A project called NFTPerp was, as the name suggests, a perpetual futures exchange for NFTs, allowing people to take long or short positions against NFTs. It relied on a vAMM — virtual automated market maker — which essentially simulates liquidity without there being any real money in the system. Such a system can be thrown out of whack if there is imbalance in the positions people are taking — for example, if everyone tries to go short on NFTs in a brutal bear market.

So anyway, that's exactly what happened. NFTPerp announced that they would be sunsetting their popular beta project after accruing bad debt.

How they're going about it has been controversial among the successful traders on the platform: essentially, those who were in profit will lose their unrealized gains, while those who had lost money in their trades will have their losses waived. "Nftperp stealing profits from winner [unrealized profit and loss] to backstop losers UPNL is insane to me", wrote one commenter. Another wrote, "If anyone else is considering NFT perps, please have the 'what happens when the illiquid market goes to zero overnight' plans clearly in place from the beginning."

Not to be deterred, the team is already preparing to launch a "v2". May it go as well as their first attempt.

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