Overview

What is Perennial?

Perennial is a DeFi-native derivatives primitive that allows for the creation of two-sided markets that trade exposure to an underlying price feed in a capital efficient manner.

Perennial is live on Arbitrum & ETH Mainnet.

How does it work?

Perennial acts as a peer-to-pool derivatives AMM that perpetually offers to take the other side of any Taker’s position directly at the oracle price, in exchange for a funding rate that floats based on utilization of the liquidity pool (similar to Compound & Aave).

Takers (Traders) deposit collateral to get leveraged exposure to different price feeds (long, short, and exotic payoffs). Makers (Liquidity Providers) pool capital in the protocol to earn fees for taking the other side of Taker trades.

On a continuous, on-going basis, LPs and traders settle up; the losing side of the trade pays the winning side.

What makes Perennial Special?

Perennial is minimalist at its core, designed to be a low-level, unopinionated primitive that lays the basic infrastructure and leaves the rest up to market creators and participants to define/optimize.

Some things that make Perennial stand out:

• Zero price impact — trade directly at the oracle price, regardless of size

• Cash-settled — trades settled in $USD, not crypto, in line the most popular crypto derivatives

• Low fees — a hyperefficient protocol (in terms of mechanism deisng & capital efficiency) that minimizes fees for takers & makers

• Designed for the needs of Developers — not just another trading protocol; Perennial is built to be a composable primtive (low fee, fully-on chain, easy to integate)

• Customizable LP experience (both simple & pro) — Makers can LP with significant leverage (up to 50x) and can fully customize their risk exposure & hedging strategy (or lack thereof); Retail LPs can utilize vaults built on top that abstract complexity. Perennial makes very few assumptions about LPs at the protocol level, giving LPs full control.

• Permissionless — Permissionless market creation, integration, and composability.

To dive in Deeper, see the Mechanism section, or choose a section below.

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Market StructurePositions & PricingSettlementPayoffProfit and LossFunding Rate & Utilization CurveMaintenance (& Leverage)LiquidationsFeesDSU