Perpy Finance
They are pioneering the concept of connecting traders to investors 24/7 on a decentralized perpetual exchange in a non-custodial and fully transparent way.
Perpy is a fully on-chain protocol allowing access to copy trading on a decentralized perpetual exchange.
Many people who are interested in trading and investing in crypto are not professional investors. On the other hand, many professional traders and individuals who might be good traders and investors cannot necessarily launch a fund the traditional way or the headache is not worth it for them.
They are pioneering the concept of connecting traders to investors 24/7 on a decentralized perpetual exchange. Their goal is to revolutionize the accessibility of Web3 investments on Perpetual Trading.
Their copy trading solution is directly linked to GMX via smart contracts. As a follower, Perpy allows you to copy the most successful GMX traders ; as a trader, Perpy allows you to monetize your trading skills through your followers’ performance fees. As a Web3 product Perpy offers you full transparency on the traders’ performance ; as well as how the strategies are structured and operated. Moreover, the architecture of our smart contracts ensures that your assets are safe and secure, your money goes where you want it to, whenever you decide.
Perpy allows traders to create their investment vehicle in a few clicks, manage their trades in a simple secure and low cost way and choose their fee. Share your vault on social networks, quickly gain exposure with our social tools. Perpy is an opportunity to make profit in a win-win manner for you and your followers. Their protocol is currently available on Arbitrum. In the future we plan to develop Perpy on many decentralized trading platforms and become a cross-chain copy trading hub .
Protocol Technical Description
Contracts description
Perpy’s core contracts have a simple structure: A factory contract is responsible for creating vaults for traders where they will be able to trade users’ deposits. After a deposit is made, the user receives an equivalent amount of shares corresponding to an ERC-20 contract which acts as a proof of deposit. The vault also tracks the performance of the trader through the shares and manages fees redistribution.
Perpy introduces the concept of Trading Vault which is a contract that enables the trader to interact with decentralized Perpetual Protocols like GMX
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From the user’s perspective, following someone corresponds to making a deposit in a vault. The owner of the vault can then trade with the vault’s funds as he would trade using his wallet on GMX. However in order to allow users to withdraw their funds whenever they want, some limitations have been introduced in this first version:
- A vault can only trade one asset against USDC. In the example above the TradingVault can only trade ETH.
- The trader can only trade at market to let the liquidity available for users that want to withdraw their funds.
- After a trade is closed the vault gets back to USDC and not the traded asset.
Protocol fees
Their protocol differentiates between 2 different fees that generate revenue for the DAO:
Perfomance fees :
The trader implements performance fees on his trading vault ranging from 10%-50%. Perpy takes 20% of those for the DAO. They take the price of the TradingVault share in High Water Mark as the basis for the performance fee. This means that performance fees will only be deducted when the share price is above its historical high. After a total or partial close of a trade, a portion defined by the performance fees from the profit generated by the trader is sent directly in USDC to the Trader and the DAO.
Example: TradingVault starting with 1000 USDC ; Share Price: 1 USDC ; High Water Mark=1 USDC ; performance fees: 10%.
The trader achieves a 100% return after closing the trade. Then 10% from the profit (1000 X 0.1=100 USDC) is deducted due to performance fee. 20% those 10% is for the DAO (20 USDC) and 80% for the trader (80 USDC). The total TVL is 1900 USDC and the share price and High Water Mark are 1.9 USDC.
Exit Fees:
Each user exiting the trading vault must pay an exit fee of 0.3% the amount withdrawn. This fee goes to the DAO in USDC.
