[Perennial Finance] [FINAL] [STIP - Round 1]


Applicant Name: lewi

Project Name: Perennial Finance

Project Description: Perennial is an on-chain derivatives protocol built from first principles to be a DeFi primitive. The core protocol is minimalist, flexible, and efficient, allowing Perennial to mold to the needs of many different users & use cases.

Team Members & Qualifications:

  • Kevin Britz (Co-Founder, CEO) — Prev Engineering Manager @ Coinbase, Cofounder @ Astro Wallet
  • Arjun Rao - (Co-Founder, CTO) — Prev Staff SWE @ Coinbase, Cofounder Astro Wallet
  • Jacob Phillips (Product & Operations Lead) — Partner & Governance Lead @ Polychain Capital
  • lewi (DevRel/Community) — Prev Developer @ Gearbox, Core Dev & Community @ Empty Set DAO
  • AJ (Growth/Business Development Lead) — Prev Head of Growth/BD @ Mycelium / Tracer DAO

Other team members’ backgrounds include the likes of Manifold Trading, Gemini, Coinbase, and more.

Project Links:

Contact Information:
Telegram: @twpks
Twitter: lewifree
Email: lewi@equilibria.xyz

Do You Acknowledge That Your Team WIll Be Subject to a KYC Requirement?: Yes


Requested Grant Size: Siren Grant - 750,000 ARB

Grant Matching: N/a (Perennial does not have a token)

Grant Breakdown:
Perennial will use this grant to help gradually bootstrap Perennial V2 markets. Grant allocation will be split between makers & takers — we’ll experiment with different mechanisms, and steer allocations towards those with the highest ROI for the Arbitrum ecosystem.

We’ll avoid naive forms of liquidity mining in favor of more precise mechanisms that act as a short-term jumpstart for fundamental usage. Jumpstarting Perennial V2 will significantly accelerate the development of a broader ecosystem built around on-chain perpetuals, enabling our community to onboard new interface partners, structured products, and launch new types of markets/derivatives.

Allocation of Funds:
Makers (50%)

  • Liquidity bootstrapping incentives for major pools (top traded perps)
  • Medium-term incentives for novel markets introduced (NFTs, RWAs, etc.)
  • Targeting incentives for power users (ex. Onboarding incentives)

Takers (50%)

  • Open-interest-based trading rewards & skew balancing incentives (also benefits makers)
  • Fee rebates & other onboarding incentives for high-value users

Funding Address: 0xcc2A6ef429b402f7d8D72D6AEcd6Dfd0D787AcfF

Funding Address Characteristics: Gnosis Safe with 2/3 signers

Contract Address: TBD — we haven’t deployed V2 contracts yet. We have an in-protocol reward system that allows Perennial to stream tokens to makers & takers with custom speeds (See here). Additionally, Perennial may build & open source additional contracts for distributing this grant.


Key Objective:
To position Perennial V2 & the Perennial ecosystem for sustainable long-term growth through the use of targeted incentives that accelerate fundamental adoption/usage.

Jumpstarting markets — New markets launched on Perennial require some amount of liquidity to operate efficiently. Without it, a healthy market may never develop (not enough liquidity for traders to enter + not enough traders for LPs to enter). Perennial can use short-term incentives to support the bootstrapping of a new market into a state of sustainable growth.

Reducing onboarding friction — Some of the highest value potential users of Perennial also have a high cost of time/attention (especially, the need to build out hedging infra or trade monitoring tools). This friction may prevent them from taking advantage of opportunities within Perennial that they otherwise would. Perennial can use targeted incentives to help this user group justify onboarding to Perennial (which will hopefully lead to longer-term retention after incentives end).

Key Performance Indicators (KPIs):

  • Market Deployment
    • Launch & Incentivise 4 initial markets
    • Bootstrap 6 longer-tail markets
    • Deploy at least 2 market focused on NFT
    • Deploy at least 1 market focused on RWAs
  • Trader growth
    • Notional Trading Volume
    • TWOI - Time Weighted Open Interest
    • Unique Trader retention
  • Maker growth
    • Liquidity Depth
    • Liquidity Provider Churn
    • Maker Diversity (retail → professional)
  • Ecosystem growth
    • #` of teams building in Perennial ecosystem
    • % of flow driven by ecosystem partners

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

Fundamentally, Perennial is community-first and will live or die by the ecosystem around it. The core protocol is minimalistic, leaving the Arbitrum community to build out unique experiences & novel applications at higher layers of the stack. Our belief is that by creating an infrastructure-first derivatives primitive, we’ll help foster the development of a rich, composable DeFi ecosystem on Arbitrum.

