What is Perpetual Protocol?
The Perpetual Protocol token or PERP is a utility token native to the Perpetual Protocol. The latter is a decentralized perpetual futures exchange. It’s built on xDai and Ethereum’s Layer 2 Optimistic Rollup network - Optimism.
PERP is based on the ERC-20 token standard. It has 2 core use cases:
- Staking. Users can stake their PERP tokens and earn crypto rewards. Moreover, 50% of trading fees are distributed among stakers;
- Governance. The Perpetual Protocol token serves as a governance token. This means that PERP holders can vote on proposals submitted to Perpetual DAO or put forward their own. The more PERP tokens one has, the more power one holds.
An updated tokenomics model will be implemented in the Q2 of 2022. This new model will introduce vePERP tokens.
There is a total supply of 150,000,000 Perpetual Protocol tokens which makes it deflationary. This makes it possible for the PERP price to increase with time. The tokens have been distributed as follows:
- 54.8% - Ecosystem and Rewards;
- 21% - Team and Advisors;
- 15% - Strategic Investors;
- 5% - Balancer LBP;
- 4.2% - Seed Investors.
For more information, you can have a look at the PERP price history or the current Perpetual Protocol price on the graph above.
What are the Main Features of Perpetual Protocol?
Perpetual Protocol is a perpetual futures trading platform that’s completely decentralized. As a refresher, perpetual futures are a type of futures that don’t have an expiration date.
Users can use Perpetual Protocol to participate in non-custodial trading and go long or short with a leverage of up to 10x.
The project highlights the importance of accessibility and security when it comes to perpetual trading protocols. That’s why their primary goal is to provide the most accessible decentralized futures trading platform with the highest level of security.
Chainlink is the oracle of choice used by Perpetual Protocol. Its main responsibility is to feed Perpetual Protocol with real-time information on the average market price of coins or tokens. This information is also known as the index price.
Moreover, the Perpetual Protocol platform was developed on Uniswap v3 smart contracts for processing trades. It uses a virtual Automated Market Maker (vAMM) for performing trades. The latter ensures on-chain liquidity in addition to being fully collateralized.
Most importantly, users trade against the vAMM instead via an order book. All perpetual futures have a vAMM of their own. Plus they’re also protected by the Perpetual Protocol’s insurance fund.
Unlike many EVM-based platforms, Perpetual Protocol doesn’t come with high fees. This is possible due to several reasons. Firstly, it utilizes Optimism that takes multiple transactions and turns them into one. Secondly, Perpetual Protocol has integrated an xDai Layer 2 scaling solution.
The governance model used by Perpetual Protocol is based on community voting via the Perpetual DAO which is divided into sub-DAOs such as Grants DAO and Token Listing DAO.
As discussed in the What is Perpetual Protocol section, PERP also serves as a governance token. The number of tokens held directly relates to the voting power. To put it simply, 1 PERP token equals 1 vote.
Perpetual Protocol recognizes that this type of governance model is not ideal, therefore, in the future, it will introduce a new model powered by vePERP tokens that enable users to increase their voting power without increasing the number of tokens they have.
In essence, they will be able to increase their voting power by locking in their PERP tokens for up to 52 weeks. When PERP tokens are locked in, the users receive vePERP tokens in their place.
In addition, Perpetual Protocol offers a grants program for all eligible projects that are built on the Perpetual Protocol or provide liquidity solutions to improve it.
An Ethereum-compatible wallet and USDC are the only requirements to begin trading on the Perpetual Protocol platform.
The Perpetual Protocol crypto project has gone through audits performed by Consensys and Peckshield.
Who Developed Perpetual Protocol?
The Perpetual Protocol crypto project was launched in 2019. It’s a Taiwan-based company co-founded by entrepreneurs Yenfen Weng and Shao-Kang Lee.
Initially, the project was launched under the name Strike but was rebranded to Perpetual Protocol in the summer of 2020.
Yenfen Weng went to the National Chiao Tung University where he earned his bachelor’s
degree in electrical and control engineering and a master’s degree in computer science. Besides Perpetual Protocol, he has been part of the founding team for a variety of projects including gamelet.com and Cubie Inc.
Shao-Kang Lee is a crypto entrepreneur with experience in software engineering. He holds a bachelor’s degree in information management from Yuan-Ze University and a master’s degree in software engineering from National Central University.
Prior to Perpetual Protocol, the duo co-founded other companies including Zaoo Inc. and Cinch Network.
The project has received support from major venture capital firms like Binance Labs, Zee Prime Capital, CMS Holdings, and Multiarrows Capital. This allowed the project to garner 1,800,000 US Dollars in the seed round.
Before jumping into the project, make sure to do your research. Start on the graph above which will provide you with the current Perpetual Protocol price and other details.
