Perpetual Protocol x Index Coop

Owners: @Mringz / @Reganbozman / @BigSky7 / @NickTong (Perpetual)

Hypothesis:

In order to increase AUV for $DPI token and extrinsic productivity for the $DPI token we have identified the opportunity to work with Perpetual protocol to host a joint trading competition. We believe this competition will bring more awareness to Index Coop and subsequently increase adoption of the $DPI token. Additionally, the competition will allow the $DPI token spot price to stabilize as the competition will increase trading volume, because of the respective projects native token incentives.

Perpetual protocol is also an L2 scaling platform as it allows users to interact with the Ethereum network with reduced transaction fees. This aligns with our vision at Index Coop as we strive to make our products more accessible.

Context:

Perpetual Protocol is a L2 options trading platform that brings perpetual futures contracts on-chain through their virtual AMM model (vAMM). The team was also one of the first projects to scale to layer 2 with xDai. According to their Head of Strategy, Nick Tong, since the release of the protocol on the mainnet on the 24th December 2020 they have seen trading volume of $2.8 Billion in trading volume and over 720K trades to date. The protocol allows traders to trade perpetual futures on-chain without incurring high gas fees. The protocol is also backed by reputable firms like Binance Labs, Alameda Research and Three Arrows Capital. The protocol also has an insurance fund to protect users against insolvency risk and short-term liquidity risk.

In order to incentivise trading, Perpetual protocol hosts competitions where it awards the best traders in their native token ($PERP) which can be staked to earn a portion of the USDC trading fees generated by the protocol.

These competitions have been quite valuable for the protocol with their testnet/simulated trading competition generating the following value:

Participants (Traders) 1 800
Total trades 35 104
Trade volume $1,906,299,164 (USDC)
Transaction fees generated $1,772,778 (USDC)
Gas Fees saved $480,000 (1021 ETH)

After the success of their testnet trading competition they launched the first mainnet trading competition.

The competition run for 3 weeks from the 14th December 2020 to the 4th January 2021 which generated the following figures:

Average daily trading volume (approx.) $5,000,000 (USDC)
Individual trades 48 437
Cumulative trading volume (approx.) $100,000,000 (USDC)
Native token rewarded 31 440 ($172,605.90)
Transaction fees $1.69 (xDAI)

Additionally, there is high demand for stable tokens to list on Perpetual protocol as they’re platform reduces price volatility of the respective tokens. There is a waiting list to list on Perpetual protocol and $DPI has a unique chance to jump the queue because of our relationship as well as providing rewards to incentivise participation. This gives us a unique opportunity to fast track the listing process on their platform. The trading competition will purely be focused on the DPI/USD pair with the winners chosen based on the highest PNL during the competition duration.

Competition Duration:

12th - 19th March 2021 (7 Days)

Conditions for participation:

  1. Sign up with a Twitter handle
  2. Must start with 0 PnL before the trading competition starts

Technical Requirements:

The platform just uses Chainlink for pricing data for $DPI Token. The DPI/USD pair will be synthetically traded so we would not have to provide any resources to the competitions except for the 1000 $INDEX token rewards. The Perpetual protocol team will create the synthetic DPI/USD pair.

Marketing Requirements:

  1. Kickoff with a joint community clubhouse on Friday, 12th March to launch the competition with Nick Tong from Perpetual Protocol and Simon Judd from Indexcoop moderating and discussing the competition.
  2. Both teams will create a brief Medium article that will be posted on both Perpetual Protocols and Index Coops’ Medium profiles to inform new users on how to participate in the trading competition as well as direct new users on where to purchase Index Coops’ $DPI token.
  3. We will also have a leaderboard posted daily on both twitter channels for the duration of the competition. Perpetual protocol will tweet the leaderboard and Index Coop twitter profile will retweet the leaderboard to encourage participation.
  4. Lastly, both Index Coop and Perpetual protocol will announce the competition through their respective discord channels for community awareness and to encourage participation.
  5. Indexcoop will also announce the competition on their Substack (Views from the nest) through the podcast and weekly newsletter.

Perpetual Protocols’ marketing channels:

Twitter: 13k Followers
Telegram: 3412 Members
Discord: 4004 Members
Medium: 363 Followers

Index Coops’ marketing channels:

Twitter: 11.6k Followers
Discord: 2684 Members
Medium: 242 Followers
Substack: 350 Subscribers

Funds Requirement:

1000 $INDEX tokens and 1000 $PERP distributed as followed:

Position Prize
1 330 INDEX + 330 PERP
2 200 INDEX + 200 PERP
3 100 INDEX + 100 PERP
4 70 INDEX + 70 PERP
5 50 INDEX + 50 PERP
6 - 10 30 INDEX + 30 PERP
11 - 20 10 INDEX + 10 PERP

Prizes for positions 1 - 5 are vested over 6 months linearly.

Analytics Requirements:

Perpetual Protocol will provide analytics for the project. No, requirements from Index Coop.

KPIs:

  • DPI/USD Trading Volume
  • Number of participants
  • Number of Trades (DPI/USD)

Campaign Targets:

  1. $10,000,000 cumulative trading volume
  2. 10,000 unique trades
  3. 2000 participants
7 Likes

OK, I’m not familiar with perpetual protocol. However, if the trading is using synths, what benefit is there to the coop? It doesn’t directly increase our AUV as even if there is massive trading, no on-chain PDI is required.

Or is the idea, that traders will hedge some positions using on-chain DPI?

1 Like

Great work @Mringz - this level of analysis and detail makes it very easy to vote yes. I am glad that we are getting this off the ground. Options protocols like Perp will see significant adoption over the coming year, great that we can front-run some of that activity.

1 Like

Yes this is a fair point - it does not directly drive AUV. However, it makes DPI a more useful asset because you can hedge it. It also continues to push our narrative that DPI is THE DeFI Index

Perpetual is also the leading on-chain options platform at the moment and having DPI listed will help with brand marketing.

5 Likes

Sounds good to me. I wanted check that I was understanding the situation. It’s not directtl driving AUV, but it is broadening the use cases for DPI :+1:

Hi all,

Great to see our partnerships and the range of DPI application grow.

My first thought was the same as OA’s question. But @reganbozman makes a good point in that this will push the broader narrative of DPI as THE DeFi index / benchmark.

My question is about the timing of this challenge.

While DeFi moves at an incredible pace, creating a forum post, announcing a partnership & challenge, plus starting the challenge all in the same week is pretty fast even for DeFi.
The last thing I want is stepping on the breaks when people are in full motion to build something, but is there enough time for all the announcements and to create enough momentum around this?

Maybe I missed previous efforts on this topic…?

These are the only requirements to make this partnership happen. I have raised your concerns with the Perpetual Protocol community and we will push back the competition to start on the 19th March until the 26th March (I will edit the above proposal). I also do not want to rush it, I prefer a coordinated launch with both communities aligned. However the next step from here is to get one design contributor from Index Coop and one marketing contributor from the Index Coop to add to the telegram group we formed with perpetual marketing team execute the marketing requirements. @reganbozman @BigSky7 Are you okay with this?

1 Like