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Introduction to Perennial

Perennial in its most basic form is infrastructure for derivative markets.
A market in Perennial is a two-sided market (makers & taker) that trades synthetic exposure derived from a price oracle, over a given payoff function. Each market is independent & has isolated risk.
A Market in Perennial is defined by things like:
Makers can provide liquidity to the market various ways:
  • From Vaults, which contain USD collateral to be utilized back taker positions
  • From Advanced LPs, who've leveraged their collateral to a specific market
Implications of this worth calling out:
  1. 1.
    Payoffs are fully synthetic — There can be a Perennial market for any price feed (or any programmable deviation of that price feed). A market could theoretically be created for crypto tokens, currencies, commodities, or any other non-manipulable price feed.
  2. 2.
    Each price feed may have multiple markets —  There may be a Long-ETH market with the payoff function 1*ETH, and a Short-ETH market with the payoff (-1)*ETH)
  3. 3.
    Each payoff function may have multiple markets — There may multiple Short-ETH markets (payoff: (-1)*ETH), each with its own utilization curve, fees structure, parameters, etc.