Perpetual Protocol co-founder on TrustToken partnership and 2022 outlook

Yenwen Feng says Perpetual Protocol and True plan to extend the asset cap within the protocol-to-protocol lending portfolio from $5 million to $20 million if the preliminary trial succeeds.

Perpetual Protocol (PERP), an Ethereum-based decentralised derivatives change and TrustToken, the corporate behind  digital asset lending platform TrueFi and well-liked stablecoin TrueUSD (TUSD) just lately signed a deal that noticed the latter launch a $100 million liquidity pool for market makers.

As a part of the partnership, TrueFi unveiled a protocol-to-protocol lending portfolio on Perpetual Protocol, with a $5 million preliminary plough from the $100 million focused by finish of the yr. With the funds, market makers on the PERP platform can now supply extra liquidity, permitting the platform to scale its companies to extra skilled and institutional traders.

Commenting on the crucial function performed by liquidity suppliers, Perpetual Protocol co-founder Yenwen Feng stated:

“Dedicated market makers are essential for any user-driven decentralized change, as they’re the engine that retains it going. By teaming up with TrustToken, we convey our market makers extra liquidity to faucet into as they assist our personal buying and selling pairs. This grants liquidity suppliers extra confidence by higher market stability and lowered slippage which in the end leads to a greater buying and selling expertise for all of our customers.”

Yenwen Feng on TrueFi partnership and 2022 outlook

After Perpetual and TrustToken introduced their partnership, we needed to know extra concerning the $100 million liquidity pool and what the PERP group is trying ahead to in 2022.

Feng elaborated on a number of factors, together with plans to extend the LP funds’ pool from $5 million to $20 million following an preliminary trial interval. He defined the significance of offering assist to market makers through a devoted lending portfolio, with a word on why this may very well be essential to the derivatives market.

Feng can also be satisfied layer 2 options will play a key function in the way forward for on-chain derivatives beginning within the second half of 2022.

There’s extra the Perpetual Protocol co-founder stated.

CJ: When do the Perpetual Protocol (PERP) ecosystem market makers start to faucet into the massive liquidity?

Feng: After this preliminary trial we must always have the ability to fine-tune the parameters of this system earlier than opening it as much as different market makers. 

CJ: Briefly tells us concerning the $5 million lending ceiling and why begin with solely 5% of what might rise to $100 million by finish of the yr?

Feng: We needed to start out with a sufficiently small quantity to initially take a look at the waters to see what sort of an affect it might have on the market-making actions on Perp. This strategy is one other route for us to convey extra liquidity to the platform and if it goes properly, we’ll enhance it to $20 million for the following spherical and extra sooner or later.

CJ: What’s your outlook on the crypto spinoff markets, particularly if we see a crypto winter in 2022? Any recommendation to traders?

Feng: New L1/L2 improvement: Rollup applied sciences and new L1 chains are launching this yr. It ought to additional enhance the bandwidth and decrease the fuel charges. The panorama for L2s will develop into actually aggressive within the second half of 2022. 

For instance, zkSync just lately launched their public testnet and the Optimism group are engaged on decreasing the charges by 10x, so we’ll doubtless see a lift to buying and selling volumes as on-chain derivatives develop into cheaper and extra extensively accessible. 

Consciousness of establishments: Increasingly institutional merchants are testing out crypto buying and selling and bringing in additional markets.

CJ: What do you say concerning the 2022 crypto market outlook?

Feng: I really feel that the bearish market will solely be short-lived. Within the 2018 bear market, folks have been leaving crypto and by no means got here again. At the moment, we have been within the Binance Accelerator program and I believe round half of the tasks there on the time give up the crypto market fully. 

Nonetheless, the distinction this time is that even when crypto market valuation drops, most individuals will stay within the area and there are various builders and new improvements. 

There’s nonetheless a number of urge for food for cryptocurrency, resembling in Silicon Valley, so I believe by the second half of the yr, the market will likely be in a significantly better place. 

CJ: Any new tasks and protocols which have checked out your partnership with TrustToken and because of this expressed intention to construct on prime of the Perpetual Protocol?

Feng: Market makers and on-line technique suppliers are very on this partnership.

CJ: What compliance points, if any, has the platform confronted or needed to handle on account of sealing a partnership with TrustToken?

Feng: TrueFi creates an important atmosphere to assist us navigate by the complexity of laws. TrueFi is sort of a fund supervisor, the place Perpetual Protocol is the lender and market makers are the debtors. As a result of we’re utilizing their platform, we don’t need to be too preoccupied about laws, as TrueFi handles these points. 

Additionally, as soon as we develop extra, we will make the most of their platform to develop into the borrower. 

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