NFTPerp, a platform for trading NFT perpetual futures, has made the decision to close its private beta version, NFTPerp v1, due to scalability issues and internal mistakes. The primary goal of this closure is to prevent volatility and bad debt from affecting the protocol and its users. To ensure that users did not lose their initial collateral, all margins were promptly returned. The decision to pause the v1 contracts was made after a comprehensive seven-month private beta testing period, which uncovered scalability issues with the v1 vAMM model:
- Internal team mistakes in liquidation logic
- Accounting errors resulted in bad debt, which required the team to step in and backstop the protocol
As part of the closure, users with negative unrealized profit and loss (PnL) have had their unrealized losses waived, receiving their full margin back. On the other hand, users with positive unrealized PnL will receive their margin back, along with a proportionate share of vNFTP tokens based on their unrealized profit.
While this closure represents a setback for NFT perpetual futures, it paves the way for improvements in open interest scaling and more robust liquidation logic in the upcoming NFTPerp v2.
To learn more about NFT perps, PRO members can check out The Rise of NFT Perpetual Futures