PERPETUAL-PROTOCOL

    Perpetual Protocol functions as a decentralized exchange (DEX) on Optimism, an Ethereum Layer 2 network, specializing in perpetual futures. A user swaps assets like Bitcoin (BTC) and Ethereum (ETH) with up to 10x leverage directly from their wallet, using a secure, intermediary-free platform for derivatives trading.

    History and Background

    Founded in 2019 in Taiwan by a team led by Yenwen Feng, initially named Strike, Perpetual Protocol rebranded in 2020 to focus on perpetual futures. It raised $1.8 million in August 2020 from investors like Multicoin Capital and Binance Labs. Launched on xDai in December 2020, it transitioned to Perp v2 on Optimism in 2021, adopting a Uniswap v3-based model. By 2025, it remains a key DeFi player, with a peak daily trading volume of $150 million in early 2025.

    Perpetual Protocol’s Global Presence and Reputation

    Perpetual Protocol exchange is available worldwide, excluding few restricted states like the United States due to regulations. It ranks 525th in the crypto market with a $73.3 million market cap and $9.16 million daily trading volume, showing modest activity compared to major platforms like Uniswap. It is praised for low-slippage trading and accessibility but faces challenges from past v1 insurance fund issues.

    Why Perpetual Protocol Matters?

    Perpetual Protocol excels with its Uniswap v3-based model, offering deep liquidity and low fees for futures trading. Its integration with Optimism ensures fast, cost-effective transactions, while the PERP token empowers governance, making it a compelling choice for DeFi derivatives traders.

    Key Features of Perpetual Protocol

    Perpetual Protocol provides essential tools:

    • Perpetual Futures Trading: Trades over 17+ markets like BTC, ETH, SOL, and LINK with up to 10x leverage for higher gains.
    • Low Fees: Provide low fee from 0.005% to 0.1% per trade, keeping costs minimal in DeFi.
    • Uniswap v3 Model: Gains from focused liquidity, offering accurate prices and low slippage for smooth trades.
    • Multi-Collateral Support: Accepts USDC, ETH/WETH, and FRAX as margin.
    • Gas-Free Deposits: Supports deposits over 500 USDC without gas fees.
    • Staking Rewards: Offers PERP and USDC rewards for liquidity providers.
    • Governance: PERP token holders vote on protocol upgrades.
    • Hot Tub Vaults: Yield-generating vaults for passive income.
    • Nekodex Integration: Enables gasless, cross-chain swaps for 100+ tokens.

    Getting Started on Perpetual Protocol

    Connecting a Wallet

    A user begins at app.perp.com by connecting an Ethereum-compatible wallet like MetaMask or WalletConnect. They select the Optimism network, authorize the connection, and access the platform without an account or KYC.

    Verification Requirements

    Perpetual Protocol requires no Know Your Customer (KYC) verification, allowing a user to trade anonymously, subject to compliance with local regulations in restricted regions.

    Securing the Wallet

    A user safeguards their funds by:

    • Storing their seed phrase securely offline.
    • Using a hardware wallet for large holdings.
    • Enabling wallet app security features like PINs.

    Navigating the Interface

    Perpetual Protocol’s interface is intuitive, featuring tabs for trading, liquidity provision, staking, and vaults. A user finds real-time market data and leverage options clearly displayed, simplifying futures trading for beginners.

    Funding a Perpetual Protocol Wallet

    Depositing Fiat Currency

    Unlike many exchanges that allow fiat deposits, Perpetual Protocol does not support direct fiat funding. A user buys crypto like USDC or ETH on a centralized exchange, such as Binance or MEXC, and transfers it to their wallet for trading.

    Depositing Crypto

    To deposit:

    • A user should open the wallet (e.g., MetaMask).
    • Select a token (e.g., USDC) and Optimism network.
    • Send crypto to their wallet address from another source.
    • Funds are available quickly due to Optimism’s speed.
    • Deposits over 500 USDC are gas-free, reducing costs.

    Understanding Deposit Networks

    Perpetual Protocol uses Optimism’s Layer 2 network for tokens like USDC and ETH. A user ensures the correct network to avoid transaction errors.

    Buying and Selling Crypto

    Executing Trades

    A user trades using the “Trade” tab:

    • Select a market (e.g., BTC/USDC).
    • Set leverage (up to 10x) and position (long or short).
    • Confirm, settling trades in USDC with low fees.

    Trading Mechanism

    Perpetual Protocol uses a concentrated liquidity model inspired by Uniswap v3, replacing the vAMM from v1. A user trades against liquidity pools, with prices set by market dynamics and collateralized positions.

    Order Types

    • Market Order: Executes instantly at the pool’s current price.
    • Limit orders are not supported, prioritizing simplicity.

    Managing Small Balances

    A user consolidates small balances by swapping them into USDC or PERP via integrated DEXs like Nekodex, incurring Optimism network fees.

    Perpetual Protocol Wallets Explained

    Wallet Structure

    Perpetual Protocol is non-custodial, relying on a user’s external wallet:

    • Trading Wallet: Holds collateral (USDC, ETH) for futures.
    • Liquidity Wallet: Stores LP tokens for pool contributions.
    • Staking Wallet: Manages staked PERP for rewards.

    Managing Funds

    A user transfers tokens within their wallet by specifying the recipient address and Optimism network. Funds remain under their control at all times.

    Withdrawing Funds from Perpetual Protocol

    Withdrawing Crypto

    To withdraw:

    • Users need to access their wallet.
    • Select the token, optimism network, and destination address.
    • Confirm, paying minimal optimism network fees.

