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What Is Perpetual Protocol? Detailed Explanation For Beginners

In this video, let's learn about what is Perpetual Protocol? The next level in decentralized trading? (Grade 2, Uniswap V3) | All You Know

So what is Perpetual Protocol all about? What are some of the improvements that come with the recently launched version 2 of the protocol? How does it make use of Uniswap V3? And what are perpetual futures in the first place? You’ll find answers to these questions in this video.

Perpetual Protocol is a DeFi project with the main goal of creating the best, most accessible and most secure decentralized exchange for perpetual futures.

Perpetual Protocol was founded in 2019 by a small team of startup founders and software engineers. Initially called “Strike”, the project pivoted to perpetual futures and changed its name in the summer of 2020.

The first version of the protocol was launched on the xDai network in December 2020. Version 2 of the protocol named Curie after the famous scientist and a Noble Prize winner - Marie Curie, launched on Optimism on the 31st of November 2021.

The design of Perpetual Protocol that we’re going to explain later is extremely interesting as it leverages the DeFi “money legos” ethos to both build upon other already existing DeFi projects as well as provide building blocks for other protocols in the future.

Perpetual Protocol is one of the projects that focus on derivatives in DeFi. If you need a recap on what derivatives are and an overview of other protocols in this space I highly recommend watching my other video first.

🔺 DISCLAIMER: The article is for information sharing. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Not investment advice or legal advice.

Cryptocurrency trading is VERY risky. Make sure you understand these risks and that you are responsible for what you do with your money

🔥 If you're a beginner. I believe the article below will be useful to you ☞ [What You Should Know Before Investing in Cryptocurrency - For Beginner]

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What Is Perpetual Protocol? Detailed Explanation For Beginners

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What is Perpetual Protocol (PERP) | What is Perpetual Protocol token | What is PERP token

Perpetual Protocol is a decentralized perpetual contract protocol for every asset, made possible by a Virtual Automated Market Maker (henceforth referred to as a “vAMM” or “vAMMs”).

For those who aren’t familiar with perpetual contracts: A perpetual contract is a derivative similar to a futures contract but without an expiry date

Like Uniswap, traders can trade with our Virtual AMMs directly without the need for counter-parties. The Virtual AMMs provide guaranteed on-chain liquidity with predictable pricing set by constant product curves. The Virtual AMMs are also designed to be market neutral and fully collateralized

Key features of Perpetual Protocol:

20x Leverage On-Chain Perpetual Contact
Traders can trade with up to 20x leverage long or short, have transparent fees, and 24/7 guaranteed liquidity.
Guaranteed Liquidity Provided by our vAMM
Every asset can be supported via a perpetual contract on Perpetual Protocol. Whether it’s gold, fiat, BTC, BCH, ETH, ERC-20s, XRP, EOS, LTC, ZEC, XMR, and more — Perpetual Protocol can support it all. All that Perpetual Protocol requires is a price feed for the underlying asset from an oracle.
Zero Impermanent Loss from Underlying Price Fluctuation
In contrast to popular DeFi protocols that utilize AMMs such as Uniswap and Balancer, the stakers on Perpetual Protocol do not suffer from any impermanent losses caused by price fluctuation.

With those advantages, we’re confident that Perpetual Protocol can bring more financial instruments to the DeFi ecosystem and be a vital piece of the Ethereum money legos!

Introduction of Virtual Automated Market Maker (vAMM)

Before Perpetual Protocol, most AMMs focused on token swaps, rather than derivatives trading, such as perpetual contracts.

To enable on-chain perpetual contract trading, Perpetual Protocol introduces a novel approach called a Virtual Automated Market Maker (vAMM). Perpetual Protocol’s vAMM uses the same x*y=k constant product formula as Uniswap.

As the “virtual” part of vAMM implies, there is no real asset pool (k) stored inside the vAMM itself. Instead, the real assets are stored in a smart contract vault that manages all of the collateral backing the vAMM. Perpetual Protocol uses a vAMM as a price discovery mechanism instead of a direct liquidity pool for spot trading like Uniswap, Balancer, or Curve.

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For a more detailed introduction into How vAMM works and the logic behind it, check our post Deep Dive into our Virtual AMM (vAMM) on https://gov.perp.fi/.

$PERP Token Utilities

$PERP token is Perpetual Protocol’s ERC-20 native token, powering the whole system in two ways：staking and governance.

Staking
$PERP holders can lock-up, or “stake,” the $PERP in their possession for a fixed amount of time to the Staking Pool. In return, stakers are rewarded with the staking incentive, which includes (1) PERP-denominated staking rewards, and (2) 50% of the network trading fees in USDT (the remaining 50% of the trading fee goes to the Insurance Fund).
You can learn more about how staking works here.
Governance
Once $PERP holders have staked their tokens, they can then use their staked $PERP to vote on or propose new ideas that can be used to improve the protocol. One thing to note is that before the wide distribution of the $PERP token, core protocol contributors will be ones that make critical decisions. This is intentional, as we think it’s important to keep governance nimble in the early days of the protocol.

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How and Where to Buy Perpetual Protocol (PERP)?

PERP has been listed on a number of crypto exchanges, unlike other main cryptocurrencies, it cannot be directly purchased with fiats money. However, You can still easily buy this coin by first buying Bitcoin, ETH, USDT from any large exchanges and then transfer to the exchange that offers to trade this coin, in this guide article we will walk you through in detail the steps to buy PERP

You will have to first buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT)…

We will use Binance Exchange here as it is one of the largest crypto exchanges that accept fiat deposits.

Binance is a popular cryptocurrency exchange which was started in China but then moved their headquarters to the crypto-friendly Island of Malta in the EU. Binance is popular for its crypto to crypto exchange services. Binance exploded onto the scene in the mania of 2017 and has since gone on to become the top crypto exchange in the world.

Once you finished the KYC process. You will be asked to add a payment method. Here you can either choose to provide a credit/debit card or use a bank transfer, and buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT)

☞ SIGN UP ON BINANCE

Step by Step Guide : What is Binance | How to Create an account on Binance (Updated 2021)

After the deposit is confirmed you may then purchase PERP from the exchange.

Exchange: Binance, Gate.io, OKEx, FTX, CoinBene, BKEX, and Hoo

Apart from the exchange(s) above, there are a few popular crypto exchanges where they have decent daily trading volumes and a huge user base. This will ensure you will be able to sell your coins at any time and the fees will usually be lower. It is suggested that you also register on these exchanges since once PERP gets listed there it will attract a large amount of trading volumes from the users there, that means you will be having some great trading opportunities!

Top exchanges for token-coin trading. Follow instructions and make unlimited money

☞ https://www.binance.com
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☞ https://www.huobi.com
☞ https://www.mxc.ai
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Find more information PERP

☞ Website
☞ Explorer
☞ Social Channel
☞ Message Board
☞ Coinmarketcap

Learn about Cryptocurrency in this article ☞ What You Should Know Before Investing in Cryptocurrency - For Beginner

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