Proposal: Add $PERP to DeFi+S

Hi everyone!
This is Weiting from Perpetual Protocol (perp.fi).

Today, I’d like to propose the addition of the $PERP token to the DeFi+S.

First thing first, what is Perpetual Protocol?

Perpetual Protocol Intro
Perpetual Protocol is a decentralized perpetual contract protocol for every asset. With the help of our virtual AMMs (vAMMs), traders can trade perpetual contracts with up to 16x leverage without the need to wait for a counterparty.

Furthermore, although everything happens on-chain, it costs traders 0 gas fee to trade on the main trading venue (perp.exchange). The secret sauce behind this is that all of the smart contracts that traders interact with are on the xDai Chain, an EVM-compatible blockchain with super low gas fees. The gas fees are so low to the extent that we just cover them for the traders.

Just give you a context - there have been more than 179K trades since the launch of the protocol, but the cumulative gas fees are mere $183. If the smart contracts were on Ethereum, traders’ gas fees would be tens of millions of USD worth of ETH.

You might be thinking: “There aren’t that many users on the xDai Chain!”

We’re fully aware of that.
And that is why we utilize meta transactions so that people can trade on the protocol without ever knowing everything happens on the xDai Chain - users just come to the site, connect their wallet (Metamask and Ledger are supported), deposit some USDC, and they’re ready to trade perpetual contracts non-custodial.

You can try out our testnet at https://rinkeby.perp.exchange (it’s risk-free!)

Milestones since Launch

The mainnet launches on December 14th, 2020, and the trading volume has steadily increased since then, as the bar chart below shows.

Here are some highlights worth pointing out:

  • The cumulative trading volume reaches 100M USDC in less than 3 weeks after launch.
  • The peak single-day trading volume is over 80M USDC.
  • The number of unique traders per day is over 100.

You can check our public dashboard to learn more or use our subgraph to query the on-chain data to verify these numbers.

Why $PERP
There are two arguments that I think $PERP will be a great addition to DeFi+S.

  1. Token Utilities
    There will be two utilities for $PERP:
  • Staking:
    $PERP holder can stake their tokens on the protocol. In return, they’ll be rewarded with the staking rewards (in $PERP) and a cut on the transaction fees (in $USDC).
  • Governance:
    Stakers can use their staked $PERP to vote on 1) the next new market to be included on the protocol and 2) the critical parameters of the protocol.

Currently, there is no yield generating token among all the existing tokens in the DeFi+S like $PERP.

  1. Marketcap Growth
    In terms of the marketcap growth rate, with the line chart below, we can see $PERP has outperformed all of the components in the DeFi+S since the launch of the protocol.

Not to mention that currently, $PERP’s marketcap is still small (ranked 5 out of 7 if it was in the index) and comparing to the big ones like UMA in the DeFi+S, there is still plenty of room for growth.

However, as we all know that past performance does not predict future returns, in the following, I’ll lay down some important things that we’re building to maintain the momentum.

Future Plan

  1. Advanced Order Type
    For the time being, the main trading venue can only support market orders. But we’ve set up a bounty for more advanced order types to attract more traders from the CEXs.
  2. New Markets
    The number of markets has increased from two to four since the launch of the protocol. We’ll launch a new market once per few weeks per our community’s decision.
  3. Leveraged Token
    Since the protocol is on the xDai Chain, it loses the composability to the DeFi ecosystem on Ethereum. To tackle this, we’ve set up a bounty for the leveraged token, which will allow people to get a leveraged position through DEXs on Ethereum.

Helpful Links

  1. A Deep Dive into our Virtual AMM (vAMM)
  2. How does Perpetual Protocol work?
  3. :new: Audit Report (another one from Consensys is coming soon)
  4. :new: Bug bounty program (up to 10% TVL as the bounty reward)
  5. :new: Token distribution and vesting schedule

Please let me know if anyone of you has any questions or feedback.
Thank you :bowing_man:‍♂

9 Likes

Hi @weitingatperp, welcome to the PieDAO community!

I find the Perpetual Protocol fascinating and looks like a good fit for DEFI+S as it’s currently sitting on the $100 range market cap.

Something which comes to mind reading about Perp is the possibility to use perpetual contracts inside pies, for instance, to get DOT exposure. Do you guys have plans to bridge the perps to the Ethereum mainnet? In that regard, what is the general policy about composability in other DeFi protocols?

In the meantime, in order to speed up things it would help if you could link audits for the PERP token and more detailed info on the token distribution (investment rounds, vesting, rewards schedule).

Thanks!

9 Likes

Thanks for the well written proposal! Looking forward to the additional information :grinning:

6 Likes

Alexintosh :raising_hand_man:
I’ve added the links for the audit report, bug bounty, and token distribution to the Helpful Links section above.

As for bridging perps to Ethereum mainnet - we’re working on the leveraged token for that (which also included in the Future Plan section above). So in the following months, people can get a leveraged position for the perpetual contracts on the protocol from DEXs on Ethereum without ever touching xDai.

But besides the leveraged token, there is no other way for us to compose with other DeFi protocols on Ethereum afaik.

Let me know if you have more questions :bowing_man:‍♂

3 Likes

Hey @weitingatperp
I moved the topic to the #rebalancing-ideas ection while waiting for the appropriate to be provided.

More info: How To Prioritise PIPs & Guidelines For Good Interactions in the Forum