Proposal: Add PERP to PIPT

Hi everyone!
This is Weiting from Perpetual Protocol.

Today, I’d like to propose the addition of the $PERP token to the PIPT.

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 it.
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. Please check our dashboard on DuneAnalytics to see the volume chart.

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.

Why $PERP
There are three arguments that I think $PERP will be a great addition to PIPT.

  1. Positioning
    Right now each token in the PIPT captures a different value from an array of on-chain activities - SNX captures synthetic assets trading, wNXM covers on-chain insurance, MKR benefits from stablecoin minting behaviors, and etc.

Adding $PERP to the list will help PIPT capture value from a new on-chain activity with a huge upside - on-chain perpetual contract trading. And the addition could also help PIPT differentiate itself on the market since $PERP hasn’t been included in any DeFi index yet.

  1. Yield Generating Ability

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.

Once the staking functionality is released, 50% of the transaction fees will be distributed among stakers. Assuming the protocol continues to generate 30M USDC trading volume per day, it means 150,000 USDC will be distributed among stakers each week. And as more markets being listed on the protocol, there should be more transaction fees distributed among stakers.

  1. Marketcap Growth

In terms of the marketcap growth rate, with the line chart below, we can see $PERP has outperformed nearly all of the components in the PIPT since the launch of the protocol.

Not to mention that currently, $PERP’s marketcap is still small (ranked 7 out of 9 if it was in the index) and comparing to the big ones like AAVE and SNX, 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) (https_://perpetualprotocol.medium.com/a-deep-dive-into-our-virtual-amm-vamm-40345c522eeb)
  2. How does Perpetual Protocol work? (https_://docs.perp.fi/getting-started/how-it-works)
  3. Audit Report (https_://docs.perp.fi/library/audit-report)
  4. Token distribution and vesting schedule (https_://gov.perp.fi/t/wip-updated-perp-token-release-schedule/13)

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

3 Likes

Hi! Exciting idea, let’s discuss it guys @Sergey @dae @DeFi @powerpoolAdmin

1 Like

I like perpetual protocol and I like this idea of adding it to pipt.

Perhaps it could be even added to a new index altogether, considering that in power index perp would occupy only 11.11% of the index. But with DAMM coming that might change.

Hey, great to see PERP here!

I am absolutely supportive for adding PERP in all kind of indexes. Thinking on the details

Disclaimer: I am a holder of PERP lol

2 Likes

@Sergey do you have your ideas to present on this now? If you have completed the analysis?