The Perpetual Protocol network avails its users the avenue to trade a wide spectrum of digital assets. This cuts across services such as short selling, with leverages as high as 20x. Additionally, participants can also earn from the system through the provision of liquidity or by staking protocol tokens. All of this can be done via an automated program or web3 interfaces.
According to the perpetual protocol network, their goal is to create a form of democracy to power trading tools. In the past, leveraged derivatives trading was only exclusively available for the domain of centralized organizations and a collection of wealthy individuals. Perpetual Protocol lowers the barrier, making advanced trading tools available to all.
In essence, the Perpetual Protocol network allows people to create synthetic leveraged long or short positions on any asset that is endorsed within the ecosystem. In order for the system to support an asset, there is a preexisting requirement to have access to the current price of the underlying asset to be able to correctly ascertain the size of the recurring funding payments.
Who are the Founders of Perpetual Protocol (PERP)?
The Perpetual protocol platform, formerly known as Strike, was established in 2019 based on the inspiration of several emerging DeFi protocols including the Synthetix and Uniswap networks. According to the team, it planned to combine the advantages of these protocols and coin them into creating a decentralized perpetual contract that can facilitate trading on the Ethereum blockchain. Because of this, the protocol was created with the capability to support around 20x leverages in short positions, as well as lower slippage in comparison to other AMMs thanks to its virtual AMM design.
The network was founded by Yenwen Feng and Shao-Kang Lee. Feng is a well-respected individual in the world of software development. Before establishing the Perpetual Protocol system, he co-founded several software development companies and served as the CEO in a few of them. Some of these include Cubie Inc, Zaoo Inc, gamelet.com, Willmobile Inc, and several others. Just like Feng, Lee is also well educated with two degrees in software engineering and information technology. Over the years, Lee has worked in Servers corporations as a developer before later establishing a series of companies.
What is Perpetual Protocol (PERP) used for?
While the Perpetual protocol network is the business of incentivizing distributed networks of computers to facilitate an exchange where its participants can buy and sell derivative contracts, it uses primary utility tokens. PERP token is the dedicated primary utility token designed to execute transactions on the network, while also incentivizing its operated decentralized governance system. As such, users that hold PERP tokens acquire voting rights based on the number of tokens they hold.
Outside of the network, the token also holds value and because of this, it can be exchanged with other cryptocurrency pairs such as Terra to earn a profit for the holders.
What Is the Unique Point of Perpetual Protocol (PERP)?
In its basic structure, the Perpetual Protocol was designed in a way that allows users to buy and sell perpetual contracts such that the process mirrors that of a traditional exchange. The network can achieve this through its creation of a new version of the famous Automated Market Maker (AMM), this protocol uses a math function to deduce the prices of assets and can further facilitate an exchange involving two or more assets. Some of the game-changing developments brought about by the perpetual protocol include:
- Virtual Automated Market Maker
The common practice with regular AMM setups involves users depositing digital assets into liquidity pools that are represented by specific trading pairs. Upon achieving this, users who enter into trades against the assets in the pool will be required to pay a fee that is distributed among all the liquidity providers proportionally. This distribution is based on their contribution to the pool.
The Perpetual Protocol’s vAMM on the other hand follows a design principle that is for only price discovery and does not serve for spot exchange. Even though it uses the same set of mathematical functions as most of the other DeFi projects available such as Uniswap in price determination, there are no real digital assets stored within the vAMM system. This is what is responsible for the name“virtual” Automated Market Maker.
- Insurance Fund
If an unexpected loss occurs from either a diminish of the liquidation process or there is the incapability of the traders to fund their position payments, the insurance fund is set to kick in as the first line of defense. The funding accrues all through the protocol’s usage in the execution of transactions as it is majorly composed of 50% of the network’s transaction fees.
If the Insurance Fund is depleted, the network automatically triggers a smart contract that mints new PERP tokens and then, subsequently, sells those tokens to serve as collateral in the Vault in order to keep the system’s solvency protected.
How many Perpetual Protocol (PERP) coins are in circulation?
The Perpetual Protocol network has a total supply of 150,000,000 tokens and currently, its level of token circulation is 68,700,000 PERP coins. The existing token supply can be inflated through two principal vehicles, with both of them having low chances of occurring. The first is through Governance, which takes effect if the network decides to mint more tokens. The other avenue is if the insurance fund is exhausted and there’s a need to mint perp tokens to cover up the shortfall.
Is the Perpetual Protocol (PERP) Network secured?
Unlike most of the regular cryptocurrencies that use a dedicated consensus algorithm or adopt an existing algorithm, the Perpetual Protocol network is secure by its own special system. The platform has comprehensive Terms of Service in which they state limits placed on users of the platform geographically. Through this process, their front end is protected in addition to the other extensive compliance followed by their system such as the IP (8-7-2021). The team behind the protocol has also open-sourced its UI, indicating that there might be a possibility of the Platform wanting to encourage more direct interactions with its contract system.
How do I buy Perpetual Protocol (PERP)?
The Perpetual protocol network provides services that have previously been in short supply in the world of cryptocurrencies. Thus, more people are getting acquainted with its system and as such vastly adopting its usage. Currently, PERP tokens are available across several exchanges and can be easily purchased by the following steps.
- Open an account with the crypto trading platform.
- Transfer the specific amount of your fiat currency to your account.
- Wait for your deposit to be confirmed and Buy PERP through your trading account.
Which Cryptocurrency Wallet Supports Perpetual Protocol (PERP)?
The PTPWallet platform supports many cryptocurrencies simultaneously such as Perpetual Protocol (PERP). Because of its vast use case, it has grown to become one of the most used platforms as it serves as an exchange and an engine to discover other cryptocurrencies. Additionally, users can easily use PTPWallet as their Perpetual Protocol wallet because offers a simple and interactive interface making it easy for people to navigate its system.