What is Perpetual Protocol (PERP)?

TLDR Perpetual Protocol (PERP) is a decentralized derivatives exchange enabling leveraged trading of perpetual contracts via virtual liquidity pools, prioritizing non-custodial access and on-chain execution.

1. Decentralized perpetual futures platform – Trade assets like BTC/ETH with up to 10x leverage.
2. Virtual AMMs for liquidity – Uses algorithmic pricing instead of traditional order books.
3. PERP token governance – Holders govern protocol upgrades and earn fees via staking.

Deep Dive

1. Purpose & Value Proposition

Perpetual Protocol solves centralized exchange risks (custody, opaque pricing) by offering a decentralized platform for perpetual contracts—derivatives without expiration dates. Traders retain asset control via non-custodial wallets, while its virtual Automated Market Makers (vAMMs) provide predictable liquidity (CoinMarketCap).

2. Technology & Architecture

The protocol uses vAMMs, which simulate liquidity pools without requiring actual asset deposits. Unlike Uniswap’s AMMs (for swaps), vAMMs focus purely on price discovery for leveraged positions, enabling shorting and reducing slippage. It operates on Ethereum for security and xDai (now Gnosis Chain) for low fees, with all trades settled on-chain.

3. Tokenomics & Governance

The PERP token (150M max supply) powers governance and staking. Stakers secure the network and earn a share of protocol fees (paid in stablecoins) and inflationary PERP rewards. This aligns incentives between traders, liquidity providers, and token holders.

Conclusion

Perpetual Protocol reimagines derivatives trading by combining decentralized custody with scalable virtual liquidity pools. As competitors like Drift Protocol adopt hybrid models, can PERP’s vAMM-centric design maintain its edge in DeFi’s evolving derivatives landscape?