What is Perpetual Protocol (PERP)?
Perpetual Protocol (PERP) is a decentralized protocol for trading perpetual contracts for any asset from cryptocurrency, fiat or gold or crude oil, ...
What sets the protocol apart is the use of virtual automation market makers (vAMM). This is an iteration of the automatic market maker (AMM) approach common in the DeFi ecosystem that you often know about.
Problems resolved by the Perpetual Protocol
Popular derivative products include future contract and perpetual contract.
Perpetual contracts copy many features of the future contract but lack a fixed shelf life. So absorption has slowed down due, among things like counterparty risks and fees.
Meanwhile, Decentralized Finance (DeFi) has eliminated the associated risks of trading derivatives on a centralized platform (CEX exchange). However, the approach used by Uniswap, Balancer and other DeFi networks to power the DeFi ecosystem is not ideal for handling perpetual contracts. Therefore, Perpetual Protocol has narrowed the gap with a new market making model. That is vAMM.
How does the Perpetual Protocol solve the problem?
To find out what is special about the project, let's compare AMM and vAMM.
A system using the AMM model uses liquidity pools directly. Whereas a vAMM introduces virtual pools, in which the money, instead of a pool, is kept in a smart contract.
Contract handling collateral support. Hence, liquidity on vAMM-inspired platforms like Perpetual can be algorithmically proven. AMM-based protocols such as Balancer and Uniswap forecast the strength of the market through Liquidity Providers.
vAMM provides advantages such as always-existing liquidity, predictable price, and fully collateralized contract. With enough collateral, traders always get their fair share of the settlement process. Notably, the combination of these features will eliminate the risk of impermanent loss that investors have to bear in case of AMM.
In addition to guaranteed liquidity and eliminating impermanent loss for investors, the Perpetual network allows traders to trade their positions with up to 20X leverage.
How Perpetual Protocol works
- Step 1: Trader sends money to Clearing House and provides more information about leverage amount.
- Step 2: Clearing House sends money to Vault. In addition, house makes changes to the platform's vAMM to indicate deposit, leverage, as well as to determine whether it's a long or short position.
- Step 3: Constant-product curve calculates the amount credited to the trader.
- Step 4: The trader can then close the position at will. Note that the network works on a win-lose basis, in one transaction, one person has to lose while the other gains.
What is PERP Token?
PERP is Perpetual Protocol's native ERC-20 token, powering the whole system in two ways: governance and staking.
|Token Standard||Native token|
|Total Supply||150.000.000 PERP|
|Circulation supply||20.551.250 PERP|
Token issuance schedule
- Balancer LBP: Not locked.
- Team & Advisor: Team starts vesting their token 6 months after the mannet launch and quarterly for the next 30 months.
- Seed & Strategic Investors: Start their token vesting as soon as Balancer LBP ends (25%), then quarterly for the next 12 months.
- Ecosystem and Rewards: Before going into community governance, 10% of these PERP tokens are unlocked. After the transition of community governance, all of them are unlocked.
PERP Token Sale
- Seed Round: Binance Labs invested in the project around 2018, detailed pricing information was not disclosed.
- Strategic investors or private sale: Take place in May for $ 5 / PERP.
- Public sale: Take place in September on Balancer for $ 9 / PERP
What are PERP tokens used for?
The PERP Holder can lock, or stake, the PERP they own for a fixed period of time for the Staking pool. In return, stakers are rewarded with staking incentives, including a PERP staking reward and a 50% network transaction fee in USDT (the remaining 50% goes to the Insurance Fund).
Once PERP holders have staked, they can use their staked PERP to vote or propose new ideas that can be used to improve the protocol.
It should be noted that before PERP is widely distributed, Core Protocol Contributor will be key decision-makers. This was on purpose, as the project thought it was important to keep governance agile in the early days of the protocol.
What exchange is PERP coin traded?
The wallet stores the PERP token
This is an ERC-20 token so it's pretty easy to find a suitable wallet for example: Trustwallet, Ledger Nano X, MyEtherWallet, Dappradar.. Or you can store it directly on an exchange, where you bought that token. Remember to turn on full security.
The Future of Perpetual Protocol (PERP)
Trading on futures has not attracted much attention in the DeFi world compared to spot trading. However, Perpetual Protocol adds momentum to the DeFi perpetual market through a single network endorsed by leading companies such as Binance Labs, Alameda Research and Three Arrows Capital.
Furthermore, the system's use of vAMM has been shown to provide more benefits to traders than AMM. With Community members, the network ensures new features are demand-based. Additionally, use of xDAI minimizes transaction costs while increasing the speed of the platform.
Perpetual Protocol has officially launched on the mainnet since December 14. Upcoming will include:
- Quarter 1 of 2021: Transaction Mining, Stats dashboard (ecosystem), Staking Pool, Trading interface redesign
- Planning: Keeper Bots (open source), xDai Native UI, Limit, Stop Orders, Mobile UI (eg for use with Metamask Mobile)
Potential assessment of Perpetual protocol and PERP copper
- 20x Leverage On-Chain Perpetual Contact: Traders can trade with leverage up to 20X long or short, with transparent fees and 24/7 liquidity guaranteed.
- Liquidity is guaranteed by vAMM: All content can be supported through perpetual contract on Perpetual Protocol. Whether it's gold, fiat, BTC, BCH, ETH,…. What the Perpetual protocol requires is the pricing for the underlying asset from an oracle home.
- No impermanent loss due to price fluctuations: Contrary to popular DeFi protocols that use AMMs such as Uniswap and Balancer, stakers on Perpetual Protocol do not incur any erratic losses caused by price volatility.
Perpetual Protocol also has a DEX platform for the future you can watch squid fishing tours.
Perpetual Protocol announced that it has raised $ 1,8 million in a strategic round led by Multicoin Capital with the participation of Zee Prime Capital, Three Arrows Capital, CMS Holdings, LLC. And Alameda Research, who is strategic with FTX.
Other Strategic Angels include Binance Labs, Andrew Kang, George Lambeth, Calvin Liu, Tony Sheng, Alex Pack and Regan Bozman.
- Chainlink: Partnering with chainlink to provide the decentralized or reliable price oracle. Ensure a perpetual protocol has a working funding payment system. This allows users to trust the network's automatic rebalancing. Bring more safety to users money
xDai: The high gas price on Ethereum has proven the importance of scalability. xDAI is an extensible option chosen by the Perpetual protocol. Since xDAI is Ethereum-compatible, it's user-friendly.
Perpetual Protocol was started by a group of crypto enthusiasts from Taiwan. And with members around the world.
Hopefully the above reviews can help you get an overview of the project. Consider it before you want to invest.