Perp Coin: A Smart Investment Decision?

Perpetual Protocol (PERP) is a decentralised exchange (DEX) for trading futures. The protocol supports up to 10 times leverage on a number of industry-recognised assets, including bitcoin, ether, avalanche and BNB. The current price of Perpetual Protocol is $1.25. So, is it a good investment?

PERP has been depreciating and has fallen below its launch price for the first time since January 2021. However, a recent rally is being fuelled by the upcoming launch of vePERP rewards for token stakers. The long-term PERP price predictions are more bullish. PricePrediction suggests it could average $4.77 in 2025 and climb to $33.05 by 2030. TechNewsLeader forecasts a maximum value of $37.43 in 10 years' time.

However, it's important to remember that cryptocurrency markets remain extremely volatile, making it difficult to predict a coin's price in a few hours, let alone long-term estimates. Analysts and algorithm-based forecasters can and do get their predictions wrong.

What is Perp Coin?

Perp Coin is the native token of the Perpetual Protocol, a decentralised exchange (DEX) for perpetual contracts. It is a standard ERC-20 token on Ethereum, and DAO issues it.

Perpetual Protocol was launched in late 2019 by Yenfen Weng and Shao-Kang Lee, two Taiwanese cryptocurrency entrepreneurs. The platform enables users to interact with a variety of assets, including BTC, ETH, DOT, SNX, YFI, and others, with up to 10X leverage. The interaction process is non-custodial, meaning users maintain possession of their assets throughout.

The Perpetual Protocol employs a virtual automated market maker (vAMM) to aim for on-chain liquidity with predictable pricing. The vAMM provides the protocol's liquidity and uses constant product curves to make 'predictable pricing'. It is fully collateralised and designed to allow for collateralised trading while remaining market-neutral.

The PERP token has three use cases: governance, staking, and exchange backstop. As a governance token, it incentivises and facilitates the decentralised governance of the protocol. Token holders gain voting rights proportional to their holdings. Holders can stake their tokens in staking pools and receive a portion of the transaction fees as stable coins plus staking rewards in PERP.

The platform also introduced an insurance fund feature as the first line of defence against unexpected losses resulting from the liquidation process or investors' inability to fund their position payments. This fund is accrued through protocol usage, with 50% of the transaction fees deposited into it.

The total supply of PERP is 150 million, with a current circulating supply of around 66-68 million.

How does Perp Coin work?

Perp Coin, or Perpetual Protocol, is a decentralised exchange (DEX) for futures on Ethereum and xDai. It uses a virtual automated market maker (vAMM) model, which provides on-chain liquidity with predictable pricing set by constant product curves. The vAMM functions as a tally of all trades and automatically finds an equilibrium over time.

Traders can go long or short with up to 10x leverage on a growing number of assets like BTC, ETH, DOT, SNX, and YFI, among others. Trading is non-custodial, meaning traders always retain possession of their assets, and on-chain. In practice, trades on Perpetual Protocol are all settled in USDC.

The PERP token is the platform's governance token. It is a utility token designed to facilitate and incentivise the decentralised governance of the protocol. Token holders gain voting rights proportional to their holdings. The token has three use cases: governance, staking, and exchange backstop.

Perpetual Protocol also has an insurance fund feature as a first line of defence against unexpected losses. This could be from losses in the liquidation process or the inability of investors to fund their position payments. This fund accrues through the protocol used, where 50% of the transaction fee is deposited. If the insurance fund is depleted, a smart contract will be triggered to mint a new PERP and immediately sell those PERPs for collateral to protect the system's solvency.

The price of Perpetual Protocol (PERP) is calculated in real-time by aggregating the latest data across 55 exchanges and 71 markets, using a global volume-weighted average formula.

Is it a good short-term investment?

Perpetual Protocol (PERP) is a decentralized exchange (DEX) that operates on Ethereum and xDai. It enables users to interact with a variety of assets, including BTC, ETH, DOT, SNX, and YFI, with up to 10X leverage. The interaction process is non-custodial, meaning users maintain possession of their assets throughout.

PERP is currently trading at around $1.25, with a 24-hour trading volume of $6,366,090.37, representing a 9.30% increase from the previous day. This indicates a recent rise in market activity. The current market cap of Perpetual Protocol is $27.34M, and it is ranked #661 in market capitalization among cryptocurrencies.

PERP has shown a positive momentum over the last few weeks, and analysts predict that this trend will continue in the short term. According to forecasts, the price of PERP is expected to reach a maximum of $3.29 by the end of 2024, with an average price of around $2.18.

In the short term, the PERP coin is still a good buy and holds the potential to be a good investment option. The current possibility is a moderate bullish momentum, and the price might break out and record a rally, followed by strong market participation, resulting in a higher accumulation of the PERP token.

