Perpetual Protocol is a decentralised perpetual futures exchange that recently deployed Curie, their V2 on Optimism. V1 of Perpetual Protocol saw over 40bn in volume traded on a non incentivised basis.
Perpetual Protocol currently is the largest project on Optimism.
One feature that we are working on that we are very excited about is multi collateral. Effectively this will allow people to utilise other types of collateral in Perp and trade or market make on it. We propose that on launch of this feature to add in Frax as a collateral type that can be used to market make on Perp
Whilst it’s very hard to give timelines for when it will be delivered we are targeting either Q1 or Q2 of 2022 to deliver - a lot of unpredictability of timing comes from audits and edge cases that we may find. However it’s currently a top priority for the foundation team.
The Foundation team currently market makes on Perpetual Protocol and are looking for stable assets to deploy and utilise for market making purposes. The motivation is because like most other foundations and DAOs, they hold a lot of the native token but far less in stables.
We would propose an initial loan of 10m in FRAX to the foundation team to be utilised as collateral for market making. The Foundation team will guarantee the principle will be repaid after the duration of 6 months.
One issue currently is that the system only allows for USDC as collateral to be utilised and this will remain the case until multi collateral is launched (which we hope in the next couple of months). Rather than waiting for this feature to be launched we propose to start building out a relationship with the Frax community and so would propose the following: the initial 10M FRAX will be converted to USDC and utilised for market making purposes. On the launch of multi collateral, the foundation team will firstly add in FRAX into the white list of assets and then convert all of the USDC back into FRAX and deploy it into Perpetual Protocol
Assuming the partnership works well we can see this taking off: as the protocol continues to grow we foresee this need for collateral to grow up to 200m by the end of the year and would love to partner with FRAX on this.
Secondly, Perpetual Protocol is currently the largest project on Optimism by nearly every measure. Combined with Optimism being still in its early stages of growth there is a lot of room to manoeuvre to make FRAX a dominant stablecoin on Optimism
Lastly, Perpetual Protocol currently has both a grants program and an ecosystem fund (https://twitter.com/perpprotocol/status/1424718361770881036?s=20&t=xoS0Fl08AqknLzUAZVfNjw). This means that by enabling FRAX as collateral on Perpetual Protocol it will also expose FRAX to other projects that are building or integrating with Perpetual protocol currently.