Following the hype surrounding the derivatives exchange HyperLiquid, the community began searching for similar projects, including Perennial. So what is Perennial? How does Perennial’s model work? Let’s explore the features of the Perennial exchange.
What is Perennial?
Perennial is a decentralized derivatives exchange (Perpetual DEX) built on the Arbitrum network. Perennial’s goal is to provide users with a capital-efficient derivatives product featuring low slippage, low transaction fees, and high liquidity.
Currently, Perennial is running a trading program to earn airdrop reward points. The higher the points, the greater the chance of receiving an airdrop.
Perennial’s Products
Currently, Perennial offers three main products:
Markets
This is Perennial’s core product, allowing users to trade futures with various types of assets, from BTC to fiat currencies (YEN, EUR, etc.). The difference between Perennial’s derivatives product and regular futures exchanges lies in the Net Longs mechanism.
Specifically, Net Longs utilizes the liquidity provided by Liquidity Providers (LPs) to offset the liquidity between the Long and Short “sides.” For example, if the platform has $1 million in Long positions and $800,000 in Short positions, Perennial will use $200,000 from the LPs to balance the liquidity between the two “sides.”
The advantage of the Net Longs model is that it optimizes capital efficiency for LPs, instead of using all the capital to secure all Long and Short positions. Additionally, Net Longs allows users to trade with low fees and stable funding rates.
However, the disadvantage of this model is that it is only effective when the market is not experiencing significant volatility and the platform maintains high liquidity.
Vault
This product allows users to provide liquidity on the Perennial platform in return for trading fees. According to the project team, Perennial’s liquidity provision model follows an Isolated Risk approach, meaning that LPs receive trading fees and bear the risk associated with the type of asset they provide.
Currently, Perennial’s Vault is divided into two types:
- ETH Vault: For individuals providing liquidity for ETH or assets within the ETH ecosystem.
- BTC Vault: For assets within the Bitcoin, Solana, and Polygon ecosystems.
Furthermore, Perennial also supports a mechanism for adding liquidity in specific assets, instead of using the Vault. With this mechanism, liquidity providers can even use leverage to add liquidity.
Intent
This is a smart contract that can change an investor’s position, with the aim of optimizing the user’s capital. According to the project team, when a user signs a transaction and collateralizes assets with Intent, the system will rely on trading fees and liquidation prices to continuously restructure the user’s position, thereby improving capital efficiency.
Perennial’s Team, Investors, and Partners
Project Team
The team behind Perennial is composed of experienced members in the crypto market. They include:
- Arjun R: Co-Founder of Perennial. Previously, he was an engineer at various large companies such as Airbnb, Coinbase, Sift Science, etc. He is also the Co-Founder of the Astro Wallet project.
- Kevin Britz: Co-Founder of Perennial. Similar to Arjun R, he is the Co-Founder of Astro Wallet and has also worked as an engineer at Airbnb, Coinbase, etc.
Investors and Partners
Currently, Perennial has undergone two funding rounds with a total amount of $12.6 million. Specifically:
- December 7, 2022: Perennial successfully raised $12 million in a Seed round, led by Polychain Capital and Variant. This funding round also saw participation from Coinbase Ventures, Robot Ventures, etc.
- October 13, 2023: Perennial received a grant from the Arbitrum Foundation, amounting to $603,000.
Similar Projects
- Vooi: A Perpetual DEX Aggregator platform that aggregates and connects liquidity from various Perpetual DEXs across different networks.
- Blitz: A decentralized derivatives exchange on the Blast network. The highlight of the platform is that Blitz can connect liquidity with the Vertex exchange on the Arbitrum network.
