Derivatives trading helps increase liquidity in the Crypto market and attract more investor interest. It emerges when markets become more sophisticated and liquid. It also shows how the infrastructure of the Crypto market has developed.
In this article, we would like to introduce Perpetual Protocol known as a decentralized perpetual swap protocol. In Defi, Perpetual was one of the first Derivatives trading platforms. We’ll be covering the following topics:
- What is Perpetual Protocol? How does Perpetual Protocol work?
- PERP Tokenomics and How/Where to earn and store PERP tokens?
- Roadmap & Updates.
- Team members, Investors, and Strategic Partners.
Let’s explore the potential of PERP!
What is Perpetual Protocol?
Perpetual is a decentralized protocol that uses a Virtual Automated Market Maker (vAMM) to trade perpetual contracts for all assets. The project aims to create novel financial instruments by democratizing Futures and other crypto-asset derivatives.
The core of Perpetual Protocol is the decentralized exchange (DEX) based on Ethereum and xDai.
How does Perpetual work?
This is the main component that makes the Perpetual Protocol – AMM special but does not need liquidity.
vAMM uses the “x*y=k” (constant product formula) of Uniswap v2, but unlike Uniswap, vAMM contains no assets in the Liquidity Pool. Instead, the platform uses “x*y=k” as a mechanism to determine Perpetual Futures prices.
As for the virtual AMM, Perpetual belongs to a multi-currency virtual fund pool and gives priority to the inclusion of highly liquid tokens in the virtual fund pool. Because the virtual fund pool first aggregates various tokens into different virtual fund pools. Currently, Perpetual is supporting trading with 14 cryptocurrencies trading pairs with USDC, such as BTC, ETH, DOT, FTT, SUSHI, etc
Contrary to the applications that utilize automated market makers (AMMs) for both token swaps and price discovery such as Uniswap and Balancer, Perpetual uses the constant-product curve in its AMMs solely for price discovery so that Perpetual can handle leverage and shorts.
Therefore, the vAMM of Perpetual only plays a role to calculate the price, after traders close the position, they will rely on the vAMM to calculate the profit and loss and allocate based on the margin.
Transaction Fees Pool & Insurance Fund
A portion of the transaction charge will be collected by the platform, with half going into the Transaction Fees Pool and the other half going into the Insurance Fund.
If the market is so volatile that the platform has trouble liquidation positions, the Insurance Fund will be used to secure traders’ payment as well as the system’s safety.
What is the PERP token?
PERP token is the native utility token of the platform. PERP token is primarily a utility token designed to facilitate and incentivize the decentralized governance of the protocol.
PERP Key Metrics
- Token Name: PERP Token.
- Ticker: PERP.
- Blockchain: Ethereum.
- Contract: 0xbc396689893d065f41bc2c6ecbee5e0085233447
- Token type: Native.
- Token Standard: ERC-20.
- Total Supply: 150,000,000 PERP.
- Circulating Supply: 56,067,0704 PERP.
PERP Token Allocation
- Ecosystem & Rewards: 54.8%.
- Team & Advisors: 21%.
- Strategic Investors: 15%.
- Balancer LBP (Liquidity Bootstrapping Pools): 5%.
- Seed Investors: 4.2%.
PERP Token Release Schedule
Perpetual Protocol will reward stakers with a fixed amount of tokens 150,000 PERP per week. This amount of tokens will be divided into 2 types of Liquid reward and Vesting reward.
For Liquid reward, the amount of PERP will be calculated according to the Trading Fee of the platform and Users can withdraw immediately.
As for the vesting reward, this amount of PERP will not be paid immediately, but users will receive it gradually over a period of 6 months.
Besides, the number of tokens according to tokenomics will be unlocked gradually over 4 years.
PERP Token Sales
- Seed Round: Binance Labs is a Seed investor of Perpetual Protocol, according to information from the project, Binance Labs invested in their project in 2018, detailed pricing information is not disclosed.
- Private Sale for Strategic investors: Raised 1.8 million (22,500,000 PERP) took place in May 2020 for $0.08/PERP.
- Public Sale: 7,500,000 PERP ($9.75 million) was distributed via a Balancer Liquidity Bootstrapping Pool (LBP) in September 2021 for $1.3/PERP.
