Perennial Q1 Recap & Outlook
Since mainnet launch at the end of 2022, Perennial has been off to a strong start. The vision of a permissionless & composable DeFi derivatives primitive has resonated well with users & developers alike. We couldn’t be more excited about where Perennial is headed!
Here, we recap Perennial’s progress thus far and share some insights into the road ahead!
⭐ Milestones
December 2022 — Mainnet Launch
Perennial’s introduction to the world began with contracts deployed to mainnet in early December of last year. We launched with 3 markets: ETH-long, ETH-short, and SQTH-long (by Opyn). Additionally, we publicly announced our $12mn seed round that included the likes of Polychain, Variant, Archetype, and more.
January 2023 — Perennial V1.2 Launch
This included the launch of a two-way batcher for deposits (leading to much lower gas), oracle optimizations, some minor bug fixes, and a few UI/UX improvements.
February 2023 — Arbitrum Launch
In response to demand from users, Perennial launched ETH markets on Arbitrum. Perennial’s low fee structure was well received, and usage began growing.
February 2023 — Vaults Shipped
In connection with the launch of Perennial on Arbitrum, we shipped a vault built on top of Perennial that autonomously deploys & rebalances liquidity between markets. This better enabled retail & less advanced users to take advantage of the power of Perennial’s hyperefficient core protocol with abstracted complexity.
February 2023 — Base Protocol is unveiled, with Perennial as a launch partner
Perennial’s founders, Kevin Britz & Arjun Rao, worked at Coinbase for a number of years, so we couldn’t be more excited to help position Perennial as a core primitive within the Base Ecosystem.
March 2023 — ARB Markets Launch
Shortly after Arbitrum launched the ARB token, Perennial enabled trading of ARB, long & short with 20x+ leverage. This was the first of many markets that can & will be deployed in the Perennial ecosystem. In addition, we launched a second vault aimed at Arbitrum ecosystem markets, starting with ARB.
March 2023 — Cryptex Finance Introduces its V2 protocol, built on Perennial
Cryptex Finance has utilized Perennial as infrastructure to launch markets for the index products they’ve been pioneering, allowing traders to trade & hedge broad exposure to crypto markets, NFT markets, and more in the pipeline.
March 2023 — Siren announces Siren flow, built on Perennial
Siren is building one of the most sophisticated options protocols in the market, using Perennial as a core venue to hedge delta for LPs. The existence of a protocol like Perennial was core to enabling this protocol design to exist.
⛏️ Digging into the data
Liquidity Accumulation — Perennial grew from $0 to almost $10mn in liquidity in less than a month, with no token incentives & an average maker leverage of over 2.0x, highlighting Perennial’s capital efficiency. While vault caps & maker limits have prevented liquidity from growing beyond those levels, we hope to increase these shortly after completing another (ongoing) full protocol audit.
Steady Open Interest & Volume growth — Perennial’s liquidity & low fee structure helped drive consistent trader demand. The protocol peaked at over $6.5mn in open interest in early April, and has done a total of $460mn in total volume over over the past month (an average of $15mn in daily volume)!
Strong LP Economics — Perennial took some time to balance out trader demand and maker liquidity but has now settled into a state closer to market equilibrium. Higher trader demand has driven higher funding rates & significant trading fees ($285,000 since the beginning of April), helping to support healthy Maker economics, even without external incentives.
🚀 The road ahead
We’ve learned a lot in Q1 and have a number of exciting things planned for Q2 & beyond. Here’s a quick snapshot of what’s to come:
Full UI redesign (including Pro Taker & LP user interface) — This has been by far the most requested enhancement to the current product, and rest assured we’ve been hard at work on this. We leaked part of the redesign at our last office hours and got overwhelmingly positive feedback. We’re excited to unveil the new look soon.
Multi-payoff Vaults — Right now, vaults only provide liquidity to markets of a single asset. Multi-payoff Vaults will allow vaults to expand to markets of multiple assets. For example, the ETH (“Blue Chip”) Vault can be upgraded to include ETH & BTC markets (and more in the future).
Faster, more efficient oracles — Perennial is currently built upon Chainlink main oracles on Arbitrum, which optimize for top-notch security properties. We’re exploring potential advancements that could enable faster & more efficient price updates without introducing additional risk.
Market Mechanism Research— We’re actively researching a number of improvements to Perennial’s market structure & mechanism design. More on this to come…
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A big thanks goes out to the Perennial community for all the support throughout the first few months of 2023. Q1 was an amazing beginning for Perennial, but the journey is just getting started. We still have much to do to position Perennial to grow into a core DeFi primitive.
Keep up to date with all the latest Perennial developments on discord, twitter, and github.
