Phezzan Protocol orderbook style testnet litepaper

Phezzan Protocol is an orderbook perpetual DEX with Permissionless LP on zkSync 2.0. Phezzan Protocol orderbook style testnet is live on zkSync 2.0 testnet since November 2022.

The mission of Phezzan is to Democratize Perpetual Trading for All.

1. Phezzan Protocol

1.1 Democratize Perpetual Trading for All

The Phezzan team believes DeFi is for the masses, not just for a chosen few.

Phezzan will contribute to this goal by bringing retail liquidity, which is one of the best DeFi innovations that previously existed mostly on AMMs, to orderbook, where there is no impermanent loss.

For more information on how Phezzan will bring retail liquidity to orderbooks, please refer to “Phezzan is bringing retail liquidity to orderbook DEXs

Phezzan will launch its mainnet on zkSync 2.0 first, where the best trading speed and lowest gas fee is available without sacrificing security.

1.2 Phezzan Protocol Design

1.2.1 Phezzan uses a pure orderbook model

Phezzan Protocol is an orderbook DEX. The Phezzan team decided to pivot from AMM to orderbook because we found it’s difficult to solve the impermanent loss issue.

1.2.2 Architecture Diagram

Initially Phezzan will have its matching engine and orderbook off-chain while order settlement is on-chain.

In the future, Phezzan will explore the possibility of having the matching engine and orderbook fully on-chain.

1.2.3 Collateral, Trading Pairs, and Leverage

Phezzan Protocol supports $USDC as collateral. In the future, Phezzan will support multi-collateral. Users can deposit stablecoins, yield-bearing assets, and other crypto coins as collateral.

Trading pairs supported on Phezzan Protocol testnet will include ETH and 2-3 coins that retail investors love, such as $APE or $APT.

Phezzan Protocol testnet supports up to 20x leverage. It will support higher leverage in the future.

1.2.4 Trading Fee

Phezzan Protocol's trading fee will be 0.1% of the trading size, with the minimum fee being $0.5 to cover gas fees. Traders don't need to worry about gas fees. 50% of trading fee will go to liquidity providers (LPs), and the rest (50%) will go to Phezzan Protocol.

Phezzan Protocol has tier-based trading fee discounts. Users with higher trading volumes can get more discounts in trading fees.

Phezzan Protocol will also have referral programs. Referees will get a 5% discount on trading fees in their first 6 months of trading. Referrers will get 10% of referees’ trading fee.

1.3 Features in Phezzan mainnet V1

For Phezzan Liquidity Marketplace and its features, please refer to “Phezzan is bringing retail liquidity to orderbook DEXs”.

Phezzan’s orderbook style testnet is only a prototype. The following features are either built already or will be built before Phezzan Protocol mainnet V1 launches:

1.3.1 Limit and Stop Orders

Phezzan Protocol will support both limit and stop orders before its mainnet launch. Right now Phezzan only supports limit orders.

1.3.2 Trading Fee Discounts

There will be trading fee discounts based on trading volume on Phezzan.

1.3.3 Referral Programs

There will be referral programs on Phezzan.

1.3.4 Perks for Phezzan Space Bar holders

Phezzan Space Bar is a series of NFTs airdropped to early contributors within the Phezzan community. In the future they will be airdropped to selected community contributors, traders, liquidity providers, etc.

Phezzan Space Bar holders will enjoy trading fee discounts and referral program boosts on Phezzan.

1.3.5 KYC/AML and Geofencing

There might be KYC/AML for some market making strategies.

Phezzan will implement geofencing for certain jurisdictions such as USA.

1.3.6 No Gas Fee

On its mainnet, Phezzan will pay gas for all users.

1.3.7 Friendly UI and UX

The Phezzan team has been making social networking products for years. We understand the importance of a good UI/UX for retail investors. Phezzan Protocol will strive to be the most user friendly perpetual DEX.

For example, on Phezzan, the windows within the trading page can be dragged and resized based on a user’s preference.

1.3.8 Cross Margin

On its mainnet, Phezzan will support cross margin. Right now, only isolated margin is supported.

1.4 Future Phezzan features

The following features will be pushed out gradually after Phezzan Protocol mainnet V1 launches.

1.4.1 Trading Terminal Integration

Lots of professional traders use trading terminals instead of the native UI/UX of the underlying exchange. Most DEXs now do not support trading terminal integration. Phezzan will.

1.4.2 Multi-Collateral Support

Phezzan Protocol will support multi-collateral. Users can deposit stablecoins, yield-bearing assets, and other coins as collateral.

1.4.3 Yield Bearing Assets as Collateral

Phezzan Protocol will support yield bearing assets, such as stETH and aDAI (listed as examples, specific assets will be determined before mainnet launch), as collateral. Traders and LPs can earn interests while using Phezzan.

1.4.4 Trading Tools

Phezzan will support all kinds of trading tools such as iceberg orders, VWAP, copy trading, One-Cancels-the-Other Order, and trailing stop orders.

1.4.5 Shared Liquidity across Major zkEVMs

Phezzan will launch on all major zkEVMs and share liquidity across them.

2. Tokenomics and Governance

Phezzan Protocol will not launch its token until there is sufficient Product-Market Fit for the following reasons.

  • To let the Phezzan team focus on building a meaningful product in the early stages;

  • To first grow Phezzan Protocol organically;

  • To give the Phezzan team more time to design better tokenomics;

  • To align Phezzan Protocol with like-minded long-term thinking users and investors.

The Phezzan team believes in the power of community and decentralization. Once Phezzan Protocol reaches Product-Market Fit, the Phezzan team will pass the control of Phezzan Protocol to the Phezzan community gradually.

For details about Phezzan tokenomics and governance, please refer to “A Few Thoughts on Phezzan Tokenomics

3. Roadmap

Yes the whole roadmap has been delayed. Sorry about that

3.1 Testnet

Phezzan Protocol launched its AMM style testnet on Rinkeby and zkSync 2.0 testnet.

Phezzan Protocol orderbook style testnet is will be live on zkSync 2.0 testnet in November 2022.

3.2 Mainnet V1

The Phezzan team plans to launch mainnet V1 in Q1 2023.

3.3 Mainnet V2

The Phezzan team plans to launch Phezzan Protocol V2 alongside Phezzan token in Q2 or Q3 2023. Phezzan Protocol V2 whitepaper will cover the details.

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