Deperp is a decentralized perpetual exchange that offers traders a wide range of benefits including; self-custody asset management when trading crypto or forex, transparent on-chain transaction data, on-chain liquidity/reserve confirmation and more. Unlike centralized exchanges, Deperp allows users to control their own funds while maintaining transparency and security. The protocol uses advanced technology to improve both trading performance and reduced costs, making it faster and more efficient to use than its competitors.
Disruption was at the forefront of architecting DePerp, which led to building a product that would revolutionize the way users buy and sell and trade digital assets using DeFI. Our UI/UX is designed to be both fluid and intuitive providing traders with a convenient experience so far only achieved when trading on a centralized exchange.
Backed by multi-asset liquidity pools DePerp allows liquidity providers to earn fees from market making, and leveraged trading.
We are committed to providing a secure, fast, and reliable trading experience, with a robust suite of features we know traders want such as; advanced order types, margin trading, a user-friendly interface and comprehensive customer support. DePerp is the exchange for traders looking to maximize their potential in the markets.
Long position: Users can open a long position, subject to collateral. For example, if a user has made a margin of $1,000 and opens a position on ETH with a leverage of 30x, their position will be $30,000. If the price of ETH increases by 10%, the user will make a profit of $30,000 * 10% = $3,000 on their margin. If the price of ETH changes in the opposite direction, the user can get a margin call.
Short position: Similarly, users can open a short position if there is collateral. For example, if a user has made a margin of $1,000 and opens a short ETH position with a leverage of 30x, their position will be $30,000. If the price of ETH drops by 10%, the user will make a profit of $30,000 * 10% = $3,000 on their margin. If the price of ETH changes in the opposite direction, the user can get a margin call.
Liquidation: The liquidation price is calculated as the price at which the (collateral - losses - borrow fee) is less than 1% of the position's size. If the asset price crosses this point, then the position will be closed.
Stop-limit and Take-profit:
Stop-limit and Take-profit orders can be used to limit losses on positions by closing them when the price falls below (for long positions) or rises above (for short positions) the stop price. Take Profit orders are triggered when the profit price is reached. For a long position, the trader places a stop above the current market price. For a short position, the trader places a stop below the current market price.
The Price Feed smart contract receives data from the Oracle Network to get an aggregated median price. This oracle calculates prices using the median price of Tier 1 exchanges and related Chainlink oracles. The vault uses price flows; a higher price is used to open a long position, and a lower price is used to close. A lower open price and a higher close price are used for short positions.
Users can open a long position, subject to collateral. For example, if a user has made a margin of $1000 and opens a position on ETH growth with a leverage of 30x, their position will be worth $30,000. If the price of ETH increases by 10%, the user will make a profit of $30,000*10% = $3000 in addition to their margin. If the price of ETH changes in the opposite direction, the user's collateral may be subject to liquidation.
Open / close a position fee
The cost to open / close a position is 0.1% of the position size
There is also an execution fee detailed below which is used to pay for the blockchain network costs.
Funding rates for each market and collateral asset are determined hourly, taking into account the real-time imbalance of open interest. This dynamic calculation allows for a more accurate reflection of market conditions and helps maintain a balanced trading environment.
Funding fee = (Funding Factor- (Open Interest(short) - Open Interest(long)) /(Open Interest(long) + Open Interest(short))) / (365 * 24)
There are two transactions involved in opening / closing / editing a position:
User sends the first transaction to request open / close / deposit collateral / withdraw collateral
Keepers observe the blockchain for these requests then execute them
Vaults are influenced by underlying asset values and traders' positions, with strategies taking the opposite side of each trade. Liquidity providers earn 60% of protocol revenue through fees, and high utilization rates boost liquidity and trading volume. Chainlink's decentralized oracle network provides essential asset price information, and to reduce oracle manipulation risk, vault assets must have strong trading volumes and liquidity.
Vault functions include deposits and withdrawals via smart contracts, with fees calculated automatically based on traders' activity. Vaults offer separation between assets, allowing stablecoin deposits and insulation from vaults on ETH, BTC, USDC or USDT growth. Liquidity providers can balance deposits across multiple vaults, creating a personalized crypto index.
Vaults are based on assets like ETH, BTC, USDC and USDT, and balances adjust to trader positions. Vaults lease asset profits to traders, involving limited cryptocurrency risk. Maximum drawdown, set per asset, mitigates information advantage and insider risk across markets, while the buffer mechanism maintains DePerp ecosystem stability and ensures a secure trading experience for participants.
The DePerp Perpetual DEX protocol is based on smart contracts compatible with the Ethereum Virtual Machine (EVM). Ethereum, the most popular blockchain, has faced scaling issues for some time now. High gas fees due to network congestion is the primary problem. As the cost to use the network increases, a variety of scaling solutions have emerged. While Ethereum 2.0 is expected to increase network speeds to 100,000 transactions per second (TPS), base layer scaling is still a while away. Rollups appear to be a promising solution to the Ethereum scalability problem. The DePerp protocol will be deployed to solve both Layer-1 and Layer-2 scalability issues, providing enough liquidity to ensure a smooth and convenient transition to efficient trading.
Optimistic rollups: Optimistic rollups assume that the transaction data submitted to the Ethereum network is correct and valid. In the case of an invalid transaction, a dispute resolution process is initiated. A party submits a batch of transaction data to Ethereum, and if someone detects a fraudulent transaction, they can offer fraud proof against that transaction. Both parties, the one submitting the transaction data batch and the one submitting the fraud proof, stake ETH. This means that any misconduct from either party would result in the loss of their ETH. When a fraud proof is submitted, the suspicious transaction is executed again on the main Ethereum network. To ensure that the transaction is replayed with the exact state when it was originally performed on the rollup chain, a manager contract is created that replaces certain function calls with a state from the rollup.
