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Perpetual Protocol V2 released, updated token economic model

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This article aims to introduce the main content of the Perpetual Protocol V2 - "Curie"

Original title: " Perpetual Protocol V2 "Curie" officially released "

Original author: Perpetual Protocol

Perpetual Protocol Perpetual Protocol V2—— "Curie" officially released

Perpetual Protocol V2—

After the main network of the perpetual protocol has been running smoothly for more than half a year, the perpetual protocol officially announced the new version "Curie". Chapters, with the characteristics of enhanced scalability, liquidity aggregation, free market creation, etc., provide users with comparable centralized Exchange new generationDeFi Derivatives experience.

Naming Explanation: The many creations of the Curie couple in the field of science are the foundation of modern science and physics. We hope that the name "Curie" will last forever Protocol V2, in the hope that the perpetual protocol can become one of the basic protocols of the future DeFi world.

Previous article: Attack V1

From December 15, 2020, the main Since the online launch, the transaction volume has gradually increased, achieving a total transaction value of 19 billion US dollars in 197 days.

Perpetual Protocol V2—

on-chain Perpetual contract derivatives account for more than 80% of the transaction volume (data from Token Terminal)

Perpetual Protocol V2—

In the past few months, the perpetual protocol has iterated several important updates to ensure the robust growth of the protocol.

Partial clearing mechanism
New on the weekly trading market
Staking system is online
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New chapter: "Curie" - the final puzzle of DeFi derivatives

As the frequency of activities on the chain increases, higher requirements are placed on the composability, scalability, and ease of use of derivatives on the chain , Perpetual Protocol V2, will meet these needs. At the same time, as the original agreement of vAMM, the perpetual agreement V2 retains the ability to trade including digital Currency/The characteristics of any asset including stocks/commodities.

Overview of "Curie"

DeFi user experience from the future

"Curie" will be fully deployed on Layer2 Arbitrum , will provide a faster, cheaper and more reliable transaction experience than the layer-1 network.

In addition, "Curie" will use the joint margin model, and will add a variety of margin assets in subsequent updates.

More gathering

"Curie" will be a lighter protocol, we will couple transaction execution in Uniswap V3 to provide more centralized liquidity . The updated vAMM will mint vTokens for pending orders (makers) and traders (traders), which are used to place range liquidity and execute buy and sell transactions, respectively.

Everyone Have the authority to create markets

All new markets will use Uniswap as the transaction layer and apply Chainlink as an oracle, PERP stakers will be able to have more choices in this function and obtain higher rights and interests.

"Curie" Roadmap

v2.0 testnet
v2.1 mainnet online & default Market Making Strategy
v2.2 Limit Order & Liquidity Mining
v2.3 Multi Margin Assets
v2.4 does not need to create new markets

More aggregated liquidity

The liquidity dilemma is a problem for all DeFi protocols. The consequence of insufficient liquidity is that users have to accept higher Slippage, because the liquidity of the perpetual protocol v1 is evenly dispersed on the definite product curve, it also faces similar problems.

The subversive innovation of "Curie" is the key to getting rid of liquidity dependence, which can greatly improve the efficiency of capital use: the perpetual agreement The vAMM model is coupled with Uniswap V3, the economic model and mechanism logic are placed on the perpetual agreement, and the transaction execution layer is carried out through Uniswap V3. With the help of Uniswap V3's efficient use of funds, this innovation will enable the maker of the perpetual agreement (ie maker, hereinafter referred to as maker) to place liquidity in a more concentrated range, thereby obtaining higher service fee points. Run. At the same time, because of the improved composability brought about by Uniswap V3, the perpetual agreement will also have the opportunity to be combined with more strategic market-making agreements.

In addition, in "Curie", "Leveraged LPs" (leveraged LP) is another major innovation, and the maker can place them in segments according to their preferences The leveraged liquidity is undoubtedly an excellent tool for users who have higher requirements for liquidity strategies.

