This document builds upon this overview 👇
<aside> 🚧 Further technical details will be added soon
</aside>
Quote vs base asset
Fees are applied to the amount of quote token returned qr by Uniswap in order to account for incomplete swaps, slippage etc.
The Perpetual Protocol clearinghouse design allows for more fee tiers than currently offered by Uniswap.
If Uniswap governance votes to activate a protocol fee, this can be handled via accounting in the protocol clearinghouse.
For example, if the Uniswap protocol fee is 0.05%, the clearinghouse will mint an additional 0.05% of quote token for each trade to be provided to Uniswap.
Since quote tokens on Perpetual Protocol have zero market value or utility, there is no loss to Perpetual Protocol.
A known issue with Uniswap v3 reported by Chainsight Analytics (and earlier earlier) is 'just-in-time' liquidity from MEV bots used to add and remove liquidity within a single block. This is in essence a sandwich attack and can also affect Perpetual Protocol in its current form.