Introducing Perp V3: The Smart Liquidity Framework for Derivatives


Perpetual Protocol has been in build mode throughout the entirety of 2023 and rest assured, we have ZERO intentions of slowing down! As one of the earliest pioneers in the DeFi space, we’ve learned invaluable lessons in our relentless pursuit of innovation and security through each iteration, from Perp V1 to V2 and now … V3.

While Perp V1 exemplified the pioneering spirit with its cutting-edge vAMM, Perp V2 brought stability and composability to on-chain perps. Along this journey, we’ve also maintained an impeccable track record — knock on wood — of never experiencing a single security breach. And now, with immense enthusiasm, we proudly introduce: Perp V3.This latest version marks a pivotal moment as we unveil a Smart Liquidity Framework for on-chain derivatives and a huge upgrade to provide a streamlined user experience.

The Problem

In our quest to create the ideal perpetual futures platform, there are three key things that we wanted to solve for in the new design of V3:Poor UX for Pros and Noobs Alike: User experience across the DeFi world is plagued by unintuitive designs, cryptic error messages, unpredictable outcomes, and more. Even seasoned DeFi users aren’t immune to the poor UX. The steep learning curve has discouraged new users from entering the DeFi space. And to be honest, Perp V1 and V2 did not do nearly enough to improve the situation.

Providing Liquidity Is Hard — Most products currently rely on a single strategy which doesn’t adapt to market conditions. Strategy that works in low volatility environments may not work in higher volatile or up/down only environments. Additionally, providing liquidity on Perp V2 (built on Uniswap V3) was too hard for LPs given the constraints imposed on LPs.Future Proofing Protocol — Transitioning between versions often required a complete system overhaul each time (Perp V1→V2). This approach of full rebuilding from scratch, while thorough, it’s not sustainable for future scalability and agility. Recognizing this, we want to design a modular system that is future-proofed.

The Solution

Streamlined UX — A Breath of Fresh Air:

First off, we’re committed to making Perp V3 the go-to for DeFi newbies. Think of it as trading on a CEX, but you’re actually in the DeFi world. It’s about making things so seamless, you’ll wonder why it was ever hard. Here we focus on three key areas: security, onboarding, and an all-in-one stop.

Enhanced Security: Perp V3 introduces biometrically secured wallets — think fingerprint or FaceID, powered by industry-standard Passkey. Just like how Apple and Google keep your phone locked down tight. No more private key-loss nightmares. Plus, the Perp team has been in the DeFi game since day one, the team is doxxed, and we are highly committed to integrity and user safety. Trust is built into every aspect.

Seamless Onboarding Experience: With V3, stepping into Web3 will be as easy as signing in with email or social accounts–desktop and mobile included. No more browser extensions, no more endless approval signings for every transaction. A one-click approach that mirrors the ease of CEX but with the advantages of DeFi.All-in-One Platform: Perp V3 is more than a trading platform–it’s a complete crypto experience. Aside from increasing leverage to up to 50x and offering a range of advanced tools (limit orders, take profits, stop losses and more), V3 also offers low-risk earn products and educational resources, providing everything for beginners to kickstart their crypto journey.

Smart Liquidity Framework — The Game-Changer in Perp V3

At the heart of Perp V3’s innovation lies the Smart Liquidity Framework — the modular system meticulously designed for flexibility and future-proof implementation. Imagine a LEGO set for LPs and a Swiss Army knife for builders — that’s what we’ve built.At its core, the Framework is versatile, designed to support any method for providing liquidity, as long as they can generate a price to be traded against, be it on-chain or off-chain. This includes models like XYK-style AMMs, RFQs, CLOBS and oracle-based strategies. We’re also actively developing unique strategies that, once refined, will be integrated seamlessly into this liquidity framework.

But here’s where it gets even more interesting — the unparalleled flexibility. Perp V3 users have the option to choose purely on-chain liquidity or a combination of both on-chain and off-chain solutions. This means retail traders can get the best orders through an efficient off-chain router. Projects can integrate directly with a variety of on-chain liquidity strategies and stay fully on-chain. The full range of products that can be built on top of Perp V3 truly cannot be imagined.The enhanced UX and liquidity flexibility of Perp V3 combine to let us mimic an off-chain order book experience but keep the trading real with on-chain settlement, while preserving composability through fully on-chain pricing.(A deep dive into the technicalities of the Framework will be shared soon.)

What’s Next

In summary, Perp V3 represents a significant leap forward in perpetual futures trading, offering liquidity providers and traders unmatched flexibility and adaptability.

Source : Medium by Perpetual Protocol / Jan 24, 2024 logo


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