Perpetual Protocol V2 -

Similar to Perpetual Protocol V1, the most important protocol component in "Curie" is still Clearing House, users will be able to leverage collateral assets to mint vToken virtual assets to provide liquidity or trade according to risk preferences. Taking the deposit of 100USDC as an example, 1000vUSDC can be minted by increasing the leverage by 10 times. If the user wants to provide liquidity as a maker, he can divide v1000USDC into 500vUSDC and 0.25vETH (assuming that ETH is now worth 2000USDC) and place it in the desired vUSDC-vETH The interval on the corresponding definite volume curve in the liquidity pool.

Similarly, if the user wants to trade as a trader, he can use any amount in 1000vUSDC to buy long or sell short.

This means that the user role of "Curie" is no longer single only to operate according to the current market price to earn directional profits, but can also be based on Become a maker based on your own strategy and risk preference, and earn transaction fees and some directional profits in market making.

Cross-margin&multi-assets collateral

Combined margin mode means users can use Wallet address balance Open multiple positions in multiple markets at the same time. The multi-margin asset function will be added in v2.3. For example, users can use ETH as margin to open short or long positions. BTC (or any asset) - positions in the USDC market. The following is a simple example*:

Alice uses ETH as collateral to open a long position in the BTC-USDC market. When BTC rises, Alice who closes the position at this time will get more USDC. When BTC falls, Alice who closes the position at this time will not get more ETH than when she opened the position.

*Detailed description of the mechanism and principle, please pay attention to the follow-up document update of the Perpetual Protocol.

Create new trading markets without permission

When "Curie" is updated to v2.4, anyone will be allowed to participate in the creation of the market provided that a certain amount of PERP Staking is met In Zhonglai, in addition to maker and trader, the platform has added a new role of non-access market owner. This means that as long as any target can be price-fed by Uniswap V3’s TWAP or Chainlink, it will be recognized as a target that can open a new market in the “Curie” system.
"Curie" will support contract transactions including but not limited to stocks/commodities/precious metals and other targets.

In addition, the creator of the market can even decide the settlement currency unit of each market, in non-Stable currency When used as a settlement currency, it will provide users with better convenience.

Token economic model update

Due to the iteration and update of the mechanism, in In the perpetual agreement V1, the variable income growth of the agreement is too large, which leads to the delay in the progress of the fee distribution. However, in "Curie", the method and proportion of the fee distribution will be determined by the governance. The implication is that under the new mechanism , we are very confident that once "Curie" is launched, we can start the fee sharing as soon as possible.

In addition to being able to obtain open market handling fees, by Perpetual DAOThe market deployed will share the commission with the PERP Staker, which generally consists of three parts

Open market transaction fees
New markets created by users
Proceeds from funds retained in Clearing House Vault and Insurance Fund lent through mainstream lending agreements

With the increasing liquidity and trading volume of Uniswap V3, third-party single-currency market-making strategies around it are also emerging. For "Curie", we will also actively Carry out strategic cooperation with relevant leading agreements to provide optimal strategies for makers who want to make markets in "Curie" to ensure income.

The following flow chart describes how we will share the commission in "Curie",

Perpetual Protocol V2 -

Makers play a key role in the system, so in We will consider tilting towards the maker to a certain extent when sharing platform fees. The official ratio and figure will be determined and synchronized to the community before and after the official launch of "Curie".

In addition, in view of the characteristics of "Curie", the robustness of the perpetual agreement itself will no longer depend too much on the robustness of the Insurance Fund, unless in the event of When an extreme black swan event occurs, the amount of funds in the Insurance Fund will decrease, otherwise it will continue to grow theoretically. Therefore, when "Curie" is launched, the pink target ratio of Insurance Fund (the ratio of the current opening amount to Insurance Fund) will be set at 0%, so that once the protocol starts V2, users will clearly know when they can start Get dividends.

The above is the main content of Perpetual Protocol V2, detailed operating principle/mechanism/functional characteristics/economic model/token model, etc. It will be gradually updated in the official documentation of the perpetual agreement.