After Bitcoin, Ethereum has scaled its reach to new highs every new day. By offering a solid base for DeFi and NFTs, Ethereum has shed light on the different use cases of cryptos. However, the platform has often faced congestion which results in exorbitant fees. Although ETH 2.0 intends to fix this, the time frame remains misty. Here’s a platform that offers cheaper fees and also allows you to leverage your capital by up to 20x.
Perpetual Protocol is a decentralized Finance (DeFi) platform that connects a distributed network of computers and incentivizes them. It is a collection of smart-contracts-driven programs running of Ethereum blockchain aiming to communicate and mirror the services offered in the derivative market. The platform is not built for spot trading but to designed for leverage trading, short positions, and low levels of slippage.
Besides, PERP is the native crypto of Perpetual Protocol which is used in governance and staking. While the progress of the platform is in its early stages as the ultimate goal lies in transferring the power to the PERP holders with developments and improvements.
|Founder||Yenwen Feng and Shao-Kang Lee|
|Blockchain Protocol||Ethereum Blockchain|
|Market Cap||$61.85 million|
|Token Type||ERC-20, Native & Governance|
|Consensus Method||Proof-of-Stake (PoS)|
The perpetual protocol was founded by two Taiwanese entrepreneurs, Yenfen Weng, and Shao-Kang Lee. Before this, both had launched payroll and accounting companies for crypto startups. The project started in 2018 as ‘Strike’ and later launched its mainnet in December 2020 with a new brand. The platform is backed by highly reputed investors like Zee Prime Capital, Multiarrows Capital, CMS Holdings & Binance Labs.
The platform raised nearly $10.65 million by exchanging nearly 25% of the total supply of 150 million. The founding team and its advisors retained nearly 21% of the supply which comes to around 36 million tokens in the token’s creation event.
Perpetual Protocol aims to offer a platform similar to the spot trade platforms, where-in the buying and selling of the tokens are carried out with ease. It does so by using two mechanisms Virtual Automated Maker (VMM) and Insurance Fund.
In traditional AMM’s, the traders deposit their cryptos into the liquidity pools representing certain trading pairs. Further, users trading against these assets have to pay fees which are distributed among all liquidity providers based on their contribution. Here, in vAMM, there are no real cryptos stored as the platform is designed only for price discovery but not for spot exchange. Hence called Virtual Automated Market Maker and it uses the functions used for other projects like Uniswap to determine prices.
It consists of ‘Clearing House’ and ‘Collateralization Vault’ which are nothing but smart contracts that enable leverage on both long and short trades. As the traders make a deposit, the clearing house accepts it and determines the nature of the trade. Further, it deposits to the Collaterization vault which helps the platform to backstop & secure trading positions and notifies the AMM to update prices.
The derivative space is filled with uncertainty and hence unexpected losses may be a part of it. Hence the insurance fund is the first line of defense if these losses occur either losses in the liquidation process or inability to fund the trader’s liquidation process. The protocol’s 50% of the transaction fees are deposited and the insurance fund is raised using these fees. In the worst event of the Insurance Fund being depleted, a smart contract is triggered which mints new PERP and sells them for collateral.
|Perpetual Protocol Price Today||$0.9636|
|Price Change <Yearly>||-79.4%|
|Market Rank (as per CMC)||379|
|Market Cap||$63.71 million|
|Fully Diluted Market Cap||$139.99 million|
If you are planning to buy Perpetual Protocol? Just follow the below-mentioned steps,