Perpetual (PERP)Analysis & Market Overview
1. Project Overview
Perpetual Protocol is a decentralized protocol for perpetual contracts on any asset, powered by a Virtual Automated Market Maker (vAMM). The project aims to create new financial instruments by democratizing futures and other crypto-asset derivatives. Thanks to its virtual AMM (vAMM) design, the protocol can support 20x leverage, short positions, and lower slippage compared to other AMMs.
2. Fundamental Analysis
The total supply of PERP is 150 million tokens, with a circulating supply of 66,002,157 tokens, accounting for 44% of the circulation. This represents a relatively high level of liquidity. Additionally, the 24-hour trading volume indicates an activity level at an exceptionally high rate of 347.65%.
3. Token Information
4. Ownership Distribution Analysis of Perpetual Protocol (PERP) on Ethereum
-Dispersed concentration, moderate trading activities, and a prevailing official exchange account.
Firstly, the accounts such as Rank 1: Perpetual Protocol: Foundation Locked Wallet, Rank 2: Optimism: Gateway, and Rank 3: Binance 8, among others highlighted in bold in the table above, are associated with token public exchange tradings, token deposits, and token project corporation accounts. These types of accounts hold a significant ownership stake due to the token settlement by the project founders. Furthermore, they account for more than 65.99% of the top 30 positions.
After excluding the project corporation accounts, the ownership held by private investors appears to account for only 18.90% of the top 30 positions. Among these, Rank4 holds the largest share with 3.09%, equivalent to 4.642 million PERP tokens valued at $5.709 million based on a token price of $1.23 per unit. The remaining distributions are below this threshold.
The transaction activities within a 24-hour period exhibit relatively high levels of activity, resulting in an imbalanced trade outcome of 327,100.7925 units, equivalent to a cash outflow of $402,333.
4.1 Rank4
Rank4 exclusively holds the PERP asset, as mentioned earlier. Notably, Rank4 possesses the largest share of 3.09% (4.642M tokens), excluding holdings in public and company corporation accounts.
Additionally, Rank 4 has engaged in three transactions; a cash inflow on June 29th and two instances of cash outflow on September 18th and 19th.
Based on the charts, it can be inferred that these transactions were speculative in nature; however, neither of them occurred at a profitable point. The lowest point on June 14th ($0.4097 per PERP token) and the highest point on September 9th ($1.1602 per token) were both missed. According to Lookonchain’s monitoring data, the Perpetual Protocol Foundation wallet address deposited 903,000 PERPs (equivalent to approximately $691,000) into Binance at 1 pm on September 6th after witnessing a rise in PERP prices. Additionally, Coingecko data from September 7th reveals that the decentralized perpetual contract token for Perpetual Protocol (PERP) is currently trading at $0.8896 with a daily increase of 16.6% and a weekly increase of 110.3%. Finally, within two to three days following these reports, the price of PERP tokens skyrocketed from $0.4114 to $1.1602 — an astonishing rise of 282.23%.
4.2 Rank5
The 5th rank comprises two distinct tokens, ETH and PERP; however, the contribution of ETH is relatively insignificant, amounting to only $23.98. In contrast, PERP holds the 5th position with a volume of 3.75 million tokens valued at $4.199 million based on a token price of $1.12. Consequently, Rank 5 accounts for approximately 2.49% of the total PERP token supply.
Similarly, the transfer activities exhibit higher levels of activity compared to Rank 4, with multiple transfers occurring on various dates involving substantial amounts towards PERP tokens, primarily driven by speculative motives.
4.3 Rank 6
The account comprises several noteworthy tokens, including sDai, USDM, USDT, stETH, USDC, and WETH. Among these assets, PERP holds the utmost significance despite its sixth position in ownership share (1.97% of the entire ownership of PERP on the Ethereum chain).
By allocating the transfer activities of this account towards the PERP token, it can be observed that these transfers occur frequently and involve irregular amounts, indicating a sense of uncertainty among the holders.
Notably, a significant increase in buying transactions took place on December 21st, primarily driven by the upward trend in price. Consequently, on December 26th, the token reached an impressive value of 1.400 per unit, representing a remarkable surge of 176.65% compared to the initial investment.
4.4 Rank 8
The 8th rank is associated with a single asset, namely PREP, which accounts for 1.56% of the total ownership. It executed only one transaction on November 11th, involving 2.35 million tokens valued at $2.631M.
