Perpetual futures are one of the most traded instruments within crypto, with volumes that dwarf spot trading.
These instruments enjoy greater parity with spot prices relative to futures and enable capital efficiency through leverage.
However, most perp volume resides on CEXs.
Despite the multitude of designs to try and bring perpetuals to DeFi, most still lack strong adoption.
dYdX is an outlier, but they use a cheat code of sorts – a centralized order book and matching engine rather than an on-chain one.
GMX – an oracle-based spot and leveraged trading DEX – flipped the game by bringing the simplicity of perpetuals to leveraged trading.
Of late, GMX has found a strong product-market fit with traders and liquidity providers alike.
GMX’s success has resulted in competitors attempting to replicate it with designs inspired by GMX.
Mycelium (previously TracerDAO) and MUX (previously MCDEX) are two protocols designed very similarly to GMX.
Mycelium is a direct fork of the GMX codebase with some changes, while MUX is not a fork – it’s using an adjusted codebase from a previous iteration of its product (MCDEX v3).
With that being said, the current design is inspired by and competes with GMX.
GMX has performed well over the past few months, with volumes reaching a high of $808M on Sep. 13, 2022.
Mycelium and MUX initially gained significant traction, capturing 18% and 19% of volume share at one point. Mycelium volumes peaked at ~$60M on Sep. 15, 2022, while MUX volumes hit a peak of ~$86M on Aug. 26, 2022.
Most protocols bootstrap their liquidity and users through token incentives.
This has proven to be unsustainable, as the tokens are usually sold upon farming, and mercenary liquidity migrates to greener pastures once it finds more lucrative places to yield farm.
GMX has proven that its model can generate lucrative real yields for its token holders and LPs.
These fees are generated organically through spot swap fees and leveraged trading fees. Consequently, that’s why attempting to replicate this success is worthwhile.
From Aug. 2022 through mid-Oct. 2022, GMX has consistently grown its daily protocol fees, earning ~$7.8M for GMX stakers over that time. On the other hand, MYC and veMUX stakers earned $394K and $478K over the same time period.
Recently, one of high potential Derivatives market Mango Market was hacked even though the hacker insisted that it was a just system manipulation.
The hacker and some supporters seem to be in the side of Aptos projects, blaming Solana.
They joined in Solana chain early last year and then opend some DEX and manipulated many data for themselves and now blaming Solana chain with their own crimes and run away for new cash cow chain Aptos or Sui.
Mango is very good approach and has many advanced features for Solana and all crypto sides. It could give very good lessons learned for followers.
But some hackers and immoral fake whistle blowers ruined that.
I hope DEX and all derivatives markets will grow more and develop itself enough to the level to compete with CEX. But still many immoral and immature childish programmers are there as potential bombs.
One of most dangerous enemy of Crypto is Crypto developer and programmer.
Source: Delphi Digital