- It's live now!
Is there a token? Where to buy?
What happened to Perp v1?
- v1 was closed in May 2022. More details can be found in project history.
If there a liquidity mining program for Perp v2?
Yes, liquidity providers can participate in our Pool Party to earn OP and PERP rewards every week.
Is there a testnet?
- Yes! testnet.perp.exchange (Testnet is used for active testing. There may be bugs, low liquidity, and variable UI uptime.)
Perpetual Protocol builds on top of Uniswap v3, learn more here.
Do we have to pay trading fees to Uniswap?
- No. On Perpetual Protocol v2 the protocol controls all tokens in the pools, so any fees paid by traders are earned by makers and it balances out.
Will Perpetual Protocol fork Uniswap v3?
- No, we are building on top of Uniswap - not forking or using their code.
Did Perpetual Protocol license Uniswap code?
- No, we are building on top - not using their code.
Can I trade perpetual contract tokens from Uniswap?
- No, all trades must be made via Perpetual Protocol or via other projects building on Perpetual Protocol.
Can I withdraw perpetual contract tokens from Uniswap?
- It’s not possible to withdraw or transfer tokens directly from Uniswap.
What happens if Uniswap turns on protocol fees?
- We will cross that bridge when we get there! However, since Uniswap v3 is used for accounting balances of derivatives contracts, it should be simple to accommodate for a protocol fee in the clearinghouse contract. For example, if the protocol fee is 5 bps (0.05%), Uniswap will take 0.05% of the traded tokens, and the clearinghouse will mint 0.05% extra tokens to return to the trader.
Chains & Rollups
What chain is Perpetual Protocol Curie (v2) on?
- We are on the Optimism rollup.
How do I bridge to Optimism?
How can I bridge from Optimism back to Ethereum mainnet?
- Use one of the recommended options on Optimism's ecosystem page.
How will Perpetual distribute its allocation of OP tokens?
- The allocation of OP tokens for Perp will be geared towards liquidity providers and builders, as outlined in our proposal on the OP governance forum. So far, we have airdropped 1.8 million OP tokens proportional to facilitated volume since launch to all historical LPs. Since July 18, our Pool Party initiative began to distribute 5,000 OP tokens per market per week to LPs based on how much volume they facilitate. A total of 5.2 million OP will be used to incentivise liquidity provision via the Pool Party initiative.
Will Perpetual Protocol launch on ____?
- Our current focus is on building on Optimism as our home base. It is possible that we explore cross-chain vaults in the future, but focusing liquidity on Optimism is our core strategy at this time.
Can collateral other than USDC be used?
- Yes, other than USDC we currently support ETH/WETH, FRAX, OP and USDT. A deposit cap for non-USDC collateral types is in place.
- Read this article to learn more about our multi-collateral feature.
- PnL will still be paid out in USDC.
Does Perp support limit orders and stop orders?
- Yes, advanced order types were released in July 2022. Traders can currently use limit orders and stop loss limit orders. Both order types come with the reduce-only option. Submitting a limit orders and liquidity provision are separate concepts on Perp v2, so the trading fee of 0.10% still applies to limits/stop loss limits.
Are trades affected by frontrunning, MEV, sandwich attacks, etc.?
- Optimism uses no mempool / hidden mempool (post-Bedrock) and therefore pre-knowledge of your trades is not possible. Optimism's roadmap includes decentralizing sequencer infrastructure that would make the mempool public, but there is no ETA for this as of Q4 2022.
How is the Mark Price determined? Why is there a difference between the mark price shown on the UI and under market trades?
- The mark price derived from the price the Uniswap pool returns to our contract is shown on the upper left-hand side of each of the markets page.
- The mark prices shown under market trades tab on the bottom right-hand corner displays the average price of that transaction (= positionNotional/positionSize), where the 0.10% trading fee is also included.
Why is my PnL instantly negative after entering a position?
- The PnL accounts for the trading fee, so even if the price doesn't change, the PnL for your position will be negative until the price moves in your favor enough to cover the trading fee paid. Also, each new position changes the price due to the way vAMMs work, where larger positions will experience significant slippage and small positions will experience very low slippage.
What is slippage?
- Perpetual Protocol markets are built on Uniswap v3 vAMMs (virtual Automated Market Maker). In order for trades to settle for a market, there needs to be liquidity provided for that market. The liquidity providers (LPs) are also referred to as market makers, as they make the markets and take the counterposition for every trade made in their range.