4.5 Rank 9
The Rank9 category consists of two distinct tokens, namely ETH and PERP; however, the contribution of ETH is relatively insignificant, amounting to only $44.16. In contrast, PERP holds the 9th position with a volume of 1.975 million tokens valued at $2.211 million based on a token price of $1.12. Consequently, Rank 5 represents approximately 1.31% of the total PERP token supply.
The transaction history of this account has been quite inactive, with only three recorded instances. It is interesting to note that in each transaction, the amount transferred was consistently 1.975 tokens. This consistent value raises questions about the purpose behind these transactions and the significance of this specific amount.
5. Ownership Distribution Analysis of Perpetual Protocol (PERP) on Optimism
-Ownership concentration, dispersed distribution, frequent trading activities
The Perpetual token is actively traded on the Optimism chain, with a total capitalization of $34,262,592.544. This amount represents approximately 21.329% of the capitalization on the Ethereum chain.
However, it is evident that Rank1 holds 87.11% ownership on the OP chain, surpassing even the combined ownership of the top 30 positions — an extraordinary phenomenon indeed.
With regards to Rank2 (a corporation/deposit account), however, Rank3 now only possesses a 1.21% ownership stake. All other distributors maintain control-ship below 1%.
The trading activities within a 24-hour period exhibit an exceptionally high level of activity, leading to increased volatility in ownership. However, overall, the situation on the Ethereum chain remains consistent, with a greater outflow than inflow of PERP tokens amounting to -471,787.3301 and a corresponding value decrease of -$559,067.986.
5.1 Rank1
The first rank is associated with a single asset, PREP, representing 87.11% of the total ownership. It requires 25.719 million tokens, equivalent to a value of $28.164 million. Notably, this smart contract frequently engages in transfers within a minute.
5.2 Rank 2 is a swap exchange account.
5.3 Rank3
The third-ranked account holds two types of tokens, namely PERP and USDC. It possesses a total of 358,884 tokens with a combined value of $393,002.1. Additionally, as the second-largest holder of PERP on the Optimism chain, it accounts for 2.66% of the entire ownership share.
The other token in this portfolio is USD.e, which comprises 250,005 tokens valued at $249,974.55. These two assets hold nearly equal weightage and their token values exhibit minimal deviation.
Regarding transfer activities, there were only two transactions recorded on December 26th (two days ago), with the largest transaction occurring at 23:24.
1) . It can be inferred that the account holder purchased 5 tokens at 16:31 when the token price was around 1.1649, indicating a bullish perception towards PERP before its significant increase in value.
2) . Subsequently, the controller made another stock-in action at 23:24, purchasing a large amount of PERP tokens at a price of 1.316. However, this action missed out on the opportunity to buy earlier in the day around 2 pm when the token price was only 0.915 per token instead of buying at the second-highest price later in the day. Following this volatility, the token price gradually declined to a lower and more reasonable level by December 29th, reaching a price of 1.12.
Moreover, based on the statistical data for the entire year of 2023, this upward trend occurred in September, reaching an astonishing peak before consistently declining to a normal price level. In conclusion, this ‘tragedy’ can be attributed to investors’ erroneous self-assessment behavior. It is crucial to stay updated with the latest news and seek professional investment advice in order to proceed cautiously.
Lastly, it is important to note that this upward trend is not merely coincidental; rather, it exhibits a discernible intentionality. On December 12th, the Perpetual Protocol Fund announced its transfer of 1 million PERPs (equivalent to approximately $680,000) to Binance via its 0x1F0 multi-signature address. Subsequent to this announcement, the token price experienced significant volatility. Investors should also remain vigilant regarding any potential impact from official public news releases.
5.4 Rank4
The 4th rank comprises two distinct tokens, namely WETH and PERP. PERP occupies the 4th position with a trading volume of 221,533.24 tokens valued at $262,516.893 million based on a token price of $1.14. It possesses 0.75% of PERP assets on the OP chain.
This resulted in the execution of a smart contract that facilitated transactions within minutes. Additionally, the account also possesses WETH as another token; however, its value is significantly higher at $2,225.75 per token, amounting to $81,339.45 for 36.54 tokens.
