Opening with a $5 million lending ceiling supported by Perpetual Protocol’s investors, the first of its kind protocol-to-protocol lending pool on TrueFi will grant Perpetual’s market makers funds to create deep liquidity
San Francisco, California, February 2022 — TrustToken, builders of the leading unsecured lending protocol TrueFi, as well as popular stablecoins like TrueUSD, announces its partnership with Perpetual Protocol (PERP), an Ethereum-based decentralized derivatives exchange with up to 10x leverage. As part of the collaboration, TrueFi launches its first protocol-to-protocol lending portfolio, supporting market makers with access to competitively priced loans to support even deeper liquidity on Perpetual Protocol. The portfolio opens with a $5 million asset cap, to be expanded over time.
The decentralized finance ecosystem expanded by 1,200 percent in 2021 in total value locked—a dramatic upshoot in parallel with increased interest from traditional financial institutions and institutional investors. Decentralized exchanges – trading platforms powered by smart contracts – have emerged as one of the key cornerstones of the space. Since they rely on algorithmic market-making instead of the usual order book, they need a community of dedicated liquidity providers to maintain pools large enough to avoid slippage on executing trades.
TrueFi helps Perpetual scale its liquidity efforts by launching a dedicated lending portfolio to market makers providing liquidity directly to Perpetual’s trading pairs. While launching with support for a limited list of participants, drawn largely from the Perpetual Foundation and PERP’s ecosystem supporters like Multicoin Capital and Dragonfly Liquid, the portfolio is designed to support a broad scope of lenders in the future. Future Perpetual Protocol portfolios may also benefit from added lender rewards, including TRU and PERP incentives.
TrueTrading, a TrustToken affiliate company, will manage the portfolio on behalf of Perpetual Protocol and provide compliance services to create the smoothest experience for Perpetual Protocol and its partners. Additionally, the collaboration benefits from TrueFi’s large and growing network of trusted crypto-native funds, such as Amber Group, who will be able to engage with Perpetual on TrueFi with ease.
“Smart contracts allow us to build sophisticated financial products in a transparent way,” says Rafael Cosman, CEO of TrustToken. “Perpetual’s decentralized futures contracts, with no settlement date, are a prime example of novel financial engineering enabled by the promise of blockchain technology. TrueFi is thrilled to support Perpetual as its first protocol-to-protocol lending partner, powering liquidity for Perpetual’s groundbreaking offerings, in a portfolio we expect to pass $100 million by year’s end.”
“Committed market makers are crucial for any user-driven decentralized exchange, as they are the engine that keeps it going,” says Yenwen Feng, Co-Founder at Perpetual Protocol. “By teaming up with TrustToken, we bring our market makers more liquidity to tap into as they support our own trading pairs. This grants liquidity providers more confidence through greater market stability and reduced slippage which ultimately results in a better trading experience for all of our users.”
Source: Plato Data Intelligence: PlatoData.io