What is Perpetual Protocol?
Perpetual Protocol is a decentralized finance (DeFi) platform that facilitates the trading of perpetual futures with high leverage. Launched in 2020 by Yenwen Feng and Shao-Kang Lee, the protocol was initially part of the Binance incubator program. It has since evolved to become a major player in the DeFi space, offering traders the ability to leverage up to 10x or more on various crypto assets such as BTC and ETH.
Perpetual Protocol operates on Optimism, an Ethereum Layer 2 scaling solution, which enhances the platform's efficiency by reducing transaction fees and latency. The platform employs a virtual automated market maker (vAMM) inspired by Uniswap’s AMM model. This design ensures deep liquidity and allows users to trade without the need for traditional order books.
The PERP token, native to Ethereum, serves multiple functions within the ecosystem. It is used for staking, where users can lock their tokens in smart contracts to earn rewards and collect a portion of trading fees. Additionally, PERP is crucial for community governance, enabling holders to participate in decision-making processes through the Perpetual Protocol DAO.