5.5 Rank5
The fifth rank exclusively holds PREP as its sole asset, representing 0.73% of the total ownership of the OP chain. It necessitates 217,393.38 tokens, which equates to a value of $238,060.505. Notably, this smart contract frequently engages in transfers within a day.
5.6 Rank6
The Rank6 smart contract exclusively holds PREP as its sole asset, representing a 0.61% ownership stake in the total ownership on OP chain. This requires a total of 182,313.14 tokens, which translates to a value of $206,178.94 based on the token price of $1.13. Importantly, this smart contract consistently executes transfers within minutes.
6. Position Distribution
PERP is already above the main position distribution for 2022–2023. The main position distribution for 2021 is further away.
7. Contract Data
The Coinglass platform presents a real-time long/short ratio of 0.9531 over 24 hours; nevertheless, this ratio indicates a well-balanced market sentiment with a bullish tendency.
The Binance platform currently holds the dominant position in PERP contract trading. The long/short ratio exhibits a bullish inclination.
8. Recent News Highlights
8.1 The Perpetual Protocol Foundation transferred 1 million PERPs to Binance (PA first line | 2023–12–12)
PANews news on December 12, on-chain analyst Ember wrote that half an hour ago, Perpetual Protocol Fund will transfer 1 million PERps (worth about $680,000) to Binance through its 0x1F0 multi-signature address. Since April 2022, the Perpetual Protocol Foundation’s lock-in wallet has unlocked and transferred out 1 million PERP to 0x1F0 multi-signature addresses approximately every month, and then into a centralized exchange (CEX).
8.2 DWF Ventures says the derivatives agreement is one of its main investment priorities (PA first line | 2023–10–11)
On the X platform, DWF Ventures said that “derivatives agreements are one of DWF Ventures’ main investment priorities.” DWF Ventures discusses the state of sustainable DEX and mentions projects such as Perpetual Protocol, Drift Protocol, Kwenta, and more. According to DWF Ventures, while perpetual trading is undoubtedly a good fit for the cryptocurrency trading space, the choice between perpetual CEX or DEX is not a simple binary decision. The permanent challenge for decentralized exchanges goes beyond improvements in speed, volume, and transaction fees.
DWF Ventures added: “Looking ahead, we expect continued innovation in the DEX space. We are eager to see how each protocol addresses the three areas of de-blockchain technology, decentralization, and utility of protocol tokens to further shape the future of sustainable DEX.”
9. Summary
9.1 PERP price wave and implication
A general summary could be derived from the token price fluctuations throughout 2023, which occurred significantly in March, September, and December. The observed trend indicates a remarkable surge followed by a subsequent decline towards a normal price level. This phenomenon may be attributed to announcements or news related to the token project planner. However, such volatility also reflects investors’ lack of confidence and do not believe in the value consistency in the PERP token. Therefore, it is crucial to stay updated with the latest news and seek professional investment advice for cautious decision-making. Additionally, investors should remain vigilant regarding any potential impact from official public news releases.
9.2 Ethereum chain and OP chain comparison
On Ethereum, there is a dispersed concentration with moderate trading activities. The whole ownership contains 150.3M tokens. Additionally, apart from project corporation accounts, private investors seem to hold only 18.90% of the top 30 positions.
On the other hand, the OP chain exhibits ownership concentration with dispersed distribution and frequent trading activities similar to Ethereum. The whole ownership contains 29.56M tokens.
Disclaimer:
This analysis is provided for informational purposes only and should not be construed as financial advice or a recommendation to buy, sell, or hold any cryptocurrency or investment product. Cryptocurrency markets are highly volatile, and the value of tokens can fluctuate significantly in a short period.
Investors should conduct thorough research and consider their risk tolerance before making any investment decisions. The information presented in this report is based on available data and market trends, and subsequent developments may impact the analysis.
The analysis relies on data from various sources, including blockchain explorers, exchanges, and news outlets. While efforts have been made to ensure the accuracy of the information, there may be unforeseen risks or events not accounted for in this report.
It is crucial to note that past performance is not indicative of future results, and the cryptocurrency market is subject to regulatory changes, technological developments, and macroeconomic factors that can influence prices and market dynamics.
Readers are encouraged to consult with financial professionals and conduct independent research before making any investment decisions. The author and Sypool disclaim any liability for financial losses or damages arising from the use of this analysis or reliance on its content.
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