, Perpetual Protocol plans to expand to other chains, introduce leveraged tokens, and launch dynamic liquidity in its pools.
Who Are the Founders of Perpetual Protocol?
Perpetual Protocol was launched by Yenfen Weng and Shao-Kang Lee, two Taiwanese cryptocurrency entrepreneurs that previously had launched payroll & accounting companies for crypto startups. Most of the team is based in Taiwan. Perpetual Protocol is backed by many highly reputable investors, such as Zee Prime Capital, Multiarrows Capital, CMS Holdings, Binance Labs and Alameda Research, a strategic partner of FTX. With their backing, the company closed a Multicoin Capital-led seed round for $1.8M in 2020.
What Makes Perpetual Protocol Unique?
The goal of Perpetual Protocol is to create a perpetual contracts trading platform that anyone can use. To do that, users need to be able to trade with good liquidity and low slippage. Perpetual Protocol solves this by employing its vAMM solution. Perpetual Protocol doesn’t follow the usual order book model of centralized exchanges. Instead, traders trade against a virtual automated market maker, whose initial liquidity is set by the operator.
For instance, assume the operator sets the vAMM’s liquidity at 100 vETH to 40,000 vDAI. Someone depositing DAI to go long on ETH would tilt the price of ETH upwards and create an incentive to go short on vETH if the price is out of line with market prices. Traders going short on vETH would also deposit DAI as collateral and bring the price of vETH back to its equilibrium. Having liquidity swaps is unnecessary, as the vAMM functions as a tally of all trades and automatically finds an equilibrium in the long run. In practice, trades on Perpetual Protocol are all settled in USDC.
By using this vAMM model and building the exchange on xDai, traders are able to enjoy on-chain trading without fees and instant settlement. Furthermore, Perpetual Protocol supports gas-free deposits over 500 USDC, meaning traders are able to deposit with 0 ETH in their wallets.
How Many Perpetual Protocol (PERP) Coins Are There in Circulation?
The total supply of PERP is 150 million. The current circulating supply of PERP is 68.7 million. The token distribution is as follows:
7.5 % - Balancer Liquidity Bootstrapping Pool (LBP)
4.2 % - Seed investors, 20% unlocked on mainnet launch, 20% every three months
15% - Strategic investors, 20% unlocked on mainnet launch, 20% every three months
21% - Team & advisors, 2.1% per 3-month period beginning six months after mainnet launch
54.8% - Ecosystem & rewards, distribution of ecosystem rewards will be decided by the Perpetual Protocol community
PERP is a utility token that incentivizes and facilitates the decentralized governance of the protocol. The token feedback loop looks like this: Staking rewards & trading fee rewards increase > 2. PERP token value increases > 3. PERP token awareness increases > 4. Protocol awareness increases > 5. Trading volume increases > 6. Trading fees increase > Back to 1.
How Is the Perpetual Protocol Network Secured?
Perpetual Protocol has been audited by Consensys and Peckshield. The protocol is community-governed and has a bounty program for developers that find bugs in the smart contracts. The network is on xDai, while the PERP token is an ERC-20 token on Ethereum.
ERC-20 is a token standard most new tokens follow when publishing on the Ethereum blockchain. Ethereum is one of the most popular blockchains for DAOs and is secured by a proof-of-work consensus mechanism that requires miners to mine new Ether. A set of decentralized nodes validates transactions and secures the Ethereum blockchain.
Perpetual Protocol uses Chainlink as oracle for funding rate calculations but does not have an on-chain oracle as a price engine to prevent the use of flash loans to manipulate the price of underlying assets and profit from Perpetual within the same transaction.
AI Analysis
What is the Perpetual Protocol (PERP) cryptocurrency good for? What are its main use cases?
Perpetual Protocol (PERP) is a decentralized finance (DeFi) platform that specializes in perpetual contracts, which are derivatives that allow traders to speculate on the price movements of assets without an expiration date. Here are some key features and use cases of PERP:
Decentralized Trading: PERP allows users to trade perpetual contracts on various cryptocurrencies in a decentralized manner, meaning there is no central authority controlling the trading platform. This promotes transparency and security.
Leverage Trading: Users can trade with leverage, giving them the ability to amplify their potential returns (as well as their risks). By using leverage, traders can open positions much larger than their initial capital.
