Perp.fi - Counsel of 69 Submission

What is Perpetual Protocol

Perpetual is a pre-mainnet perpetual futures product. Unlike dydx and other competitors in market it uses a virtual Automated Market Maker (AMM, think Uniswap and Balancer) to power it’s trading engine. This means that unlike orderbook exchanges it is a lot easier to get liquidity.

Here are some of the benefits:

  • No auto develerageing (ADL): in regular exchanges your position can be closed even if you are on the winning side (as your long/short position is matched to an opposing position)
  • No IL: we don’t deposit funds into actual pools (hence the virtual AMM)
  • Controlled slippage: because we can control the invariant in the y * x = k formula we can create lower slippage
  • Less liquidity issues: we don’t need to build liquidity up like a traditional order book

For further considerations here is a quick document for pros/cons: https://docs.perp.fi/getting-started/faq#comparison

The Deal

Given this is the first deal for both parties Perpetual Protocol have gone with extremely friendly terms to start:

  1. 50K USDC investment for PERP tokens at a 50% discount of market price
  2. Tokens will be vested over a period of 6 months
  3. Harvest will implement at least one strategy and make it live

Note that Perpetual Protocol have removed all requirements for open interest/trading volume to allow for flexibility given there is discussion around a capped pool development

Further Considerations

  • Perpetual is aiming to go main net in the next couple of weeks on L2
  • Most likely going to be xDAI to start with and then potentially migrate to some other protocol. This is still TBD
  • There is a planned fee rebate program which means that if Harvest is able to integrate early on they will be able to take advantage of this sooner. Still in proposal stage with details being finalised but here are further details: https://docs.perp.fi/getting-started/liquidity-mining-proposal