What is the deal with Perpetual Protocol and Uniswap?
The following is a discussion of why and how we build on top of Uniswap.
Perpetual Protocol Curie (v2) permissionlessly builds on top of Uniswap v3, using Uniswap's on-chain infrastructure as a key component of the protocol. This is done to solve a major bottleneck in v1—static liquidity. In addition, building on Uniswap v3 allows Perpetual Protocol to create markets with concentrated liquidity without reinventing the wheel, and makes it easy for partners familiar with Uniswap to integrate with and build on Perpetual Protocol. Classic money lego.
Perpetual Protocol uses Uniswap v3 as a trading engine, so all trades occur on Uni v3, mediated by the Perpetual Protocol clearinghouse. From a trader's perspective, you will trade on Perpetual Protocol, while under the hood actual token swaps are seamlessly happening in Uniswap pools.
Perpetual Protocol v1 used static, fixed liquidity for each market, and its design made implementing dynamic liquidity very challenging. V2 allows dynamic liquidity by introducing makers (LPs). This means liquidity is provided by dynamic actors who can be responsive to market conditions, ie. place their liquidity in price ranges corresponding to their read of the market. This create a much more stable and sustainable system overall.
A deeper look at Uniswap & Perpetual Protocol