Perpetual Protocol has just announced the release of Curie, Version 2 of the Perpetual Protocol. The launch comes only months after the launch of Perpetual Protocol Version 1. The protocol has overseen more than $19 billion in trading volumes in a short time, making the Perpetual Protocol among the top decentralized exchanges.
Curie also honors the work of Marie Curie, whose work has established the building blocks that are utilized in different domains. Curie will feature several new scaling enhancements, flexible liquidity, and more.
A Quick Overview
Curie’s launch will take place on Arbitum, giving users an enhanced UX with quick, inexpensive, and reliable trading. It will also feature cross-margin collateral management. Multiple collateral types support will follow shortly.
When it comes to liquidity, Curie will leverage Uniswap v3, and this will provide perpetual swaps with efficient, concentrated liquidity. The upgraded vAMM will mint virtual tokens, which will then be placed in the Uniswap v3 pools, providing liquidity. When it comes to traders, the vAMM will mint virtual tokens that can be used for buying and selling.
Using Curie, users will also create perpetual markets, utilize the Uniswap and Chainlink oracles, and expand the options available to PERP stakers.
Improved Capital Efficiency
Perpetual Protocol v1 faced higher slippage for large trades because the liquidity was thinly spread across different price ranges. Curie solves this issue by combining the vAMM model with Uniswap v3 as the execution layer. This results in significantly improved capital efficiency.
The approach also paves the way for further integrations due to a higher degree of composability.
Leveraged Liquidity Provision
Leveraged Liquidity Provision is a new class of liquidity provisioning. Makers on the Perpetual Protocol will now leverage their liquidity, apart from earning protocol fees. This will introduce a new range of Liquidity Provider strategies.
How does this work? Makers deposit their USDC on the Perpetual Protocol; they can then instruct the clearing house to mint vUSDC with 10x leverage. The protocol can also support higher leverage. In simpler terms, users can deposit 100 USDC and can create 1000 vUSDC tokens. These can be deployed into the Uniswap v3 pools.
Execute Trades Using v-Tokens
There are no changes in the trading process. However, trades can be executed on Uniswap by using v-Tokens. Traders will be able to deposit USDC for trading purposes and trade 10x the amount in vUSDC tokens.
Introducing Cross-Margin Mode
Curie will utilize cross-margin, allowing traders to use their account balance as a common collateral pool and open multiple positions. Traders can also use multiple assets as collateral, giving them more flexibility. However, the latter functionality will be added at a later date.
Create A Permissionless Market
Version 2 will support Uniswap v3 TWAP and Chainlink oracles. What does this mean? Simply that if any asset has a price feed on these platforms, they can create a perpetual market for that particular asset. This update will unleash the full potential of the protocol, allowing it to trade in stocks, forex, commodities, and crypto.
An Update On Tokenomics
Curie will allow fees to be generated from different avenues.
- Transaction fees from private markets
- Transaction fees from public markets
- Insurance fund funds can be utilized in low-risk protocols. This is called Rehypothecation and will increase earnings.
As more markets are added, these revenue streams will see significant growth, and combined with income from leveraged liquidity positioning and private market fees. Curie expects the total fees to be much higher than those of Perpetual Protocol v1. The addition of makers is also a potential revenue stream for token-holders interested in single asset LP strategies.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.