PERP is an ERC-20 token released by Perpetual DAO that operates as an Ethereum-based platform. When the system was launched, it supported only BTC/USDT and ETH/USD contracts planning to extend its services. At the time of writing, the facility has gained significant traction and has become the largest DeFi Futures Exchange that enables on-chain trading.
The decentralized resource offers futures-like contracts, which support the trade of cryptocurrencies, fiat money, gold, and crude oil. Also, the platform provides 20x leverage. Staking for a fixed amount of time, members of the community get staking rewards and stablecoin trading fees.
The platform was created to popularize permissionless financial tools and make Futures Contracts more democratic. The team of the platform admits that the idea of crypto derivatives makes the industry of cryptocurrency trading more interesting and versatile.
Though derivatives trading is accompanied by some problems that occur on centralized platforms, the decentralized structure allows users to remove them. This chance wasn’t used by many decentralized resources, which adopted the wrong approach to perpetual contracts. But Perpetual Protocol altered these schemes to remove risk from this market-making model.
Perpetual Protocol platform
Governed by Perpetual's native protocol that was developed by the in-house team, the platform employs the system of vAMMs (virtual automated market makers) using virtual pools with the data contained in smart contracts. The same system is employed by decentralized platforms, but it uses an AMM mechanism that employs direct liquidity pools.
The vAMM mechanism effectively solves the problem of liquidity on the facility as it can be algorithmically proven by the platform’s protocol. The protocol provides ever-present liquidity, unbiased markets, predictability of prices, and entirely collateralized contracts. With its help, traders always get their fair share as a result of the settlement. These features taken together make trading less risky for the members of the community and eliminate losses that would be inevitable when the AMM scheme is implemented.
Since Perpetual protocol is a decentralized platform, it is governed by the members of the community who enjoy their voting rights. The weight of every member’s vote is directly connected with the number of the platform’s tokens held on a wallet. In this way, the team has developed a special structure to make users participate in the governance process. For instance, they apply such methods as higher staking rewards and trading fees rewards, and a higher value of the PERP token. As a result, users are more interested in the protocol and more involved in the activity of the platform.
The liquidity mining program offered by the platform was created to reward early adopters, who get discounts on trading fees and funding payments. The goal of the program was to attract more traders, transfer more PERP tokens to the members of the community, and exclude wash trading.
Perpetual Protocol technologies and products
The platform has solved the problem of high Ethereum fees inherent to other platforms that select EVM-compatible chains for migration. The system uses a layer-2 scaling solution via xDAI to reduce high gas costs.
The Clearing House and Insurance Fund are two components of the platform that are managed by the scaling platform. The solution chosen by Perpetual Protocol is Interchain Transaction Bridge that additionally allows using the website in the same way as an Ethereum-compatible platform.
In April 2021, the platform launched a Pool Together campaign to reward traders that weren’t related to PERP staking. Within the frames of this campaign, traders accumulated a new token pPERP released by the system. The platform promised pPERP airdrops to the members of the community. The pPERP tokens can be staked on Pool Together thus giving the chance to the participants to win in the campaign. Traders can get their prizes on a weekly basis. Active traders get more pPERP tokens automatically, and, consequently, get higher chances to win prizes.
In May 2021, Perpetual Protocol released the open-source interface for developers and technically-savvy users for its deployment on their local servers. It was launched to provide more options so that users could interact with the Perpetual protocol smart contracts not relying on centralized web services.
In June 2021, the platform announced the trading competition with a prize pool from 25,000 USD to 15,000 USD in INDEX and 10,000 USD in PERP. 15 top traders who were ranked by net profit received the rewards and shared prize pool.
As for the technologies involved in the work of the system, the platform relies on Chainlink oracles for the accuracy of information. It provides the aggregated price from trustworthy exchanges that is also called index price.
Perpetual Protocol token
This is a utility token that was released to implement decentralization of the protocol that is governed by the members of the community who can vote and take decisions on the future of the platform. The PERP tokens are needed to stake the assets and earn profit. The staked tokens also serve its holders for voting. They earn more and also have the right to participate in the governance procedure proposing new ideas or taking part in voting.
The stakers share 50 percent of the trading fees. The staked funds remain locked for seven days. It is necessary to unstake funds before the withdrawal of assets. It is recommended to use MetaMask for the depositing of funds. Since opening the position on the platform is performed as a meta transaction, no gas is charged for that.
Perpetual Protocol security
The platform was thoroughly audited by several leading teams such as Consesys, Peckshield, and others.
Perpetual Protocol team
Perpetual Protocol was founded by Yenwen Feng and Shao-Kang Lee. The platform was initially supported by the team from Taiwan, which extended to a bigger team with members that live in different parts of the world. It includes multiple specialists in engineering, development, and research. The project is supported by such famous companies as Alameda Research, Divergence Ventures, Binance Labs, Mechanism Capital, CMS, Three Arrow Capital, and others.