The Perpetual Protocol Curie version will be run on the second-tier Ethereum network Arbitrum, with features such as enhanced scalability, concentrated liquidity, and free market creation.
Written by: Perpetual Protocol
After the mainnet of the perpetual agreement has been running smoothly for more than half a year, the perpetual agreement officially announced the new version “Curie”. The official version of Curie will run on the second layer of the Ethereum network Arbitrum, opening a new chapter in the perpetual agreement. Features such as enhanced scalability, concentrated liquidity, and free market creation provide users with a new generation of DeFi derivatives experience comparable to centralized exchanges.
Naming description: The many creations of the Curies in the scientific field are the foundation of modern science and physics. We hope that the Perpetual Agreement V2 will be named after “Curie”, in the hope that the Perpetual Agreement can become one of the basic agreements in the future DeFi world.
Previous chapter: Attack on V1
Since the launch of the Perpetual Agreement V1 mainnet in December 15th, 2020, the transaction volume has gradually increased, achieving a total transaction volume of US$19 billion in 197 days.
Among the on-chain perpetual contract derivatives, it accounts for more than 80% of the transaction volume (data from Token Terminal)
In the past few months, the perpetual agreement has iterated several important updates to ensure the robust growth of the agreement.
- Partial liquidation mechanism
- New on the weekly trading market
- Staking system is online
- …….
New Chapter: “Curie”-The Final Jigsaw of DeFi Derivatives
With the increase in the frequency of people’s activities on the chain, higher requirements are put forward for the composability, scalability, and ease of use of derivatives on the chain. Perpetual Agreement V2 will meet these needs. At the same time, as the original agreement of vAMM, Perpetual Agreement V2 retains the characteristics of being able to trade any assets including digital currencies/stocks/commodities.
“Curie” overview
DeFi user experience from the future
“Curie” will be fully deployed on Layer2 Arbitrum, which will provide a faster, cheaper and more reliable trading experience than the first-tier network.
In addition, “Curie” will use a joint margin model, and a variety of margin assets will be added in subsequent updated versions.
More concentrated liquidity solutions
“Curie” will be a lighter protocol. We will couple transaction execution in Uniswap V3 to provide more concentrated liquidity. The updated vAMM will mint vTokens for the maker and the trader, which are used to place interval liquidity and execute buy and sell transactions, respectively. 🩱
Everyone has the authority to create the market
Therefore, in the newly created market, Uniswap will be used as the transaction layer and Chainlink will be used as the oracle. PERP pledgers will be able to have more choices in this function and obtain higher rights and interests.
“Curie” route map
- v2.0 testnet
- v2.1 Mainnet launch & default market making strategy
- v2.2 Limit Order & Liquidity Mining
- v2.3 Multi-margin assets
- v2.4 No need to create new markets
More concentrated mobility
The liquidity dilemma is a problem for all DeFi agreements. The consequence of insufficient liquidity is that users have to accept higher slippage in transactions. Because the liquidity of perpetual agreement v1 is evenly dispersed on the definite volume curve, they also face Similar problems.
The disruptive innovation of “Curie” is the key to getting rid of liquidity dependence, which can greatly improve the efficiency of capital use: the vAMM model of the perpetual agreement is coupled with Uniswap V3, and the economic model and mechanism logic are placed on the perpetual agreement. The execution layer of transactions through Uniswap V3. With the efficient use of funds in Uniswap V3, this innovation will enable perpetual agreement holders (ie maker, hereinafter referred to as maker) to place their liquidity in a more concentrated range, thereby obtaining higher commission points. Run. At the same time, because of the improved composability brought by Uniswap V3, perpetual agreements will also have the opportunity to be combined with more strategic market-making agreements.
In addition, in “Curie”, “Leveraged LPs” is another innovation. Makers can place leveraged liquidity in segments according to their preferences. For those users who have higher requirements for liquidity strategies, In other words, it is undoubtedly an excellent tool.