Arbitrum made a name for itself by pushing the envelope & becoming the epicenter for innovation in DeFi on L2. Perennial hopes to usher in a new era of this. Perennial’s V2 will enable the community to build products (apps, vaults, and protocols) that were too difficult or even impossible to build before, making it a driving force for innovation in the Arbitrum ecosystem. This includes things like hedged LP vaults, structured products, and new markets (NFT perps, squared perpetuals, RWA perps, etc.) — all will be built in & around a composable perp primitive. Perennial Labs aims to create the right tooling & resources to foster a community that continually is ahead of the curve to keep Arbitrum on top.

In our efforts to do so, Perennial is (and will continue to be) active in bringing new users, projects, and developers to Arbitrum. Perennial is being aggressive in its efforts to create novel markets, onboard new oracles/price feeds, frontends, and developers to Arbitrum — all of which bring new people/groups into the ecosystem. Perennial will be most successful when Arbitrum’s ecosystem as a whole is most successful, and we’re actively doing our part to help the right people/groups get involved.

Justification for the size of the grant:

Since launching on Arbiturm in February, Perennial has shown to be efficient in bootstrapping usage ($1.3B in volume) without incentives or an airdrop. Over the last 30 days Perennial has had $70m in volume, and historically the protocol has had over $4mn TVL for nearly its entire time on Arbitrum.

A grant of this size would bolster Perennial’s efforts to build a derivatives liquidity layer on Arbitrum. We aim to continue the momentum of V1 and build a protocol that’s top of mind for developers & users looking for novel products.

Execution Strategy:

Below we present an execution strategy to efficiently distribute protocol rewards with targeted incentives structured to maximize users retention.

Maker strategies (50%)

  • Bootstrapping major pools (top traded perps) — Incentives in core vaults/pools will be structured in seasons, with temporary boosts in liquidity aimed around new product/features releases (and/or new user onboarding) to maximize effectiveness/retention. These will target a market rate for liquidity & will be adjusted based on liquidity utilization.
  • Novel markets liquidity bootstrapping (NFTs, RWAs, etc.) — For innovative/novel markets, we’ll target a higher rate than core pools for a sustained period to help grow the market. These markets will have underdeveloped infra & userbases that incentives will help develop. We’ll carefully monitor usage & trader demand in these markets and adjust incentives accordingly (pulling them quickly if trader demand isn’t there).
  • Reduce Churn & Incentivise Deep Liquidity – In the interest of longevity, we’ll devise strategies to attract & reward makers who provide deep liquidity & scale up usage over an extended period of time. Having a strong foundation of long-term-aligned makers will ensure Perennial’s users have confidence that it will have consistent liquidity when they consider placing their next trade.

Takers strategies (50%)

  • Fee rebates / onboarding incentives for high-value users — This includes both broad & targeted strategies to reduce the costs associated with getting on boarded to Perennial (but without creating incentives to wash trade). On a broad basis, we define certain criteria that a user must meet to take advantage of short-term incentives in the form of fee rebates when first using Perennial to target those most likely to stick around after the rebates are gone. We may also tie some incentives to trying out new markets or by performing some desired behavior.

  • OI-based taker incentives & skew farming — This method incentivises consistent / long-term usage, and is perhaps the least gameable way to incentivize users in perpetual markets. Additionally, it has the nice property of actually helping balance long & shorts (when not longs/short are not equal, rewards will be skewed too). When skew is low, makers see benefit — the protocol’s liquidity requirement is significantly reduced (see here), makers take on less risk, and LPs can more comfortably use leverage, which will quickly allow Perennial to offer users deep liquidity with relatively little TVL.

Grant Timeline:
Once approved, we’ll begin prepping for issuing rewards. This could take a number of weeks, if contracts need to be audited. Thankfully, Perennial has a reward distribution mechanism built into the core protocol that is tested & audited, so this should help reduce the time to distribution.

Once the rewards are live, we’ll start off slow with allocations and gradually ramp up once we’re confident we’ve got the right strategies & parameterization of the reward program. We’ll begin & pause to evaluate strategies on some regular cadence (say every 2 weeks), updating the community along the way.

Additionally, we’ll try to correlate rewards with major milestones to amplify their effectiveness — Perennial will do it’s part to provide strong enough fundamentals to kickstart the flywheel, allowing the rewards to act as amplification of fundamentals. This includes things like temporary reward boosts following new market/feature releases, significant protocol upgrades (V2.1 released), and potentially meaningful ecosystem/partnership announcements.

Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream?: Yes


Is the Protocol Native to Arbitrum?:
Perennial V1 launched on Ethereum mainnet; however costs and execution time made us look for other options. 2 months later, Perennial deployed to Arbitrum. Arbitrum has been our core focus (and the vast majority of usage) since.

Perennial V2 is native to arbitrum.

On what other networks is the protocol deployed?:
Perennial V1 is on Arbitrum & Ethereum mainnet, but will be sunset.

Perennial V2 will be native to Arbitrum (our core instance of the protocol), set to launch there in a matter of days. We also plan to deploy a subset of markets to Base sometime after launch.

What date did you deploy on Arbitrum?: 21st February, 2023

Protocol Performance:
Perennial performed quite well in its early days on Arbitrum: $1bn in volume, ~$10mn in notional liquidity, and 9,600+ unique traders in the first 3 months on Arbitrum. We proved the fundamental concepts behind Perennial as an on-chain primitive and went back to the drawing board (building Perennial V2) to improve the fundamental infrastructure upon which Perennial is built to allow it to scale.

Our Recap post covers some milestones we hit:

For a deeper dive into the data check out our Dune Dashboards:



Perhaps most exciting, Perennial enabling innovation can be seen today by the projects building on top of V2:

  • Cryptex Finance — Using Perennial as Infrastructure to launch index perps (starting with Total market cap perps, other NFT/RWA indexes in the works).
  • Siren — Building an options protocol with a Delta-neutral LP pool, hedged with Perennial
  • Liqui — Building hedged LP products for spot DEX LPs, using Perennial perps as a primitive

And much more to come…

Protocol Roadmap:

Perennial’s near- to medium-term product roadmap includes:

  • New markets: Perennial V2 will quickly launch many new markets.
  • Complex Order types: Limit Orders, Stop losses, & Take profits
  • New Oracles (which means new markets): Chainlink Low latency oracle, NFT Oracles, RWA oracles, and more. Perennial will identify & integrate the right price feeds to give Takers the products that they want/need.
  • Perennial V2.1: efficiency improvements to current protocol & permissionless market deployment
  • UI improvements: Leaderboard, Portfolio page (with rich history), and enhanced Pro Maker experience
  • Loyalty programs: Perennial VIP program, Referrals, and / or Points system
  • Additional interfaces launched on Arbitrum, leveraging Perennial as a liquidity layer.
  • New structured product partners deploying; new LP vaults, basis trade vaults, DN strategies.
  • Major Integrations/partnerships to be announced soon.

Audit History:

SECTION 5: Data and Reporting

Is your team prepared to create Dune Dashboards for your incentive program?
Yes, Perennial has an existing dashboard to track V1 performance on Arbitrum. V2 will replicate this and add sections specifically for ARB incentives.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?
Yes, the Perennial team will be regularly updating the community, reporting on the progress of ARB reward strategies, as well as key volume/tvl metrics.

Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: Yes


Reserved for Updates

Very excited about Perennial and this proposal. Arbitrum has always been the place for derivatives and Perennial fits well into this ecosystem.

Use of grants is line with the proposal since Jumpstarting markets is challenging but can have a flywheel effect for the Arbitrum ecosystem creating liquid markets that can attracts new traders into the space. I also like that proposal is highlighting ideas to reduce wash trade and increase long term engagement for traders.

Excited to do cross-platform collaboration and grow the Arbitrum derivatives space together.


Hello @lewi thank you for your application!

I just wanted to confirm you understand and will be able to comply with the required timeline stated below.


Coudl you update the milestone of using grant?

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Yep, we understand that we need distribute all tokens by the deadline.

Thanks for going through this proposal and other proposals to triple check everything :pray: .

Perennial is an exciting protocol and I’m not surprised to see them put thoughtfulness into their LM program too. We need more proposals like there’s that breaks down reasoning and methodology for LM distribution. +1 from the Dolomite team!


Thank you! Your submission now meets all requirements to be considered for a snapshot vote.


Admittedly I don’t have experience with them because I simply wasn’t aware of them, but after some DD it appears to be an active and talented team and solid product, which would be an actual source of using Arbitrum. Projects like this feel like the best usage of grants at this stage.


Appreciate the kind words.

