Pear Protocol - Democratizing Institutional Strategies

Key Investment Merits

• ◆The protocol is value accretive to the token with 80% of historical and future revenues going to stakers and a buyback model in the pipeline. Assuming a 5x increase in monthly volume and current multiples; allocating at 20mm FDV would imply a 7x upside for the PEAR token which is detailed below.
• ◆Pear recently integrated Hyperliquid as an execution engine through the use of builder codes which provides Pear users with access to the deeply liquid, performant orderbook. Additionally, the PEAR token will be migrated to Hyperliquid imminently.
• ◆The team brings deep expertise, led by Huf.hl who spent over eight years on Deutsche Bank’s equity derivatives trading floor, specializing in systematic strategies and structured products.

• ◆User growth and volumes have been robust even while Pear's execution engines (Symmio, GMX and Vertex) have seen large drawdowns in volume showcasing clear PMF.

Pear protocol is the only crypto-native platform entirely dedicated to pair trading, which serves users seeking a venue to aggregate their pair trading execution. Pair trading is a highly nascent sub-set of trading that is under-served by both centralized and decentralized exchanges. Pear is uniquely positioned to capture significant market share within this niche while expanding its product suite to offer vaults and stat-arbitration strategies. 

As decentralized exchanges and perpetual swaps have grown in popularity, traders are increasingly interested in maximizing their profitability by adding additional legs to their trades. Pair trading is an optimal strategy for traders to enhance their returns, but performing these trades is challenging as it requires multiple instruments and disparate funding management. 

Executing pair trades in crypto involves a great deal of manual slippage, and is virtually unavailable to retail in traditional finance as leverage requires access to an institutional broker. Sophisticated crypto traders have to long/short assets in two separate trades, pull up a separate chart in TradingView to monitor relative performance and use a spreadsheet to monitor net funding costs. Crypto rails are uniquely equipped to enable a broader scope of investors to begin relative-value trading through the use of perpetual swaps.

Product

Pear protocol enables traders to execute long-short trades with a single-click utilizing Hyperliquid’s builder codes to integrate a deeply liquid, performant orderbook. Key features include: market + limit orders, TWAP’s, custom weightings, TP/SL on the ratio, one-click charting + position management and a cross-leg risk engine. 

Prior to the Hyperliquid update, Pear utilized GMX v1 as a liquidity source for isolated trades and Vertex’s CLOB for cross-margin trades which allowed for USDC margin to back both legs of the pair. Later on, SYMMIO’s intent-based router was introduced which enabled users to access over 250 perp markets and TP/SL logic. The value proposition of Pear is their routing platform that’s built above these platforms to enable pair trading by replicating synthetic pair positions. Pair trades can be executed in a single click, eliminating the need to create two separate positions. 

Additionally, Pear’s cross-leg risk engine creates a collateral sub-vault for each pair where the collateral is calibrated to the risk of the spread, not the notional value of each of the individual legs. This effectively reduces required margin by up to 60-80% for highly correlated pairs, and liquidations occur in a single transaction. 

Since the integration of builder codes, orders routed through Hyperliquid have amassed a majority of the total trading volume on the platform, totaling just over $90mm in volume. Within this same time-frame, user growth and retention has remained robust showcasing steady growth over the past year.

Other products in the pipeline include: 

• ◆Agent Pear which provides trade signals based on correlation, cointegration, Z-scores, beta and volatility. The agent uses a custom database for statistical arbitrage and API integrations for token unlocks, funding rates, liquidations, open interest, and long-short ratio data. A proprietary model is currently being developed by the team which will provide the trade signals.
• ◆Vaults which will enable users to allocate capital to strategies such as stat-arb. Three vaults will be available initially and later on community vaults will be enabled through a permissionless launch mechanism. 
• ◆An institutional terminal which is being built to meet the demand for a one-click pair trading solution from institutional users and large traders. Fees will be reduced for institutional users, but volumes will likely be exponentially higher. 

Pear generates revenue by charging a 0.06% protocol fee—recently reduced from 0.13%—on both the opening and closing of positions across its own platform as well as all partnered platforms. Monetization for the vault will include charging a similar fee. Additionally, users will have to stake PEAR to access advanced trading signals from Agent Pear.

Market Sizing

It’s estimated that 10% of aggregate volume in traditional finance is composed of pair-trading. The following market sizing takes this metric into account as it can imply how much of perpetual swap volume in crypto will be attributed to pair trading as crypto’s pair trading market share converges on traditional finance’s. 

Based on the assumptions above, it can be determined that there is $28.97bn in prospective monthly pair trading volume. Applying conservative penetration rates of this volume for Pear, assuming zero growth of the perpetual swap market and the current FDV/sales multiple of 35x, the following scenarios can be determined:

Bear: Growth declines from current monthly volumes of 94mm to 70mm; this case would imply a valuation of $17.6mm. 

Base: Modest growth of monthly volumes from 94mm to 210mm; this case would imply a valuation of $52.5mm. 

Bull: Monthly volume on the platform grows significantly from 94mm to 560mm; this case would imply a valuation of $140mm. 

Tokenomics

Prior to the institutional round last month, tokenomics for PEAR included a 44% treasury allocation for ecosystem development, 13% to private investors, 20% to the team, and 10% to the FJORD IDO. The June raise was non-dilutive as it simply shifted tokens from the treasury to funds. The chart below shows the updated tokenomics inclusive of the newer batch of institutional investors and burns:

Notable dates within the unlock schedule: 

• ◆On September 27th, 2025, vesting begins for the initial private round investors as 50% of their allocation (~77mm tokens) unlocks and the rest vests linearly. 
  • ◆There will be a 77mm token burn on the same day, reducing the max supply to 852,219,528. 
• ◆On September 28th, 2025, the recent institutional round allocation will begin vesting daily over the course of the next 12 months. Their cost basis was $0.0203 which was deduced from a 15% premium to spot price over a 30 ay lookback window.
• ◆In March 2026, the team/advisor allocation begins their 18 month vesting schedule with 50% unlocked initially and the rest released monthly.  

The team has also acquired a ticker from the Hyperliquid auction, and a spot listing on the exchange is imminent. This will increase liquidity and discoverability for the PEAR token, as current pools on Arbitrum are highly illiquid, preventing larger investors from buying PEAR in the open market. Additionally, allocating a portion of fees to buyback and burn PEAR will be decided in a future governance proposal; this would improve the current volume delta of -$41k (cumulative delta on the Arbitrum Camelot pool at the time of writing).

Conclusion

Pear provides the means for traders to add a variety of strategies to their toolkit, which is constantly being expanded through new product offerings. By enabling traders to deploy capital into actively managed vaults and converse with AI to obtain signals, traders on Pear will be better equipped to stay plugged in to the market.

Throughout the course of a 95% drawdown of the PEAR token, the team has proven their commitment to providing value to their users by working with them directly while building out the platform. As market-neutral strategies continue to proliferate in crypto markets, the range of users Pear can deliver value to will grow in tandem.