# 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.
To dive deeper, see the [Mechanism](https://www.notion.so/o/L4EUNHdWsBUAEDZqMBNt/s/esXIGSYvKcOjqMTCdsjo/~/changes/53/protocol/~/overview) section, or explore the layers of Perennial below.
### Dive in
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