Launched in 2018 as “Strike” and later relaunched with a new name and mainnet in December 2020, Perpetual Protocol is a decentralized exchange (DEX) designed for leveraged trading, short positions and low levels of slippage. It uses a virtual automated market maker (vAMM) and collateralization vault to settle trades and enable trading in perpetual contracts, which are futures without expiry.
DEXs are seeing a pickup in the activity. For instance, derivatives DEX dYdx has registered a trading volume of more than $4.3 billion in the past 24 hours, surpassing the Nasdaq-listed centralized crypto exchange Coinbase’s $3.7 billion. Perpetual Protocol has facilitated trades worth $258 million so far today, amounting to a near 10-fold rise from Sunday’s tally of $16.16 million, CoinGecko data shows.
Synergia Capital’s Denis Vinokourov told CoinDesk that the great rotation into all things DeFi has begun, and the sub-sector could see a prolonged bull run. Spartan Capital’s general partner and head of research, Jason Choi, tweeted that overregulation would be a bullish catalyst for DeFi, while ByteTree Asset Management’s Market Insights published last week said “investors should look to DeFi for long-term alpha.”
That said, the breakout from the bearish channel may remain elusive if the macro picture turns bleak again. Bitcoin fell sharply in the first half of the last week along with S&P 500 on fears that the crisis at the Chinese property giant Evergrande Group may become a systemic problem for global markets.
While equities stabilized in the latter half of the week, China’s property market turmoil may not be over yet. “The Evergrande collapse only shows a dangerous reality in several Chinese sectors: excessive indebtedness without real income or assets to support it,” Daniel Lacalle, chief economist for Tressis SV, said in his opinion post at Mises Institute. “The hope that the government will fix everything contrasts with the magnitude of the financial hole.”
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