Deri Protocol is a cross-chain decentralized derivatives trading protocol which is deployed on Ethereum (currently inactive), BNB Chain, Arbitrum, Polygon and HECO Chain (currently inactive). It's now updated to v3. The platform now offers perpetual futures, perpetual options and Power Perpetual, which allows users to trade an index of asset prices and hedge against impermanent losses. The most important feature of the agreement is the introduction of DPMM (Deri Proactive Market Making) mechanism, where user positions are tokenized into NFT and can be highly integrated with other DeFi projects, of which the platform calls "DeFi Lego".
Deri Protocol is designed with all the defining features of DeFi and financial derivatives in its nature. In addition to cryptocurrency derivative trading, Deri will also trade real-world assets such as a Stock index like SP500, individual stocks, and commodities like gold and silver. The price of these real-world assets will be fed using oracle. Deri has done a strategic partnership with Chainlink for feeding off-chain real-world data to its on-chain network.
With the DPMM mechanism, when the net position is 0 (the equilibrium state; long positions equals short position), the mark price equals the index price fed by the oracle. Whenever there is a trade, it pushes the mark price toward the specific trading direction (i.e. a buying trade pushes the price up while a selling pushes it down). Thus, a spread between the mark price and the spot price is created (i.e., mark - spot), and the funding rate mechanism switches to per-second billing, the same as most centralized derivatives exchanges such as BitMEX. Deri's DPMM mechanism unifies the trading logic for both perpetual futures and perpetual options, allows for any funding-fee-based derivatives to be handled by a single liquidity pool.
Deri is the DeFi way to trade derivatives: to hedge, to speculate, to arbitrage, all on chain. With Deri Protocol, trades are executed under AMM paradigm and positions are tokenized as NFTs, highly composable with other DeFi projects. Having provided an on-chain mechanism to exchange risk exposures precisely and capital-efficiently, Deri Protocol has minted one of the most important blocks of the DeFi infrastructure.
v3 also introduces an external liquidity pool through Vault. The protocol deploys a vault for each user to manage deposited capital (LP liquidity or trader margin). The vault will keep a portion of the liquidity reserve for settlement and fees, and the remaining user asset will be sent to an external liquidity pool to earn additional LP rewards. Deri is currently hosting the vault externally on Venus on the BNB chain.
$DERI is a native token to the Deri Protocol and can be used for platform governance, staking and transaction settlement. In addition, Deri has defined a "Privilege" feature for $DERI that allows for more favorable trading conditions by staking above-average passes. Further details of this feature have not yet been disclosed.
All of tokens are divided into the Mining part and the Non-mining part.
Mining part: Total Supply of the mining part is 600M. Currently, around 1M DERI will be unlocked for liquidity mining per week, including 3 pools (trading pools, DERI-BUSD CakeLP staking, DERI-USDT SLP staking).
Non-mining part: The initial total supply of the non-mining part is 400M, which is distributed to the team, investors and foundation (project treasury). Among them, 260M are locked for the team and investors with a 2-year linearly releasing plan. 140M is for treasury, which is unlocked from day one. The distribution of tokens is shown in the figure below.
Deri Protocol was started by Dfactory Ltd., the issuing organization behind Deri Protocol, in February 2021. The founding team members are 0xAlpha and Richard Chen.
