Perpetual Protocol is software designed to incentivize a decentralized network of computers to run an exchange where users can purchase and sell derivative contracts.
Perpetual Protocol is a DeFi initiative that provides this service through written code, removing the need for financial intermediaries. Also, Perpetual Protocol is just a group of programs (called "smart contracts") that run on the Ethereum blockchain and were made to communicate and copy services provided in derivatives markets.
This means that people who use the Perpetual Protocol don't have to trust a particular institution or group of people to make trades. Instead, they just have to trust that the code will run as written.
The perpetual protocol was started by two Taiwanese entrepreneurs, Yenfen Weng, and Shao-Kang Lee. Before this, both had started payroll and accounting businesses for crypto startups. The project began in 2018 as "Strike" and released its main net in December 2020 with a new brand. The platform is backed by well-known investors like Zee Prime Capital, Multiarrows Capital, CMS Holdings, and Binance Labs.
The platform raised approximately $10.65 million by exchanging around 25 percent of its total supply of 150 million. The founding team and its advisers held about 21% of the supply, or approximately 36 million tokens, during the token creation event.
Gatekeepers: Trading derivatives were previously restricted to only accredited investors. Accredited investors have assets worth at least $21 million. This restriction left a number of investors in the dark. Perpetual Protocol makes trading more democratic and open by getting rid of the gatekeepers.
Lack of Options: The lack of functions and features is another big problem for DEX traders. DEXs offer the advantage of noncustodial trading, but have been lacking in terms of functionalities. Perpetual Protocol increases the number of possibilities available. The platform lets traders open long or short positions and trade using up to 10x leverage.
Perpetual Protocol tries to make trading in contracts that last forever like trading on traditional exchanges. It does this through two mechanisms: AMM and insurance fund.
Automated Market Maker - Perpetual Protocol made a new version of the well-known automated market maker (AMM) called the virtual automated market maker (vAMM). Automatic market makers have been evaluated on decentralized platforms such as Uniswap and Balancer, and they have proven to be good alternatives to centralized crypto exchanges.
In most AMMs, assets are put into liquidity pools that consist of two tokens that can be traded together. The pools generate revenue for liquidity providers (LPs). These fees are collected from customers who trade against pooled assets. The vAMM is designed to find prices, not to trade on the spot market.
Insurance Fund - Liquidation or unforeseen events pose considerable risks and could leave traders unable to fund their leveraged holdings. When this happens, an insurance fund comes into the picture.
Half of the transaction fees are used to incentivize staking. In reality, the insurance fund comes from the other half of transaction fees. The insurance fund increases as the number of network users increases.
Governance: Token holders can utilize their tokens to vote on the next token to be listed on the platform or to influence the course of the protocol. Staking: Token owners can stake their tokens on the protocol and earn staking rewards based on a portion of the transaction costs. Each virtual market needs backstops, which the stakers provide.
DATE NEWS/EVENTS IMPACT 07/05/2022 TerraUSD and LUNA both collapsed, and as a result, a number of crypto platforms folded in the aftermath -49% Decrease 18/03/2021 Perpetual Protocol (PERP) will be listed on Binance's Innovation Zone +20% Increase
The DeFi space has come a long way in the past few years. Even though many protocols are attempting to make cryptocurrency popular, not all of them have been or will be successful. Perpetual Protocol (PERP), which is a unique idea on Ethereum, could generate a significant amount of revenue when the team gives up complete control of their DAO. More importantly, both the platform and the token are getting more attention on social media as more traders start to believe in their potential. Perpetual Protocol is definitely a DEX worth watching.
Perpetual Protocol