The Perpetual Protocol (PERP) has changed its rank to the top #134 cryptocurrencies in the world. The PERP is near its support with a market cap of around $379,321,951. Among all cryptocurrencies, the chart of PERP is interesting. It is not the most hyped cryptocurrency like Bitcoin, but it is still interesting. Let us look into this underrated crypto and find out what it is and how it works.

Perpetual Protocol Overview

Cryptocurrency Perpetual Protocol
Ticker Symbol PERP
Price $1.23
Price Change 24h +9.42%
Price Change 7d +11.32%
Market cap $101,072,378
Circulating Supply 76,475,000 PERP
Trading Volume $23,079,075
All time high $24.84
All time low $0.6552
Perpetual Protocol ROI -31.2%

What is Perpetual Protocol?

In late 2019, Perpetual Protocol (PERP) was launched under the name of Strike Protocol. At the heart of Perpetual Protocol is the decentralized exchange (DEX) based on Ethereum and xDai. PERP is a decentralized perpetual contract protocol for every asset, made possible by the vAMM, which stands for Virtual Automated Market Maker.

Financers can trade using the Virtual Automated Market Makers directly without relying on the counterparties. The vAMM provides guaranteed liquidity with predictable pricing set by product curves. These are also designed to allow collateralized trading and to remain market neutral. Perpetual Protocol holders can become stakers by staking their PERP tokens to a Staking Pool. For this, the holders are rewarded with a portion of the transaction fees as stable coins plus the staking rewards in PERP.

Perpetual Protocol (PERP) also has a utility token with the ability to incentivize its structures and create an engaging community for its users, allowing the governance of the protocol development in a decentralized manner. The project goal of the creators is to create the most accessible and secure decentralized platform for derivatives trading. Perpetual Protocol uses the constant-product curve in their AMM for price discovery to handle leverage and shorts position. This is different from how Uniswap and Balancer use their Automated Market Makers (AMMs) for price discovery and token swaps. Because of this difference, PERP distinguishes itself and thus calls their AMM as Virtual AMMs.

How Does Perpetual Protocol Work?

The Perpetual Protocol aims to allow anyone to use its perpetual contracts protocol. With this, it will trade with low slippage and good liquidity using its innovative Virtual AMMs based exchange. The developers are also using its scaling blockchain technology known as xDai, which will enable it to increase the speed of trades compared to other Ethereum based exchanges while offering zero gas fees on all of the trades in the crypto and blockchain industry. The trades on Perpetual Protocol are settled in USDC, meaning all collateral used on the exchange is in USDC.

Using its streamlined architecture to allow to invest and gain the benefits of xDai scaling technology, Perpetual Protocol (PERP) allows traders to jump in without facing the hassle of creating their wallets. Simply by using one’s existing wallet to deposit ISDC via their trading interface, the users can trade actively. The user’s funds are controlled by their Metamask wallet or another compatible wallet during the process.

On Perpetual Protocol, stakers enjoy zero impermanent loss risk while earning rewards and fees for their staked PERP tokens. The staked PERP tokens are not stored on vAMM or used for liquidity; instead, the tokens are stored safely in the intelligent contract vault, not a liquidity pool. Therefore the staked PERP tokens are not exposed to the impermanent losses.

The official website of Perpetual Protocol (PERP) is detailed-explaining how it exactly works and the features of PERP that users should know. To trade perpetual contracts on the decentralized platform are not that different from platforms on a centralized exchange. It has two differences. One is that Perpetual Protocol does not use an order book, i.e., trades are filled right away as it is placed. There is no need to wait for a counterparty. Second, trades are settled somewhat slower than on the centralized exchanges. This is more likely during high-volume periods. PERP uses mitigation techniques to provide slippage controls and allow PERP trades operations to be conducted on xDai, significantly faster than the Ethereum base layer.

