An Overview of the Perpetual DEX Industry
The collapse of FTX is still fresh in the mind of users, with many still fearful of keeping funds on centralized platforms.
This presents a unique growth opportunity for decentralized perps trading platform.
Trading volume has increased by 38% the past two months, with total daily trading volume increasing from $931M to $1288M.
This is a massive increase; Binance’s daily trading volume has dropped from $14.4B to $7.4B, almost ~50%.
With an increasing number of on-chain perps, the growth of decentralized perps trading industry is inevitable.
We narrowed the analysis to the top 5 decentralized perps by trading volume over the same time period.
dYdX dominates trading volume
Having launched since 2017, dYdX as the oldest derivatives platform currently makes up for 61.5% of the total trading volume with $46.91B traded, followed by GMX with $12.4B and incumbent Level Finance at $7.1B.
GMX leads fee generation
GMX has generated $20.45M in trading fees, making up 43.7% of total fees generated. The imminent launch of GMX V2 which will support trading of synthetic assets will exponentially increase trading fees generated.
dYdX records the highest daily active users (DAU)
DAU on dYdX have been relatively consistent, recently hitting an ATH of 3.7k users on March 10th.
With the upcoming launch of dYdX V4 and rumours of revenue sharing, the number of users could potentially rise even further.
Here are some comparative metrics we used to further analyze the perps trading platform:
- Fees-to-Trading Volume ratio
- Trading volume/User
- Fees shared with protocol community
We’ll expand more on each metrics in the following tweets.
Fees to Trading Volume Ratio
The fee-to-trading-volume ratio shows how much fee is generated per $1000 in trade volume; the lower the ratio, the cheaper is it to trade on the platform.
dYdX currently has the lowest ratio at 0.24, while GMX tops the charts at 1.65.
Daily Trading Volume per User
This metrics indicates how much a user trades on average, and Level Finance leads at ~$2.3M traded per user.
Data also suggests that GMX users are generally more risk adverse, trading smaller volumes than users on other platforms.
Revenue sharing
Gains Network shares 32.5% of collected fees to $GNS stakers, followed by GMX with 30% of fees collected.
Gains Network is well-positioned to be the most profitable perps trading platform, recently coming second in total earnings among on-chain perps platform.
Summary
The decentralized perps space is primed for growth, fueled by important upcoming events happening soon.
Kwenta, a platform built on Synthetix’s derivatives platform, is already making waves by offering rewards on top of weekly rewards by Synthetix.
With the continuous launch of new on-chain perpetual trading platforms offering an ever-increasing variety of products, the adoption of the on-chain perps trading industry will only grow from here.
Although centralized platforms still dominate trading volume, the decentralized perps landscape is constantly evolving as protocols introduce new products to users.
As such, innovation often attracts a flow of liquidity and the future looks promising.