Kwenta Documentation
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  • πŸ₯‚Welcome to Kwenta
  • Getting Started
    • How to start using Kwenta
    • Introduction
    • Getting started on Optimism
    • How to get sUSD
    • Access Kwenta
      • Installing the IPFS Companion to Access Kwenta
      • Backup RPCs
      • Withdrawing from v2 Isolated Margin using Optimistic Etherscan
  • Using Kwenta
    • Futures on Kwenta
    • Jargon
    • Synthetix Isolated Margin
      • Funding
        • Technical Details
      • Delayed Orders
      • Maker/Takers on Kwenta
      • Leverage
      • Liquidations
      • Initial/Maintenance Margin
      • One-Click Trading
        • Onboarding to 1CT
        • FAQ
      • Smart Margin
        • Dashboard Overview
        • Futures UI Overview
        • Get Started with Smart Margin
          • Withdrawing sUSD & ETH
          • Opening/Closing Positions
          • Conditional Orders
            • Limit Orders
            • Stop-Loss Orders
          • FAQ
      • Delegated Trading
        • Getting started
        • Managing Delegates
        • Accessing Accounts Delegate to You
      • Fees
      • Referral Program
        • The Traders Tab
        • The Affiliates Tab
        • Incentive Tiers and Rewards
      • FAQ
    • Perennial Isolated Margin
      • Perennial Intro
        • Market Design
        • Oracles
        • Payoff & Positions
        • Trading Fees and Price Impact
        • Funding Rate
        • Interest Rate
        • Leverage & Liquidations
        • Collateral
        • CodeBase
      • Bridging to Arbitrum
      • Trading on Perennial
        • Dashboard Overview
        • Futures UI Overview
        • Opening/Closing Positions
        • Advanced Orders
          • Limit Orders
          • Stop-Loss Orders
      • Gasless Trading
        • Onboarding to 1-Click-Trading
        • FAQ
  • Kwenta Token
    • Staking KWENTA
      • How to stake KWENTA
      • Escrow and Vesting
      • Transferring Escrow Entries
    • Claiming Rewards
    • Trading Rewards
  • DAO
    • Kwenta Token
    • Governance
    • MarketingDAO
    • devDAO
      • Contributing to the Kwenta Frontend
        • Troubleshooting
        • Testing
  • Developers
    • Deployed Contracts
      • V2 Futures Market Proxy Contracts
    • Verify Kwenta
    • Kwenta SDK
  • Resources
    • Audits
    • Development progress Epoch 1 2024
    • GitHub
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  1. Using Kwenta

Perennial Isolated Margin

Perpetual Futures on Arbitrum

PreviousFAQNextPerennial Intro

Last updated 10 months ago

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Perennial is a DeFi-native derivatives primitive that allows for the creation of two-sided markets that trade exposure to an underlying price feed in a capital efficient manner.

How does it work?

Perennial acts as a peer-to-pool derivatives AMM that perpetually offers to take the other side of any Taker’s position directly at the oracle price, in exchange for funding & interest rates based on market skew & utilization.

Takers (Traders) deposit collateral to get leveraged exposure to different price feeds (long, short, and exotic payoffs). A Taker's exposure within a market is matched against positions in the opposite direction. Where a shortfall between Takers exists in a market, Makers (Liquidity Providers) provided capital earns fees for filling the shortfall in the market. Makers take on exposure relative to the amount required to fill the exposure mismatch between takers.

On a continuous, on-going basis, takers & makers settle up; the losing side of the trade pays the winning side.

Why Perennial?

Perennial is minimalist at its core, designed to be a low-level, unopinionated primitive that lays the basic infrastructure and leaves the rest up to market creators and participants to define/optimize.

Some things that make Perennial stand out:

  • Cash-settled β€” trades settled in $USD, not crypto, in line the most popular crypto derivatives

  • Low fees β€” a hyperefficient protocol (in terms of mechanism design & capital efficiency) that minimizes fees for takers & makers

  • Customizable LP experience (both simple & pro) β€” Makers can LP with significant leverage (up to 50x) and can fully customize their risk exposure & hedging strategy (or lack thereof); Retail LPs can utilize vaults built on top that abstract complexity. Perennial makes very few assumptions about LPs at the protocol level, giving LPs full control.

  • Designed for the needs of Developers β€” not just another trading protocol; Perennial is built to be a composable primitive (low fee, fully-on chain, easy to integrate)

  • Permissionless β€” Permissionless market creation, integration, and composability.