Last year, Exchequer granted funding to Vasili Serchev to build a decentralized perpetual futures trading protocol as part of Sovryn Labs, an incubator for new projects in the Sovryn ecosystem. Vasili quickly recruited a team and in July of this year they delivered Sovryn Perpetuals, one of the most performant decentralized perpetual futures protocols on the market. However, due to the market and underlying chain technology not advancing as fast as we had initially anticipated, the decision was made to discontinue development for now.

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The Sovryn Perpetuals team has a lot to be proud of. One of the goals for the protocol design was to deliver tight spreads and low slippage even with relatively low liquidity. Sovryn Perpetuals indeed proved highly performant, providing the lowest spread to liquidity ratio of any similar system we are aware of.

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Despite the impressive technical performance of Sovryn Perpetuals, the market downturn in Q4 2021 and extended bear market through 2022 to the current date, necessitated a reprioritization of resources. Exchequer needed to focus the remainder of the treasury on a product that was both unique in the marketplace and could grow in both good and bad macro market conditions. Sovryn Perpetuals would require significant additional investment to reach that kind of sustainability. Additionally, Sovryn Perpetuals would require transaction throughput that RSK is unable to provide. Originally, it was envisioned that Perpetuals would be launched on a rollup but that technology has taken longer than expected to mature. Therefore, Exchequer has decided that, at this time, additional funding for perpetuals would be premature. Funding and a relaunch of perpetuals can be examined in the future, when the underlying platform is able to support the required throughput and market conditions have improved.

Exchequer will now focus resources on the Zero protocol, which launched to great anticipation and excitement and within a few months grew to several hundred RBTC TVL despite the market downturn and despite being available on an invite-only basis. Zero at this time is able to graduate from Labs while Sovryn Perpetuals will not. Exchequer informed the Perpetuals team that they would only receive funding from Exchequer to work through the end of 2022, and they would need to find other sources of funding if they wanted to continue working on Sovryn Perpetuals. The Sovryn Perpetuals team instead opted to disband, leaving as their final task the sunsetting of the Sovryn Perpetuals protocol on BSC.

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As of today, the Sovryn Perpetuals protocol is no longer maintained. With no more open positions on the protocol, the contracts have now been paused by the governance multisig. The frontend has also been taken offline and is no longer linked from the Sovryn app. The code is and always will be available under an open source license here for anyone interested for educational, research, or any other purposes.

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Exchequer and the rest of the Sovryn contributor community thanks Vasili and the rest of the Sovryn Perpetuals team for their excellent work. At minimum, Sovryn Perpetuals was an experiment worth running. With the right conditions, it can be revisited and perhaps graduate from Labs in the future.  

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Stay Sovryn!