Introduction to Perennial

Derivatives Redesigned for DeFi

A Full-Stack Perps Ecosystem

Perennial is a layered ecosystem, enabling the most capital-efficient and seamless perps trading experience.

1️⃣ The Protocol Layer → A perps primitive designed for seamless leveraged exposure. Traders take positions, while makers & LPs manage risk with full flexibility. Powered by a hybrid intent-AMM model, it facilitates three-sided markets, settling trades against an oracle price feed.

2️⃣ The Rollup Layer → A dedicated perps rollup on Base, optimizing for near-zero fees, scalable throughput, and fast execution—ensuring the smoothest trading experience.

3️⃣ The Product Layer → Multiple frontends leverage Perennial’s protocol, including app.perennial.finance for pro traders, perp.fun for retail, and third-party integrations such as Slingshot (soon).

How does it work?

The Perennial protocol is a settlement layer for market-isolated derivatives trades. Takers (traders) can submit offchain (Intent) or onchain (AMM) orders to gain exposure to a market's underlying oracle price. Regardless of order type, positions are settled into the market’s peer-to-pool derivatives AMM, with funding & interest rates adjusting dynamically based on market skew & utilization.

Takers (Traders) deposit collateral & open a position to gain leveraged exposure to price feeds—long, short, or exotic payoffs. With Intent orders, a Taker’s position is matched with an opposing order from a Maker before being settled into the AMM. For AMM orders, Takers are directly netted against each other within the market.

Where a shortfall exists between Takers, Liquidity Providers (LPs) step in to fill the gap—earning fees while managing exposure. LPs take on risk proportional to the imbalance between longs and shorts. On an ongoing basis, takers & LPs settle up; the losing side pays the winning side.

Why Perennial?

At its core, Perennial is a minimalist, DeFi-native primitive, providing the foundational infrastructure for derivative markets while allowing developers, traders, and liquidity providers to interact at any level.

Some things that make the Perennial protocol stand out:

Hybrid Intent-AMM — A next-gen model combining offchain intent matching with onchain AMM settlement for deep liquidity & optimized execution.
Cash-settled — Trades are settled in $USD, aligning with the most popular crypto derivatives.
Low fees — A hyper-efficient design minimizes costs for both takers & makers.
Native LP Leverage — LPs can provide capital at significant leverage (up to 50x) and can fully customize their risk exposure & hedging strategy (or lack thereof).
Built for the needs of Developers — A composable, fully on-chain primitive designed for easy integration and expansion.
Permissionless — Open market creation, integration, and composability.

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Last updated 2 months ago