Examples: Optimism, Arbitrum.
ZK-rollups: ZK-rollups, or Zero-knowledge rollups, don't have a dispute resolution mechanism. Instead, they use a cryptographic technique called Zero-knowledge proofs. In this model, every batch of transactions submitted to Ethereum includes a cryptographic proof called a SNARK (Succinct Non-Interactive Argument of Knowledge) that is verified by a contract deployed on the Ethereum main network. This contract maintains the state of all transfers on the rollups chain, and this state can only be updated with a validity proof. This means that only the validity proof needs to be stored on the main Ethereum network, instead of the entire transaction data, making ZK-rollups quicker and cheaper compared to other solutions.
Examples: Polygon ZkEVM, STARKWARE, zkSync.
Explain DeLayer chain by Deperp
The DeLayerl Layer-2 Chain is an innovative solution developed by Deperp to address the limitations and inefficiencies present in traditional blockchain networks. By utilizing this Layer-2 scaling approach, Deperp aims to significantly enhance the performance and capabilities of decentralized finance (DeFi) applications, while maintaining security and reducing transaction costs.
To achieve this, the DePerp team use the OP Stack technology to build DeLayer, an advanced platform designed to revolutionize the user experience in decentralized finance.DeLevel aims to become the foundation for a new generation of trading algorithms and financial instruments.
By focusing on high-speed performance and low costs, DeLayer will enable users to enjoy a seamless, efficient, and accessible trading experience that elevates the DePerp platform to new heights of decentralization.At the core of DeLayer innovation lies the adoption of the OP Stack Bedrock protocol. Bedrock brings a host of improvements to the table, including lower fees, shorter deposit times, improved proof modularity, enhanced node performance, and better Ethereum equivalence. These features will play a crucial role in making DePerp's trading environment more competitive and user-friendly.The overarching goal of DePerp and its DeLayer chain is to democratize the interaction between various financial protocols. By creating a single hub where different platforms can seamlessly and cost-effectively collaborate, DePerp aspires to usher in a new era of decentralized finance. DeLayer will serve as a catalyst for change in the DeFi landscape, breaking down barriers and fostering increased collaboration among financial protocols.
As DePerp continues to innovate and expand its offerings, DeLayer is poised to become a game-changer for users seeking a more efficient, decentralized, and inclusive trading experience in the world of DeFi.
The DePerp protocol is developed and managed by a team that receives 40% of the protocol's income. Currently, the governance is controlled by the team and governance, but this will change once governance token distribution is implemented. The core logic of the DePerp smart contracts cannot be changed. Protocol parameters that are controlled by governance and updated using a TimeLock smart contract include:
- Listing of new tokens
- Setting fees for perpetual trading up to 0.1%
- Rebalancing of vaults
- Suspension of swap or leverage trading for emergency use
- Setting the maximum allowed leverage
- Setting the maximum total capacity for long and short positions
- Updating and adjusting price feeds
- Updating governance values
- Treasury management
The TimeLock smart contract requires a 24-hour gap between when the full information about an action is reported to the network and when the action is performed. This is achieved using OpenZeppelin Sentinel. The TimeLock contracts can be found by checking the governance values of the contracts.
DPRP is DePerp’s governance token, it allows its holders to govern the protocol. By enabling collaborative control, the DePerp community can work together to improve the platform for its traders.
Utilities of DPRP include options:
• Governance through DPRP voting on protocol changes through TimeLocked settings.
Governance control over protocol votes such as:
• Automatic DPRP buyback and burning mechanism using fees;
• The sharing of protocol fees
• Incentive events for traders, the community, and the added benefits of the referral system.
A total of 100,000,000 DPRP have been minted. After launch, the maximum perpetual inflation rate of 1% per year may be used by governance to increase the supply of DPRP. Inflation must be enacted through a governance proposal and is capped at 1% per year.
The initial 100% allocation of the total supply of DPR is as follows:
10% (10.000.000 DPR) The DPRP token is stored on a Community Treasure contract and can be used by governance voting to make decisions about the protocol. This allows the DePerp community to have sharing control over the protocol and work together to improve it.
65% (65.000.000 DPRP) The Liquidity Treasure contract stores liquidity that can be used by voting. The Liquidity Treasure adds liquidity in a range of starting prices to perpetual option call system in a Uniswap v3 pool. Fees generated from trading can be claimed in the Treasure. This allows the DePerp protocol to have a sufficient amount of liquidity to ensure smooth and convenient trading. The Liquidity Treasure contract is managed by governance through voting, allowing the DePerp community to have shared control over the protocol and its liquidity.
5% (5.000.000 DPRP) The Foundation Treasure contract stores funds that can be used by the DePerp team for influencers and consultants. These funds can be accessed through team voting, allowing the team to make decisions about the use of the funds and ensure that they are used to support the development and growth of the DePerp protocol. The Foundation Treasure contract is managed by the team, providing them with the resources they need to continue improving the protocol and providing a better experience for the DePerp community.
20% (20.000.000 DPRP) The DePerp protocol allocates a portion of its funds to past venture investors. This ensures that past venture investors are fairly compensated for their contributions to the development and growth of the DePerp protocol. By supporting past investors, the DePerp team is able to strengthen its relationships with them and continue to grow the protocol in the future.
0% (0.00 DPRP) The DePerp team receives 15% of all trading fees which contributes to the resources needed to maintain development, marketing and improving the DePerp protocol..The team with the resources they need to continue developing and improving the DePerp protocol. By ensuring that the team has a stable source of income, the DePerp protocol is able to attract and retain talented individuals who can help drive its growth and success.