PERP

Overview of PERP

Perpetual Protocol (PERP) is a decentralized finance (DeFi) protocol launched in 2020. It was co-founded by Yenwen Feng and Shao-Kang Lee. It functions on the Ethereum blockchain and is a system for the trading of perpetual contracts, which are agreements between buyers and sellers with no expiry date, hence enhancing flexibility in cryptocurrency trading.

PERP enables traders to long or short digital assets with up to 10x leverage, which has the potential to amplify their profits or losses. It operates on a virtual automated market maker (vAMM) model, which aims to facilitate trading by adjusting the price of digital assets based on supply and demand. Prices are synced with those on external markets using an oracle mechanism to decrease the risk of price manipulations.

The native token of the Perpetual Protocol is the PERP token, and it serves various functions within the protocols ecosystem including staking and governance. It is tradable on various cryptocurrency exchanges, such as Binance, Uniswap, and SushiSwap. MetaMask Wallet is one of the known wallets recommended for storing PERP tokens.

Pros and Cons

What Makes PERP Unique？

Perpetual Protocol (PERP) brings innovative features to the cryptocurrency landscape with its introduction of decentralized perpetual contracts. Perpetual contracts, a prevalent concept in traditional trading markets, have been implemented by the Perpetual Protocol in a decentralized finance setting, distinguishing it from many other cryptocurrencies that primarily function as a currency or a store of value.

The perpetual contracts on PERP do not possess an expiry date. This characteristic enables traders to hold long or short positions on digital assets for an indefinite period, thus providing more strategic flexibility compared to standard contracts that have a stipulated expiry.

PERP also utilizes a unique trading mechanism known as the virtual automated market maker (vAMM). Unlike typical AMMs that host liquidity pools backed by actual assets, vAMMs operate with a virtual liquidity pool. This means they can provide virtually unlimited liquidity and better capital efficiency. The vAMM system, combined with pricing through an oracle mechanism, offers a unique trading environment different from majority of the other digital asset trading platforms.

How Does PERP Work？

The PERP token is integral to the functioning of Perpetual Protocol as it allows users to participate in governance, staking, and trading on the platform. PERP holders can stake their tokens to become liquidity providers for the protocol's decentralized AMM, earning trading fees and PERP rewards. The token also allows holders to vote on platform changes and proposals. Furthermore, PERP is used as collateral by traders to open leveraged positions on Perpetual Protocol's perpetual swaps. More PERP is required as collateral for higher leverage. A portion of the fees generated from perpetual swaps trading goes towards buying back PERP tokens and distributing them as staking rewards. Thus PERP has utility and value accrual through enabling decentralized governance, staking incentives, fee buybacks, and collateralization on Perpetual Protocol

Exchanges to Buy PERP

Several cryptocurrency exchanges support buying Perpetual Protocol (PERP), these include:

1. Binance: Binance, one of the leading and largest cryptocurrency exchanges globally, supports PERP trading. Pairs available include PERP/USDT, PERP/BTC, and PERP/ETH.

2. Uniswap: Uniswap, a decentralized exchange built on Ethereum, presents the ability to trade PERP. The primary pair available is PERP/ETH.

3. SushiSwap: Another decentralized exchange on Ethereum, SushiSwap also supports PERP trading. The PERP/ETH pair is predominantly traded.

4. FTX: FTX is a cryptocurrency derivatives exchange that supports traditional cryptocurrency trading. The platform supports the PERP/USD trading pair.

5. Gate.io: Gate.io is a cryptocurrency exchange offering PERP trading. PERP/USDT is among the supported trading pairs.

How to Store PERP？

Storing PERP tokens requires a digital wallet that supports Ethereum based ERC-20 tokens since PERP is built on the Ethereum blockchain. Here are the types of wallets that you can consider for storing PERP:

1. Software Wallets: These wallets are programs that you can install on your desktop or mobile devices. A popular software wallet that supports ERC-20 tokens like PERP is MetaMask. MetaMask is a browser extension and mobile app that comes with an inbuilt swap feature and it's also widely used to interact with numerous DeFi platforms.

2. Hardware Wallets: Often considered the safest option, hardware wallets are physical devices that store your tokens offline. Examples include Ledger and Trezor, both of which support ERC-20 tokens including PERP.

Should You Buy PERP？

In terms of suitability, purchasing PERP could be of interest to various categories of individuals and organizations:

1. Traders interested in decentralized finance (DeFi) and derivative markets: Given PERP's functionality in allowing traders to hold short and long positions on various cryptos through perpetual contracts, it would be suitable for active traders looking to benefit from market volatility.

2. Crypto investors seeking diversification: For those already investing in various cryptocurrencies and seeking diversification within their portfolios, PERP could be an addition. Its unique perpetual contract feature and governance capabilities allow it to offer distinct advantages from typical cryptocurrencies.

3. Blockchain enthusiasts believing in the potential of decentralized finance: If you're supportive of the fundamentals behind DeFi and are confident in the future growth of the sector, investing in PERP could be a way to back this belief, given that PERP is a core participant in the space.