Investing in cryptocurrencies, but don’t have any particular trading skills? Are you an experienced trader, but don’t know how to monetize your expertise?
In that case, let us introduce you to Perpy, a decentralized protocol where traders and investors can interact with each other profitably.
This article is brought to you in collaboration with Perpy (learn more)
Presentation of the Perpy protocol
Perpy is a fully decentralized and permissionless Social Trading and asset management platform where traders can monetize their trading skills with investors who can profit from their expertise.
On one hand, experienced traders can create vaults, which are decentralized investment funds through which they can manage other users’ cryptocurrencies (in addition to their own). Vault owners, also known as ‘vault managers’, cannot withdraw investors’ funds, they can only trade with them.
On the other hand, investors can invest in these vaults and benefit from the performance recorded over time. This is essentially Copy Trading, but in a much more transparent, secure, and decentralized environment for users. They have total control over their cryptocurrencies compared to centralized platforms (CEX) that have direct access to their clients’ funds.
All activities recorded by Perpy’s vaults are visible and verifiable, making it impossible for traders to falsify their vaults’ performance to attract more users to invest.
But that’s not all, Perpy also introduces a SocialFi ecosystem in which traders and investors can interact with each other.
Perpy Vaults: Invest in the best traders
As mentioned above, investors can deposit funds into what Perpy calls ‘vaults’, where traders (the vault managers) can manage and grow those funds using their own trading strategies.
The trader you choose to follow through their vault can trade with your funds as if they were using their own wallet. In other words, your funds are exposed to all the trades made by the trader using their own portfolio.
While investors can generate income by exposing themselves to other traders’ trading strategies, traders can monetize their vaults by applying performance fees. These fees, ranging from 0% to 50%, apply only to the profits made by the trader after closing a winning trade.
How do vaults work on Perpy?
On Perpy, vaults directly interact with the perpetual market (perps) of decentralized protocols GMX and Level Finance. Traders can take different positions within a single vault, such as going long on an Ethereum contract while shorting a Bitcoin contract.
For risk-takers, leverage up to x50 is available.
Currently, Perpy is limited to the Arbitrum and Binance Smart Chain (BNB) networks, but the protocol plans to expand to other blockchains in the coming months.
When you deposit funds into a vault, you receive a ‘deposit proof’ represented by an equivalent quantity of shares in your deposit, in the form of ERC-20 tokens.
And of course, the funds you deposit into vaults are not locked. You can withdraw them at any time.
How to use vaults on Perpy?
Creating a vault on Perpy:
Once on Perpy, start by connecting your digital wallet and click on the ‘Create My Vault’ tab on the main page.
You will then need to provide various information, such as the network, the name of your vault, its description, performance fees, and the trading style you will apply (long-term, risky, etc.).
Click ‘Create your vault’ and confirm the transaction displayed on your wallet.
Your vault is now created and can be found in the ‘Vaults’ section on your Perpy profile.
To start trading, click on the ‘Trade’ tab to be redirected to the Perpy trading interface. Remember, all actions you take from this vault will be visible on Perpy.
Joining a vault on Perpy:
If you prefer to trust experienced traders, go to Perpy and click on the ‘The Vaults’ tab, where you will find all the decentralized funds owned by the protocol’s traders.
To learn more about one of the displayed funds, simply click on ‘Vault’. This is where you can see all the on-chain statistics of the vault (performance, PNL, TVL, position sizes, trade dates, history, etc.).
Consider this page as a decentralized trading dashboard or ‘trading journal’, where you can follow all operations carried out by the trader (vault manager) from their vault.
To deposit money into a vault, click on ‘Invest’.
Enter the amount you want to deposit, approve the transaction by clicking ‘Approve’, and then confirm your deposit by clicking ‘Deposit’.
For example, if you deposit 100 euros, they will be added to the other capital in the vault. If the vault achieves a +50% performance by investing in any perpetual contract, you will receive a 50% profit on your 100 euros (minus the trader’s performance fees). You can then choose to withdraw a portion of these funds for security.
Perpy goes beyond being a simple decentralized copy trading platform. The project also offers a social aspect, an ecosystem where traders and investors can interact with each other, send messages, share analyses, and even create their own communities.
By sharing their vaults on Perpy, traders can gain visibility, develop their brand image and community, attract new investors, increase their TVL, and create a virtuous cycle. Of course, this depends on the attractiveness of their fund’s performance to investors.
This approach not only maximizes traders’ exposure but also offers investors a wider range of trading strategies to follow.
Perpy – An ambitious roadmap for the decentralized protocol
Perpy has just emerged and is not planning to rest on its laurels. The following features will be available in the coming weeks and months:
- SPOT: Currently limited to perpetual markets, the Spot market, in partnership with 1inch, will be available in December on Perpy. Traders will be able to trade a wide variety of new tokens on both Arbitrum and Binance Smart Chain, diversifying their investment strategies. They will also be able to expose themselves to various low and medium market cap tokens.
- Options: In addition to Spot trading, Perpy plans to offer options on its platform. Managed by the Lyra protocol, options will allow traders to hedge their positions in the perpetual market. The goal is for Perpy to become an all-in-one platform, eliminating the need for traders to navigate different protocols for spot, perpetual, or options trading.
- Staking: Investors can stake Perpy’s native token, $PRY, to generate returns. They will also receive a portion of the performance fees applied by vault owners. Perpy will redistribute 90% of the fees to stakers, while the remaining 10% will be burned.
- Account Abstraction x On-ramp: Perpy will introduce account abstraction and on-ramp, attracting users from centralized exchanges and other Web2 platforms who are new to decentralized finance (DeFi).
- NFT: Perpy plans to introduce non-fungible tokens (NFTs) on its platform. Users will be able to create vaults dedicated solely to buying and selling NFTs.
Perpy: The future of decentralized copy trading?
Perpy is a trading protocol that stands out from the traditional ecosystem. It allows expert traders to share and monetize their own vaults, while amateur investors can benefit from exposure to these vaults and potentially generate profits without making any effort.
Not to mention the decentralized aspect that makes the protocol fully transparent and immune to fraudulent traders trying to make money at the expense of investors.
Finally, the SocialFi environment of Perpy makes the user experience, whether they are beginners or experts, much more dynamic, engaging, and sustainable in the long run.