Perpetual Protocol (PERP)

What is Perpetual Protocol?

Perpetual Protocol is a protocol that allows the issuance of perpetual futures contracts of any asset. The goal of Perpetual Protocol is to decentralize futures contracts, allowing anyone, anywhere, anytime to access and use the platform for trading without going through the process of trading. 3rd part.

What problem does the Perpetual Protocol solve?

When you trade on centralized exchanges (CEX), you will connect the market through an intermediary (exchange), your money will be managed by the exchange (custodial) whether you want or not. Because of such a centralized model, CEX exchanges are often the top target for hackers to attack.

Even the Top CEXs in the industry have been hacked, so I don't think the problem is "was this exchange hacked or not?" but "when?".

In addition to security issues, the CEX floor also has problems related to user fraud, traders on Bitmex who have been killed by unreasonable candlesticks will understand better what they are talking about.

The Perpetual Protocol was created to solve most of the above problems:

• Trustless: Users have access to the marketplace without the need for an intermediary.
• Non-Custodial: Users will be able to control and manage their own assets and do not need to deposit it with any party.
• Transparency: Everything will be operated through Smart Contract on Ethereum and managed by DAO in the future.
• Permissionless: Anyone, anywhere or at any time can access and use the platform of Perpetual Protocol without restricting permissions by anyone.

What is the Perpetual Protocol solution?

To solve this problem, Perpetual Protocol not only needs a platform that works, but it also has to be simple, easy to use and friendly to new users.

Core product

The core of the Perpetual Protocol is the project's protocol, which consists of two main parts:

• Virtual Automated Market Makers (Virtual AMMs): A virtual automated market maker (AMM) model inspired by Uniswap .
• Liquidity Reserve: Liquidity Reserve as collateral for Virtual AMMs.

I will explain each part for you to understand easily:

If CEX centralized exchanges use Order Book to connect buyers (Buyer) and sellers (Seller) with each other, on DEX decentralized exchange , the two parties are connected on-chain (On-chain). by Liquidity Pools. Liquidity Pool allows users to Swap Token in a decentralized and unmanaged 3rd party, this technology is called AMM (Automated Market Maker).

While this is a pretty good idea, AMMs are primarily for token swaps and are not applicable to perpetual futures contracts.

So Perpetual Protocol created the Virtual Automated Market Maker (Virtual AMM): It basically uses the same x * y = k formula as Uniswap, with some key features as follows:

• vAMMs are intended to be used as a mechanism for determining pricing, not for Swap Tokens.
• No real Assets are stored inside the vAMMs themselves. Real Assets are stored in another Pool and managed by Smart Contract.
• There is no need for liquidity providers to provide liquidity to vAMMs.
• “k” can be adjusted manually.

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