- The slippage depends on the amount of liquidity provided for a market and a lower liquidity will result in a higher slippage. Without going into the math behind slippage, at its simplest level it can be thought of similar to the spread between a bid and an ask price on order book exchanges, as this spread is deducted from your PnL.
How does funding work in v2?
- Funding works as expected, with longs and shorts exchanging payments according to the ratio of mark and index prices. In v2, the maker/taker model assures there will always be an equal number of longs and shorts. Unlike v1, where the ‘maker’ (ie. clearinghouse) was static, v2 makers will deploy strategic liquidity provision, further helping to drive the price toward index.
What is a funding rate? And how do I find the funding rate on Perp v2?
- The funding rate is a mechanism that keeps the mark price in line with the index price by incentivizing the opening of short or long positions. You can learn more about funding rate and payments here. The funding rate is displayed each market's page and you can also browse the historical funding rate by going to 'Funding Rate' on the top left-hand side of the trading chart.
When is funding settled?
- Funding payments are settled whenever you close or add to an existing position, or whenever you add or remove collateral. To check your pending funding payments, go to this page. There are more details here on how to manually settle your funding payments through EtherScan.
Can I mint v-tokens, wait for the price to change without opening a position, and then burn the tokens to earn a profit?
- The protocol includes a mechanism for preventing this case. When you mint v-tokens, e.g., vETH, an equal vETH debt is also registered in the clearinghouse. Based on this ratio of vETH to vETH-debt (1:1 as long as you don't make any trades), your 'free collateral' will be zero. In order to remove collateral, you will have to provide vETH to pay off the vETH-debt. So if you put in X USDC and mint Y vETH, the only way to withdraw your full amount of USDC is to first pay back the full amount of vETH. The amount of collateral you can withdraw is determined by the ratio of vETH/vETH-debt you have. If you make some trades and earn more vETH, you can remove more collateral than you put in (profit), and vice versa.
Do trades need counterparties?
- Yes and no. Like on Uniswap, you’ll need makers to provide liquidity in order to trade. However, your position will not depend on these makers - even if all makers withdraw liquidity, your position can remain open. It will mean, however, that there may not be enough liquidity to close your position at a reasonable price. Keep in mind that this is an extreme case and is highly unlikely to occur.
Will I be unable to close my position if makers withdraw all liquidity?
- If makers withdraw liquidity, price impact of trades will increase. It is possible that you may be unable to close a position at a reasonable level of price impact, however this is also highly unlikely as any maker who comes in stands to earn a lot of fees in this scenario.
Can my position be closed or auto-deleveraged if there is no counterparty available?
- No, your position is not affected by counterparties or makers (ie. liquidity providers) directly, however what could happen is the price impact of closing your position would be affected by liquidity being removed.
- As liquidity is removed, the price impact of closing your position would increase, reducing the amount of money you will receive.
- Note: In a severe event that depletes the protocol insurance fund, traders who profited may need to wait for the insurance fund to recover before they can withdraw profits.
If I have a position as a taker, can I use that position to be a maker?
- No, the protocol currently keeps taker maker orders separate.
How does shorting work under the hood?
- Traders place USDC in the clearinghouse, which issues v-tokens. For shorts, the clearinghouse will issue the trader the v-token corresponding to the token they want to short (e.g. vETH). This token will then be sold for vUSDC in the Uniswap v3 pool (e.g. vUSDC/vETH pool).
What happens if USDC loses its peg to the US Dollar?
Makers & Liquidity
Makers vs liquidity providers
- Makers are very similar to liquidity providers - they provide liquidity for perpetual contract trading. However there are some key differences. Makers can use leverage when providing liquidity, and makers will earn/pay funding depending on market conditions.
Will makers pay exchange fees?
- No, in fact makers will earn protocol fees. 80% of all trading fees generated are earned by LPs.
Why are makers needed?
- Bringing makers into the system allows v2 to have much more dynamic liquidity and makes the system more responsive to market conditions thanks to the ability of makers to express themselves through a diversity of liquidity provisioning strategies. This fixes issues with v1 caused by a static liquidity model that was rigid and unable to respond to market conditions.
What happens if makers remove liquidity?
- The slippage will increase. We will work with other protocols to create LP strategy vaults that will supply sufficient liquidity with a good distribution to prevent sudden slippage increment.
- Markets with low liquidity are more attractive to makers, since they are likely to receive a higher proportion of fees compared with high-liquidity markets.
