Rapid Insights: Contango cPerps

Demand for onchain spot leverage is largely unmet in DeFi today. Onchain money markets can facilitate conservative leverage or more aggressive leverage through recursive borrowing and supplying, but most tools lack the full suite of support tools geared toward traders. Contango aims to offer onchain leverage trading using automated looping strategies built on top of spot and money market protocols like Aave and Uniswap, while also providing a professional trading user interface with fully featured tools for trading analytics and simple automation. 

The main difference between cPerps and other onchain perps protocols is that liquidity is sourced from existing onchain spot liquidity, so there are no cPerps liquidity providers who are exposed to trader profit/loss or impermanent loss. Additionally, cPerps utilizes existing money market liquidity as opposed to native protocol liquidity (e.g. Futureswap v4). In addition to not being dependent on internally sourced liquidity, designs like this also allow looping protocols to outsource all price discovery and liquidation risks to third party protocols.