    Converting to Fiat

    Users convert to fiat by:

    • Transferring tokens to a centralized exchange.
    • Selling for fiat and withdrawing to a bank.
    • The user must verify the network to prevent errors.

    Avoiding Withdrawal Issues

    • Wrong Network: Using non-optimism networks risks loss.
    • Insufficient Fees: Low ETH or USDC halts transactions.
    • Address Errors: User must confirm the recipient wallet.

    Perpetual Protocol Earn: Generating Passive Income

    User earn through:

    • Liquidity Provision: Adding assets to pools to earn 5,000 PERP weekly rewards per market, proportional to their contribution.
    • Staking: Locking PERP on Optimism to receive USDC fees and locked PERP weekly.
    • Hot Tub Vaults: Depositing into automated arbitrage vaults for passive yields without trading expertise. Users access these via the “Pools” or “Stake” tabs, noting risks like impermanent loss.

    Advanced Features (Optional for Beginners)

    • Nekodex Cross-Chain Swaps: Users trade 100+ tokens across chains gas-free via passkey login.
    • Concentrated Liquidity Strategies: users optimizes their returns by setting price ranges for liquidity provision.
    • Governance Voting: PERP holders propose and vote on protocol changes.
    • Multi-Collateral Trading: Users use USDC, ETH, or FRAX as margin. Beginners may focus on trading before exploring these tools.

    Perpetual Protocol Mobile Access Overview

    Perpetual Protocol lacks a dedicated app but is accessible via mobile browsers or wallet apps like MetaMask and WalletConnect. Users visit app.perp.com to trade on Optimism.

    Available Features

    • Futures trading with leverage
    • Liquidity provision and staking
    • Real-time market analytics

    Benefits of Mobile Access

    • Enables trading anywhere with wallet integration
    • Matches web functionality
    • Leverages Optimism’s low fees, though network costs apply for transfers

    Safety, Security & Support

    Security Measures

    Perpetual Protocol prioritizes safety with:

    • Non-Custodial Model: Funds stay in a user’s wallet, minimizing hack risks
    • Audited Contracts: Smart contracts verified by security firms
    • Insurance Fund: Covers potential losses, though v1 faced a $2 million shortfall in 2021

    Protecting Funds

    A user secures their wallet by:

    • Storing seed phrases offline.
    • Using reputable wallets like MetaMask.
    • Avoiding phishing sites mimicking perp.com.

    Support Channels

    Perpetual Protocol offers:

    • Help Center: Guides at support.perp.com.
    • Community Support: Discord and @Perpetual_DAO on X.
    • Governance Forum: For user feedback and proposals.

    Pros and Cons of Using Perpetual Protocol

    Pros

    • No KYC for anonymous trading
    • Low fees (0.005%–0.1%) and gas-free deposits over 500 USDC
    • Up to 10x leverage for futures
    • The uniswap v3 model ensures deep liquidity
    • Optimism’s speed enhances user experience

    Cons

    • Limited to 17+ markets, fewer than some DEXs
    • No spot trading, only derivatives
    • Past v1 insurance fund issues raise concerns
    • Restricted in major markets like the U.S

    Perpetual Protocol for Different User Types

    • Beginners: Gas-free deposits and simple interface ease entry.
    • Traders: Low-slippage futures and leverage suit active trading.
    • Liquidity Providers: Weekly PERP rewards attract earners.
    • DeFi Enthusiasts: Governance and Hot Tub vaults align with DeFi goals.
    • Cross-Chain Traders: Nekodex supports multi-chain swaps.

    Final Thoughts + Useful Resources

    Is Perpetual Protocol Suitable for a User?

    Perpetual Protocol is ideal for a user seeking a derivative’s DEX with low fees, up to 10x leverage, and Optimism’s efficiency. Its Uniswap v3 model and Nekodex integration enhance accessibility, but limited markets and past v1 challenges may concern some. Compared to ApolloX DEX, it offers lower leverage but broader DeFi integration.

    Next Steps

    A user can:

    • Try futures trading with USDC collateral
    • Stake PERP for rewards
    • Explore Hot Tub vaults for passive income

    Useful Resources

    • Official Website: perp.com for platform access and docs.
    • X Account: Follow @Perpetual_DAO for updates.
    • Support Portal: support.perp.com for guides.

    FAQs

    1. What does optimism bring to a user on Perpetual Protocol?

    Perpetual Protocol, built on Optimism, an Ethereum Layer 2, offers a user faster trades and lower fees than Ethereum’s mainnet, enabling cost-effective and efficient futures trading.

    2. What are Hot Tub Vaults, and how can a user earn from them?

    Hot Tub Vaults are automated arbitrage strategies on Perpetual Protocol where a user deposits assets like USDC to earn passive yields. Accessible via the “Vaults” tab, these vaults generate returns without requiring trading expertise, ideal for passive income seekers.

    3. Can a user trade cross-chain assets on Perpetual Protocol?

    Yes, a user trades over 100 tokens across multiple chains using Nekodex, Perpetual Protocol’s integrated cross-chain swap feature. Available through app.perp.com, it supports gasless swaps, broadening asset access for futures trading.

    4. How can a user participate in Perpetual Protocol’s governance?

    A user with PERP tokens votes on platform updates, like fees or new markets, via the governance portal. Staking PERP lets them shape the protocol’s future, supporting community-led growth.

    5. How does Perpetual Protocol’s multi-collateral feature help a user?

    Perpetual Protocol lets a user select USDC, ETH/WETH, or FRAX as collateral for futures trading in the “Trade” section. This choice allows a user to tailor their trading approach and manage funds more effectively.