Is there slippage for makers? How are prices determined when adding liquidity?
- There is no price impact when adding liquidity (oracle price is used).
- There may be slippage if other makers are adding / removing liquidity at the same time as you, or if trades cause the current price range to change. You can set the slippage tolerance to meet your needs.
As a maker, are there any restrictions on removing liquidity?
- No, you can add and remove liquidity any time, just like on Uniswap v3.
- Note: Removing liquidity may result in a permanent position (ie. taker position) that can be closed when desired.
Do makers have to provide 2 tokens?
- Makers only need to provide USDC or any of the supported non-USDC collateral types (e.g. ETH/WETH), which is used as margin to mint the virtual tokens used for perpetual contract trading.
Why is there a range for APR?
- There is a range in the APR for makers in each market based on how narrow or wide your price range is. A narrower price range will earn a higher APR in terms of fees and liquidity mining rewards, so the high end is for highly concentrated liquidity positions.
- The low end estimate indicates the APR for liquidity positions spread across the entire price curve and earn a lower amount in fees and liquidity mining rewards.
How will Perpetual Protocol attract liquidity?
- We expect that providing liquidity on Perpetual Protocol will be much more rewarding than on centralized exchanges thanks to the ability to earn protocol fees. In addition, we may offer liquidity mining rewards to attract liquidity (e.g. via 3rd party LP Strategy Vaults).
Do makers pay/earn funding?
- Yes, once liquidity is added and the price changes such that a maker has an impermanent position, you will pay or earn funding on that position according to the funding rate and whether you are long or short.
Is there impermanent loss (IL)?
- Yes, there is similar IL risk on both the downside and upside.
What is an impermanent position?
- As traders use an LP's liquidity to enter positions, the LP takes the other side of the trade. AS traders use up more of their liquidity, LPs take on an impermanent position which becomes larger as the price moves further away from their entry price. It is impermanent, since it is not until you remove your liquidity that the position becomes 'permanent'.
Can makers get liquidated?
- Yes. If the value of your liquidity (base + quote token) falls to a point near the value of your collateral, your liquidity will be liquidated.
What automated strategies will be available to makers?
- Makers can come up with an infinite number of strategies on their own, just like regular LPs on Uniswap, or they can use 3rd party strategy providers. Partnerships with providers are in progress and in theory any provider servicing Uniswap v3 LPs can easily port their service to Perpetual Protocol.
How do makers get v-tokens like vETH, etc.?
- Makers put collateral into the system, and the Perpetual Protocol contract clearinghouse mints and issues v-tokens to them (up to 10x, and possibly more if governance votes to increase the limit). V-tokens will be minted according to what token the maker wants to provide liquidity for. For example, 1000 vUSDC could be deployed as 0.25 vETH and 500 vUSDC (assuming an ETH price of $2000). These tokens are minted and placed into the Uniswap v3 pool by the clearinghouse. Makers also choose a price range for their liquidity according to the Uniswap v3 LP model, so liquidity would be provided using a single v-token if the price range is outside the currently active range.
How are v-token prices set?
- V-tokens such as vETH, vBTC etc., will be minted according to the 15-minute TWAP from the respective oracle (e.g., Chainlink).
Where can I simulate LP positions for v2?
- You can simulate LP positions with ComponentFi's PerpSim and DefiLabs' Perpetual Liquidity Strategy Simulator.
Can I stake PERP?
- Yes, you can stake PERP on Optimism here: https://token.perp.com/.
- PERP holders to earn a yield by locking PERP into vePERP. In December 2022, we launched the USDC fee distribution feature as part of Lazy River 2.0.
- Stakers can earn USDC from a share of the trading fees, locked PERP rewards and referral rewards every week.
- Learn more about our improved staking program, called Lazy River 2.0, here.
- Staking rewards in locked PERP are allocated to vePERP holders alongside the USDC fee distribution and the duration of these rewards are at the discretion of the team.
I have staked PERP on mainnet, what do I do?
- Staking rewards on L1 have been discontinued and have been replaced by Lazy River 2.0. Both staking and referral rewards now depend on your vePERP balance. Learn more about the new referral program here.
- Head to https://staking.perp.exchange/ and claim your rewards. Note that you'll need to claim separately from the vesting and non-vesting pools.
- After claiming any remaining rewards from the old staking program, unstake PERP.
- After unstaking, bridge PERP to Optimism to join Lazy River 2.0 and begin earning yield in USDC.