Long and Short Positions: PERP enables traders to take both long (buy) and short (sell) positions, allowing them to profit from both upward and downward price movements of the underlying assets.
Liquidity Provision: Users can provide liquidity to the platform in exchange for rewards, which can incentivize participation and improve trading conditions on the platform.
Governance: Holders of PERP tokens can participate in the governance of the protocol. This includes voting on protocol upgrades, adjustments to fees, and other key decisions that shape the platform’s future.
Yield Farming: Users may also engage in yield farming by staking PERP tokens or providing liquidity, allowing them to earn additional tokens and rewards over time.
Risk Management: Traders can use perpetual contracts to hedge their cryptocurrency holdings or other investments against market volatility.
These use cases make PERP a versatile tool within the DeFi ecosystem, appealing to traders looking for advanced trading options, liquidity providers, and those interested in participating in governance and staking activities. As with any investment in cryptocurrency, users should be aware of the high risk involved and perform their own research before participating.
What blockchain does Perpetual Protocol use? Is it its own blockchain or built on top of another?
Perpetual Protocol operates on the Ethereum blockchain. It is not its own separate blockchain; instead, it utilizes Ethereum's infrastructure to facilitate decentralized trading of perpetual contracts. This allows it to leverage Ethereum's security and established ecosystem while also integrating with Layer 2 solutions like Optimism to enhance transaction speeds and reduce costs.
Is Perpetual Protocol programmable? Does it support smart contracts or decentralized applications?
Perpetual Protocol is a decentralized protocol designed for trading perpetual contracts, primarily on the Ethereum blockchain. While Perpetual Protocol itself is not a general-purpose smart contract platform like Ethereum or Solidity, it utilizes smart contracts to facilitate the trading of perpetual contracts.
The protocol enables users to engage in leveraged trading of various assets through automated market-making and uses liquidity pools to support trading activities.
However, if you're looking for a platform to build decentralized applications (dApps) or to create your own smart contracts, you would typically utilize platforms like Ethereum, Binance Smart Chain, or similar ecosystems rather than directly on Perpetual Protocol.
In summary, while Perpetual Protocol employs smart contracts to function, it is not a general platform for programmability or the development of decentralized applications.
How fast are Perpetual Protocol transactions? What is the typical confirmation time and throughput (transactions per second)?
As of my last update in October 2023, Perpetual Protocol is designed to facilitate fast and efficient trading for perpetual contracts. It operates primarily on the Ethereum blockchain and Layer 2 solutions such as Optimism to enhance speed and reduce costs.
Confirmation Time: The confirmation time for transactions on Perpetual Protocol largely depends on the underlying blockchain's performance. On Layer 2 (like Optimism), transactions can typically achieve confirmation times of a few seconds, much faster than on the Ethereum mainnet where confirmation times can range from several seconds to minutes, depending on network congestion.
Throughput: The throughput, or transactions per second (TPS), can vary based on the network conditions and the specific implementation of the protocol. On Layer 2 solutions like Optimism, the TPS can be significantly higher than on the Ethereum mainnet. Optimism can achieve theoretical throughput of thousands of transactions per second, while in practical usage, it may sustain hundreds of TPS under regular conditions.
For the most accurate and current metrics, including any updates or changes to the protocol's performance, it's recommended to check official Perpetual Protocol documentation, community updates, or analytics platforms that monitor DeFi protocols.
How much data can I store on the Perpetual Protocol blockchain? Does it support on-chain data storage?
Perpetual Protocol is primarily a decentralized trading platform built on Ethereum and utilizes layer-2 solutions for scalability and speed. Its main focus is on enabling perpetual contracts trading rather than serving as a general-purpose storage solution.
As for on-chain data storage, Ethereum and layer-2 solutions typically allow for some level of data storage within smart contracts. However, storing large amounts of data directly on the blockchain can be expensive due to gas fees and can lead to inefficiencies. Therefore, the amount of data you can practically store will depend on the gas costs associated with transactions and the specific contract design.
While it's technically possible to store data using smart contracts, it’s usually recommended to use off-chain storage solutions (like IPFS or centralized databases) for larger datasets and only store essential data or hashes on-chain to maintain integrity and verifiability.
In summary, while Perpetual Protocol can technically support some on-chain data storage, its primary function is not designed for extensive data storage, and users typically opt for off-chain solutions for larger data needs.
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