PERP Token Use Cases
- Governance: Token holders can use their tokens to vote on the next token being listed on the platform or influence the protocol’s direction.
- Staking: Token holders can stake their tokens on the protocol and receive staking rewards from a portion of the transaction fees. The stakers provide backstops for each virtual market.
How to buy PERP Token
You can use Coin98 Wallet to swap other tokens for PERP following these simple steps:
Step 1: Open Coin98 Wallet on your mobile phone.
Step 2: Search PERP token.
Step 3: Choose PERP on Swap feature.
Step 4: Adjust the amount you want to swap.
Step 5: Adjust the gas fee, then click Approve.
How to store PERP Token
You can store PERP on Coin98 Wallet with these steps:
Step 1: Open Coin98 Wallet & click Search Icon on the home screen.
Step 2: Search PERP Token.
Step 3: Click on the correct result at Receive Tab with a specific chain (ERC20), copy the wallet address and send PERP to this address.
- Balancer Liquidity Bootstrapping Pool & Staking Rewards
- Chainlink price feed
- Trading with Virtual AMM
2021 & Future vision
- Decentralized hedge fun
- Migration to future scaling solutions
- Mainnet V2
- Dynamic liquidity (dynamic k)
- Perpetual Protocol Governance
In October 2021, PERP has been holding a testnet for PERP ver2 called Curie, which is an upgrade to the current version of PERP. This version has many outstanding features as follows.
- Faster trading thanks to L2 (Arbitrum)
- Better liquidity and lower spreads thanks to Uniswap v3 under the hood
- Leverage for market makers – LP with leverage
- All-new UI for easier trading on mobile and desktop
- Dynamic liquidity for improved system stability and market responsiveness
- Better composability, allowing integration with a host of other DeFi protocols and tools
- Cross-margining for flexible position management
Team, Investors, and Partners
Yenwen Feng: Yenwen cofounded Perpetual Protocol (Decentralized Perpetual Contract Protocol), Decore (Stripe Atlas for Crypto Companies), Cinch Network (Decentralized Derivatives), Cubie Messenger (Mobile Messenger, 500 Startups B5, 10M downloads), Gamelet, and Willmobile (Top mobile financial service app in Taiwan, acquired by Systex) since 2004.
Shao-Kang Lee: Lee is the Co-Founder at Perpetual Protocol. Additionally, Lee has had 1 past job as the COO & Co-founder at POPAPP
Chainlink: For the computation of the funding rate, Perpetual Protocol integrates Oracle from Chainlink to determine the current price of the asset (Index Price) and reduce the risks of price manipulation, asset liquidation, and Protocol stability.
Is Perpetual (PERP) a good investment?
The DeFi landscape is so vast that it needs extra attention. If done right, DeFi is a once-in-a-generation financial opportunity.
The latest PERP price is $16 with 16,000% ROI since early 2021. In my opinion, the price is currently so inflated that it’s hard to decide if current prices reflect honest price discovery. Before adding PERP to your portfolio, you should carefully monitor the crypto market’s movement and determine the proper price range for your entry.
Although the capitalization of Perpetual has continuously grown over the past year, Perpetual’s transaction volume has decreased in recent times. Besides, the appearance of other competitors such as dYdX which is quite strong is also a factor affecting Perp’s potential.
As a result, I believe this is an investment opportunity that should be carefully considered. Hopefully, Perpetual will come up with new innovations and strategies in the future to attract more users and trading volume.
Perpetual has always held the position of the highest revenue blockchain platforms, which also proves that Perpetual’s business model is useful to users.
Disclaimer: All the information in this article is only for information purposes and should NOT be considered investment advice. Investing in Crypto contains hugely high risks, and you should only invest the fund you are willing to lose.
FutureSwap: Futureswap is a decentralized platform that enables traders to enter into leveraged perpetual contracts at low rates backed by our liquidity pools using automated market making. Futureswap can be viewed as a hybrid between Uniswap and a leveraged trading platform that allows up to 10x leverage.
dYdX: dYdX is a non-custodial decentralized exchange that allows users to trade token pairs via Ethereum and Polygon smart contracts. This gives traders the ability to trade on margin while also benefiting from the security provided by Ethereum.
So I have provided you with the latest information from Perpetual Protocol. What do you think about the future of Perpetual? Please comment below to discuss with Coin98.
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