Perpetual contracts are classified as a type of futures contract. It allows traders to speculate on the future price of an asset by either going long or short on perpetual futures contracts. Unlike the typical futures contracts, perpetual contracts do not have an expiration date, which means that the position will remain effective until the speculator closes the position. Although trading can result in financial loss, with Perpetual Protocol, the speculator is assured that they will never lose more than their initial investment. Even though this is a system feature, investors alike should conduct their own research before entering any derivatives markets or dealing with financial instruments.

PERP Token Overview

PERP is the Perpetual Protocol’s native token, a standard ERC-20 token on Ethereum, and DAO issues it. The PERP token is primarily a utility token designed to facilitate and incentivize the decentralized governance of the protocol. By this, the holders of the PERP tokens gain voting rights proportional to their holding of the token. It has three use cases: Governance, Staking, and Exchange backstop.

In the Staking use case, the holders of PERP tokens can lock up their PERP for a fixed amount of time in the Staking Pool. After this, they gain rewards for staking and increasing market participation. In extreme events, such as when the exchange insurance fund is depleted, the PERP tokens may be sold at the markets to make up for the shortfall. The PERP holders also gain governance rights after staking their tokens. The holders can use PERP tokens to vote on or propose new ideas that can be used to improve Perpetual Protocol. This helps decentralize the governance and makes it more democratic like the real world.

Perpetual Protocol (PERP) has also introduced an insurance funds feature. This is the first line of defense in the event of unexpected losses. These might result either from losses in the liquidation process or the inability of the investors to fund their position payments. This fund accrues through the protocol used, where 50 percent of the transaction fee is deposited. If the Insurance fund is depleted, a smart contract will be triggered, mint new PERP, and immediately sells those PERPs for collateral in the vault to protect the system solvency.

Market Sentiment for Perpetual Protocol Forecast

While Decentralized exchanges like Uniswap and Synthetix inspired Perpetual Protocol (PERP), it is not meant for sports trading. Instead, it is designed for leveraged styles to maintain short positions while offering low slippage. The team is also preparing for Perp v2 and will enter the NFT territory. The total number of NFTs is supposed to be 100 when writing this article. With an active development team and community, Perpetual Protocol is quite active and is launching new products and features all the time.

Perpetual Protocol also gained the most considerable decentralized PERP exchange rank by daily volume, capturing about 80 percent of the share in June of this year. The team also launched a Perpetual Ecosystem Fund. The PERP Ecosystem Fund is backed by a $3 million PERP token value which roughly means it is worth $30 million. By enabling tokens to be held mutually, they will speed up the integration with other token swaps projects. The project’s development is quite active, and we would like to see this participation and activity continued by the developers. It is becoming rather popular by unveiling more initiatives that aim to support early-stage and emerging DeFi projects. And this will be a good return for the long term for the Perpetual Protocol Ecosystem.

Perpetual Protocol (PERP) Technical Analysis

During the last year, the daily trading volume of Perpetual Protocol was picking up day by day as massive crypto market participation followed. If we look at the current price scenario, it would be highly volatile if a breakout occurs. So, for the time being, it is wise to be patient and wait for the breakout to occur naturally over time. This gradual growth trajectory will reward investing time, allowing them a good entry position.

Perpetual Protocol Price Prediction

The price levels of Perpetual Protocol have gone down continuously since December 2021. The Perpetual Protocol price broke in the last May, but there was no significant volume price action. Afterward, in the latter half of June, the PERP’s price breaks, forming a new low around the $4 price drop level, which showed a bearish signal. The price soon followed a strong trend which sent the price upwards. This strong buy Perpetual Protocol sentiment combined with massive price volume action was observed twice in July 2021. The Bollinger Bands show that the volatility has significantly risen in the above daily time frame chart since its inception, and the current market volatility is also relatively stable. Considering that there has been substantial selling pressure happening in the PERP over the past few months. Based on the current price trend and our investment advice, the PERP coin has the potential to be a good option if invested at the lower levels.