Perpetual Protocol V2 Goes Live On Optimism – Can PERP Give A Stiff Competition To DYdX?

Estimates suggest that the total notional market cap of the crypto derivatives market could be even higher than that of the spot markets due to the presence of various financial instruments such as options, futures, and perps that allow traders to make profits regardless of the market trend.

While centralized exchanges such as Binance, FTX, KuCoin, and others allow users to trade derivatives contracts, such platforms contain certain risks as well. Some of the risks associated with trading on centralized exchanges include the threat of exchange hacks, non-custody over the digital assets, and forced liquidation of open positions due to market manipulation.

As a result, the rise of decentralized leverage trading avenues has been far from surprising. In 2020, we saw the rise of Synthetix (SNX), which essentially brought yield farming to DeFi, giving users a degree of ownership over the protocol.

In 2021, the decentralized crypto derivatives space was dominated by dYdX, an Ethereum-based protocol that leverages the StarkEx layer-2 scaling solution that not only benefits the protocol by helping it scale its trading volume, but also its users by significantly decreasing the gas costs associated with using the Ethereum blockchain.

Notably, in October, dYdX even surpassed Coinbase in terms of the total trading volume.

That being said, we can expect dYdX to face some tough competition with the recent release of Perpetual Protocol (PERP) v2 on Optimism, an optimistic-rollup solution aimed toward scaling Ethereum.

In this article, we will dive deep into the specifics of Perpetual Protocol v2, its benefits, the integration with Optimism, and the future of decentralized crypto derivatives platforms.

What Is Perpetual Protocol v2 or Curie?

On November 30, the team at Perpetual Protocol announced the launch of Perp v2, dubbed ‘Curie’ on Optimism mainnet.

The Curie update brings a wide array of performance enhancements to the Perpetual Protocol.

To begin, Curie’s integration with Uniswap v3 allows the protocol’s liquidity providers to benefit from the latter’s concentrated liquidity offering. At the same time, Curie also taps into Uniswap’s large trading volume that is giving the likes of Coinbase, Kraken, and others a run for their money.

In addition, being built on Optimism ensures that Curie users no longer face the issue of dreaded Ethereum gas fees. Not only does Optimism guarantee significantly lower transaction fees, but it also promises quick settlement of transactions without compromising on network security unlike Ethereum side-chains like Polygon (MATIC).

In all, Perp v2 offers a decentralized crypto derivatives trading platform with minimal transaction costs and instant transaction finality that leverages some of the top innovations in the DeFi landscape including Uniswap v3’s concentrated liquidity.

To give an example of the efficiency of Curie over Perp v1, during the recently concluded testnet trading competition, Curie reported a whopping 900% improvement in trade slippage over its previous iteration. In addition, the platform users witnessed a 4,600% decrease in cost associated with opening a derivatives position in v2 vis-a-vis Ethereum mainnet.

How to Use Perp v2?

The process of getting your hands dirty with Curie is fairly straightforward.

Currently, users can access Perp v2 mainnet on app.perp.com

After landing on the protocol website, simply connect your web crypto wallet with the mainnet and ensure to bridge your digital assets to the Optimism mainnet via the bridge here.

Once your funds have moved to Optimism, you can enjoy lightning-fast trades at minimal transaction costs while still enjoying the safety of the Ethereum blockchain.

Encouraging User Engagement

Perp v2 is committed to incentivizing the use of the platform among its users.

Accordingly, the protocol said it will soon launch a gas rebate program, liquidity mining, and trading competition to attract greater trading volume on the protocol.

In addition, Perp v2 is mulling the addition of support for advanced order types such as limit orders, support for multi-collateral, private markets, and the like.

Moreover, Perp v2 is open to launching on other blockchains in the future when the team deems it suitable.

At the time of writing Perpetual Protocol’s native PERP token trades at $10.78 with a market cap of more than $610 million while its major competitor, dYdX boasts of a market cap of slightly more than $618 million.

For Perpetual Protocol, however, a major hurdle that discouraged users from trying the platform was its sky-high gas fees courtesy of the Ethereum blockchain.

However, with the launch of Perp v2 on Optimism, one can expect a greater number of traders to use the platform which could help Perpetual Protocol eclipse dYdX in terms of user adoption over the long term.

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