However, it is important to remember that cryptocurrency markets are extremely volatile, and it is challenging to predict a coin's price accurately, even in the short term. As such, analysts' predictions and forecasts may not always be correct.

Before investing in PERP or any other cryptocurrency, it is crucial to conduct thorough research and understand your risk tolerance. Remember that past performance does not guarantee future results, and you should never invest more money than you can afford to lose.

Is it a good long-term investment?

Perpetual Protocol (PERP) is a decentralized exchange (DEX) for perpetual contracts. It enables users to open leveraged long or short trading positions for a variety of assets, including BTC, ETH, DOT, SNX, YFI, and others, with up to 10X leverage. The interaction process is non-custodial, meaning users maintain possession of their assets throughout.

PERP is an Ethereum token that powers the Perpetual Protocol. It is a utility token designed to incentivize and facilitate the decentralized governance of the protocol. It has three use cases: governance, staking, and exchange backstop.

PERP has also introduced an insurance fund feature as a first line of defense in the event of unexpected losses. This fund accrues through the protocol used, where 50% of the transaction fee is deposited.

The current price of PERP is $0.58, with a 24-hour trading volume of $5,607,125. This is a 7.56% decrease in the last 24 hours. Its market cap is $38,601,653, with a circulating supply of 68.7 million PERP coins out of a total supply of 150 million.

There are several factors to consider when determining if PERP is a good long-term investment. Firstly, it is important to understand the project's fundamentals and use case. Perpetual Protocol aims to create a highly accessible decentralized derivatives platform with good liquidity and low slippage. It has a unique vAMM solution that deviates from the traditional order book model, providing on-chain liquidity with predictable pricing.

Secondly, it is worth looking at the team behind the project. Perpetual Protocol was launched by Yenfen Weng and Shao-Kang Lee, two Taiwanese cryptocurrency entrepreneurs who previously developed an accounting company for crypto startups. The team is primarily based in Taiwan and has received backing from reputable investors, including Binance Labs and Alameda Research.

Thirdly, it is crucial to analyze the price history and market sentiment. PERP reached an all-time high of $24.84 in August 2021 but has since experienced a significant correction, with the current price being over 95% lower. However, since the beginning of 2024, the price has reflected continual bullish momentum, and it is currently trading around $1.25.

According to price predictions, PERP is expected to reach a minimum price of $1.04 and a maximum price of $2.57 by the end of 2024. In 2025, the minimum and maximum prices are predicted to be around $2.12 and $4.74, respectively. By 2030, the minimum and maximum prices are forecast to be $5.06 and $8.84, respectively.

Additionally, it is worth considering the risks associated with investing in cryptocurrencies. The market is highly volatile, and it is challenging to predict the future performance of any coin or token accurately. There is always the risk of losing money when investing in cryptocurrencies, and it is essential to do your own research and understand your risk tolerance before making any investment decisions.

In conclusion, whether PERP is a good long-term investment depends on various factors, including your risk tolerance, investment horizon, and diversification strategy. It is crucial to carefully consider your financial situation and consult with a financial advisor before making any investment decisions.

How does it compare to other cryptocurrencies?

As a decentralised exchange (DEX) for trading futures, Perpetual Protocol (PERP) has a unique offering that sets it apart from other cryptocurrencies. Its use of a virtual automated market maker (vAMM) to achieve high liquidity and low slippage is a key differentiator. This feature, combined with its support for up to 10 times leverage on industry-recognised assets, makes it a popular choice for traders.

In terms of price, PERP has seen its fair share of volatility. It reached an all-time high of $24.84 in August 2021 but has since fallen significantly, trading at around $1.20 as of August 2024. Despite this decline, PERP is still ranked within the top 600 cryptocurrencies by market cap, indicating its relative strength compared to other coins.

When compared to similar Ethereum Ecosystem cryptocurrencies, PERP has underperformed in recent weeks, with a price decline of -2.20% in the last 7 days. However, it is worth noting that the overall crypto market has seen a surge in the same period, with a 4.20% increase. This suggests that PERP may be experiencing a temporary setback rather than a long-term decline.

Looking at long-term predictions, PERP is expected to recover and reach prices between $2.12 and $4.74 by the end of 2025. By 2030, the maximum price of PERP is predicted to reach $8.84, indicating strong potential for growth. These forecasts are supported by the protocol's unique features, strong backing from reputable investors, and the recent introduction of staking rewards.

In summary, while PERP has experienced a decline in price since its all-time high, it still holds a strong position in the market and has unique features that set it apart from other cryptocurrencies. The long-term predictions for PERP remain positive, indicating that it has the potential to be a good investment option for those willing to tolerate the risks associated with the volatile crypto market.

Frequently asked questions