This grant would be a massive boon for Perennial. It would be able to let us hit the ground running with a new protocol version and let us bootstrap a lot of markets. We wanna prove out the new system and build an environment where partner’s who’ve been waiting patiently for V2 have confidence in building on Perennial.

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perennial is a great product, I use it a lot and the team is a great team, props to them!

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Hello @lewi ,

Now that your application has been marked eligible, please be advised of the remaining steps in the application process to be completed prior to the Review Period Deadline:

Please complete the following steps required for your application to proceed to Snapshot:

To change your proposal to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness to proceed from [Draft] to [Final] status.

Once notified, the Arbitrum Foundation Forum Moderator will adjust your title from [Draft] to [Final] status. Once marked as [FInal], your application post will be locked by moderators and you will no longer be able to edit your proposal.

Firstly, thank you for your proposal and for showing an active interest in the Arbitrum ecosystem.

Introduction and Rationale

Perennial aims to launch its V2 markets on Arbitrum, asking for a grant of 750k ARB, which is 1.5% of the 50M ARB available in the program. As a peer-to-pool AMM, Perennial allows for leveraged exposure to multiple price feeds and offers liquidity providers the chance to earn fees. With an impressive $1.3 billion in cumulative volume and $70 million in the past 30 days, Perennial has proven its market fit. We’re particularly encouraged by Perennial’s role as an infrastructure layer that other protocols can build upon, and we see the balanced incentive structures for makers and takers as a strong point. However, there are specific areas we believe could be refined.

Minor Concerns

Grant Size Relative to Product Stage

  • The current proposal focuses primarily on Perennial’s product development and testing of v2
  • Our recommendation for change: We recommend lowering the grant request with respect to this

Scope of Benefit to the Broader Ecosystem

  • Unclear roadmap for the creation of Arbitrum native markets
  • Our recommendation for change: Make it clear what arb-native markets will be created


Castle Capital appreciates the efforts put forth by Perennial and the derivative markets they aim to offer to the Arbitrum ecosystem. While we see the potential and appreciate the groundwork laid by Perennial, we suggest refining the proposal based on the mentioned recommendations.

Our recommendations are as follows:

  • Lower the grant request to 500k ARB considering the current TVL and product stage

We hope our feedback is received in the constructive and positive spirit in which it is offered, and we look forward to seeing how Perennial continues to evolve within the Arbitrum ecosystem.


Thanks for taking the time to consider our proposal!

We view V2 as a continuation of the success we saw in V1 of the protocol, rather than a radical new product thats unproven. We feel like Perennial’s V2 markets, like V1, will help to bolster codebase diversity and ultimately resilience, in the derivatives ecosystem where a monoculture exists. Something that would be reinforced if the status quo is maintained.

From this point of view, we feel like a grant of this size is reasonable when compared to the significant asks of protocols who are offering similar platforms.

Arbitrum is the canonical chain for Perennial V2, and we expect it to be our core venue for new markets & experimentation. However to clarify the proposal, I’ve updated the proposal to include tangible markets & some insight to the novel markets we will aim to launch before the end of the program.

Hope that provides a little more info on how we are approaching this proposal.


Hello @stonecoldpat @cliffton.eth @eli_defi we’ve incorporated all the feedback and finalized the proposal.

We are ready to proceed to [FINAL]. Thank you!

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Post has been marked FINAL and locked.

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We fully endorse this proposal focused on the sustainable growth of the Perennial V2 and its ecosystem.
Overall, the proposal is well-thought-out and aims to address the crucial challenges facing Perennial’s adoption and growth.

iZUMi Team

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Perenial: @lewi

From @Seedgov led by the @cattin delegation, we want to convey our support to this proposal. The reasons why we agree are as follows:

  • An innovative product that serves as infrastructure for other protocols and has gained significant traction without relying on additional incentives.

We want to clarify that this is not the final vote, since as we clarify in this release, the final vote is defined by our community. We also want to invite you to attend our Governance Call that will be held tomorrow in our discord.


Michigan Blockchain supports this proposal with the requested amount being justified given the sustainable benefits to the Arbitrum ecosystem and having conducted an in-depth reviewal process of all submitted STIP proposals. We appreciate Perennial’s effort in delivering a promising proposal and working with the community throughout the process.


Being a peer-to-pool AMM, Perennial shows a great impact for the Arbitrum ecosystem and it provides all of the steps and milestones in a very detailed way. In addition to that, the amount of grant requested will let them “be able to hit the ground running with a new protocol version and let them bootstrap a lot of markets” as they stated, could be considered reasonable.