Similar to the perpetual agreement V1, the most important agreement component in “Curie” is still Clearing House, and users will be able to leverage their collateral assets to cast vToken virtual assets to provide liquidity or conduct transactions in accordance with their risk preferences. Take depositing 100USDC as an example, a 10 times leverage can be used to mint 1000vUSDC. If a user wants to provide liquidity as a maker, he can divide v1000USDC into 500vUSDC and 0.25vETH (assuming ETH is now worth 2000USDC) and place it in the vUSDC-vETH that he wants to place. The corresponding interval on the fixed product curve in the liquidity pool.
In the same way, if the user wants to trade in the role of the trader, he can use any amount in 1000vUSDC to open long or open short.
This means that the user role of “Curie” is no longer single and can only operate based on current market prices to earn directional profits, but can also become a maker according to one’s own strategy and risk preference, earning trading procedures in market making Fees and some directional profits.
Joint margin model and multi-margin assets (Cross-margin&multi-assets collateral)
The joint margin model means that users can open multiple positions in multiple markets at the same time using the wallet address balance on “Curie”. The multi-margin asset function will be added in v2.3. For example, users can use ETH as margin to open short or long BTC (or any asset)-USDC market positions. The following is a simple example*:
Alice uses ETH as collateral to buy and open long in the BTC-USDC market. When BTC rises, Alice who closes the position will get more USDC. When BTC goes down, Alice who closes the position will not get more. More ETH than when the position was opened.
Create new trading markets without permission
When “Curie” is updated to the v2.4 version, it will allow anyone to participate in the creation of the market, provided that a certain amount of PERP staking is met. In addition to the maker and trader, the platform adds non-access market ownership The new role of the author. This means that as long as any subject can be priced by Uniswap V3’s TWAP or Chainlink, it will be recognized as a subject that can open a new market in the “Curie” system.
Of course, as stated at the beginning, as the creation agreement of the vAMM mechanism, virtual AMM means that the system is not restricted by the liquidity of real assets. In the future, “Curie” will support the transaction of underlying contracts including but not limited to stocks/commodities/precious metals.
In addition, the creator of the market can even determine the settlement currency unit of each market. When non-stable currencies are used as the settlement currency, it will provide users with better convenience.
Token economic model update
Due to the iteration and update of the mechanism, in the perpetual agreement V1, the variable of the agreement revenue growth is too large, which has caused the delay in the progress of the fee sharing. However, in the “Curie”, the method and ratio of the fee sharing will be determined by governance , The implication is that under the new mechanism, we are very confident that once “Curie” goes online, we can start the fee sharing as soon as possible.
In addition to the open market fees, the markets deployed by Perpetual DAO will share the fees with the PERP Staker. The total is composed of three parts
- Open market transaction fees
- New markets created by users
- Proceeds from lending through mainstream lending agreements through funds held in Clearing House Vault and Insurance Fund
With the increasing liquidity and transaction volume of Uniswap V3, the third-party single-currency market-making strategy generated around it has also emerged. For “Curie”, we will also actively cooperate with relevant head agreements. To provide the best strategy for the makers who want to make market in “Curie” to protect their profits.
The following flow chart describes how we will share the handling fee in “Curie”.
Makers play a key role in the system. Therefore, we will consider leaning towards the maker to a certain extent when sharing platform fees. We will determine the official ratio and number before and after the official launch of “Curie” and synchronize it with the community.
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 the amount of funds in the Insurance Fund decreases in the event of an extreme black swan event, theoretically Will maintain continuous growth. Therefore, when “Curie” is launched, the pink target ratio of Insurance Fund (the ratio of the current open position amount to the Insurance Fund) will be set at 0%, so that once the agreement starts V2, users will clearly know when they can start Get dividends.
The above is the main content of Perpetual Protocol Perpetual Protocol V2. The detailed operating principle/mechanism/functional characteristics/economic model/token model will be gradually updated in the official document of the Perpetual Protocol.
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