After witnessing an impressive trading volume of 280,000 ETH (equivalent to $518,000,000) during the V1 private beta phase, the decision has been made to sunset the closed beta contracts.
To ensure the stability of the protocol and safeguard the interests of users, the V1 contracts have been paused immediately. It is important to note that all user margins (WETH) will be returned, ensuring that no user will experience a loss of their initial collateral or margin.
The decision to pause the V1 contracts stems from several reasons. Firstly, the insights gathered over the past seven months of the private beta phase have revealed that the V1 vAMM (virtual automated market maker) model is not scalable. Additionally, internal team mistakes related to liquidation logic and accounting errors have resulted in the accrual of bad debt. To address this, the team has decided to step in and backstop the losses. 
The closure of V1 paves the way for the much-anticipated launch of nftperp V2. By pausing the contracts, the platform aims to prevent users from incurring financial losses and losing their funds. Market closure at current prices would have resulted in unfavorable outcomes for users. The team recognizes that allowing a race to exit first would not be a satisfactory resolution for all participants. By identifying user margin deposits precisely, nftperp will refund all users’ collateral to ensure their funds are protected.
In a positive move, users with negative unrealized PnL (Profit and Loss) will have 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 their pro-rata share of VNFTP tokens, corresponding to their unrealized gains. It’s worth noting that all position states have been saved as of block timestamp #: 108596965.
Looking ahead, nftperp is excited about the future prospects of the protocol and the launch of V2. With dedicated resources focused on the next iteration, the team aims to deliver an enhanced trading experience and further advancements in the NFT perpetual trading space.
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