Introducing Tracer Perpetual Pools V2
The Road To V2
Tracer’s Perpetual Pools V1 contracts have been live on Arbitrum for over 5 months!
We’ve seen Perpetual Pools secure upwards of $50M USDC across the four offered markets, and over $350M in volume of leverage tokens traded. Perpetual Pools have successfully passed through the first round of battle testing, and are ready to onboard a new wave of DeFi users who are seeking a simpler leverage trading experience.
Tracer is running with this momentum and continuously seeking opportunities for refinement; it’s now time to introduce Perpetual Pools V2, and deliver the best leveraged tokens that DeFi can offer!
What’s new with Perpetual Pools V2?
The following upgrades mean a better product for traders and more open contracts for growing Tracer markets.
New Features in V2:
- Long-term leverage without getting “rekt” by volatility decay
- No more minimums
- Permissionless Market Deployment
- Create Custom Indices
What does this mean for users?
- Hold a leveraged token in your wallet with minimal volatility decay
- Mint a leveraged long or short token of value less than $10
- Create any leveraged token with permissionless deployment
- Experiment with creating new indices
We’ll explore the features in-depth below.
1. Permissionless markets
The power of Tracer is the sheer possibility and potential of the infrastructure to change how we manage risk. This particular feature will let people deploy markets that have never been seen before, unlocking more exotic markets using new price feeds.
It’ll also allow users to create markets settled in any token the market wants.
Want to trade 3x ETH/USD settled in TCR, as a means to put your assets to work? With V2 Permissionless Pools, you can.
Worried about an increase in your heating bill during the winter? You can add a market that tracks your local energy prices.
From V2, anyone can deploy a custom Perpetual Pools market. You’ll be able to create leveraged tokens that track any oracle feed/s*, with any leverage, that settles in any token.
We’ve developed a generalized Perpetual Pools Factory contract that makes this possible. The Factory accepts custom parameters and generates new markets in accordance with various inputs.
This simple process is going to be even easier, with a streamlined UI being released shortly after V2’s launch, that lets users interact with the Factory Contracts to deploy markets without needing to write a single line of Solidity.
Oracle security and reputation will continually be displayed through reputation.link so that users can assess the security of the oracles underlying a contract, before engaging in any financial transaction.
The potential markets are limitless.
2. Mint Leveraged Token; Hold in Cold Storage
Simple moving average (SMA) pricing for Perpetual Pools will change the LETF/leveraged token game forever. With SMA pricing you can hold a leveraged token position for long periods of time without getting “rekt” by volatility decay that exists in other leverage tokens and ETFs.
The common kinks and irregularities commonly found in Perpetual Swaps no longer apply to Pool tokens that utilize Tracer’s V2 SMA pricing.
SMA’s calculate the average of a range of prices by the number of periods within that range and smooth out volatility. We believe this makes Pool tokens the best avenue to gaining long-term leveraged exposure; and the easiest way to mitigate risk.
3. No more minimums
V1 needed a minimum commitment of $1000 USDC to either mint new Pool tokens or redeem existing ones.
We’re tearing down that barrier with V2.
By batching commits, Pools can now process any and all sized trades at rebalance in a highly secure way. Instead of iterating through a commitment queue, the contracts sum all mints and burns and processes them in a batch. You simply claim the tokens after the rebalance happens.
Bonus: Infinite Indices
Tracer’s Indices Product is launching soon after Perpetual Pools V2. It enables Pools to track exposure to multiple assets and data feeds.
This unlocks the full potential of possible markets able to be hosted by Tracer. The new indices product means Tracer can produce Perpetual Pools for any market that can be expressed by an oracle or basket of oracle data feeds.
Indices are custom oracle wrappers that weigh and aggregate different feeds to create a new index oracle, allowing for more creative indices to be created from already existing price feeds that can be deployed permissionlessly through the Tracer Data Factory. Users simply choose oracles to aggregate and the weightings to give them.
Indices aren’t exclusive to Perpetual Pools either, they can be used by any derivative template or even external protocols! When they are used as an oracle by a Perpetual Pools market, you can take a position/s on assets or indices that you otherwise couldn’t.
This is a critical first step to unlocking tokenized long and short exposure to baskets of digital and real-world assets, allowing Tracer to grow in utility to external financial markets.
Tracer’s goal is to create new financial models that combine art, technology, community and have these concepts come to life in meaningful ways. Open-sourced, decentralized and democratized: the creation of new indices is simpler and more attainable than ever before.
For example, the Punks Pool allows you access to the CryptoPunk market and the ability to hedge downside risk as the market fluctuates; we call it the Punk Floor Index. Tracer (being a permission-less protocol for derivatives) is well-positioned to roll out a market such as this.
The feature enhancements in Perpetual Pools v2 are a massive step forward in enabling individuals and communities to efficiently manage risk; and opens up a tremendous amount of flexibility to deploy financial products that combat emerging risks head-on.
By creating tools that allow for long-term holding periods, permission-less deployment of markets, the construction of new, meaningful indices and removal of minimum commit sizes, we’re enabling communities to take risk management into their own hands, driving financial innovation to new heights. Get ready for an explosion of new markets.
These communities will define the future of markets and Tracer DAO is here to support their efforts. Join the Tracer DAO Discord today and be part of a community that’s helping shape the future.