ON–197: Derivatives 📊
Coverage on Drift, GMX, Zeta Markets, Gains & More.
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EXCLUSIVE ONCHAIN COVERAGE:
① Drift 👾
👥 Cindy Leow | Website | Dashboard
📈 Drift crosses $100M in TVL, $1B in 30D volume, $3B in cumulative volume
Drift is a perpetual DEX on Solana and is built as a hybrid DEX with a Just-in-Time intent system, fully onchain orderbook and a backstop vAMM. Drift's TVL is composed of TVL from insurance fund staking, liquidity provision, trading deposits and its cross-collateral market powered by a borrow/lend backend. Drift has captured over $3B in cumulative volume with 60k users and $100M TVL.
Drift hit 10k DAUs with >99% retail flow. The platform's DAUs has increased tenfold from a month ago, even after implementing a dynamic Sybil-resistant rent for filtering out spam accounts. A large percentage of Drift's volume is retail vs bots. Drift classifies any account trading >3k tx's a day as bots. Markouts (P&L immediately after trading) is a good indication of retail behavior — retail markouts tend to be negative vs. bots, meaning >99% of Drift's user base are retail users.
57% of Drift's total volume comes from orderbook matching, while 33% comes from AMMs (and ~5% from Just-in-Time RFQ). This shows that sophisticated market makers are providing liquidity on Drift's books for major caps, while the AMM provides more long tail liquidity for pairs that are more thinly traded in centralized venues (BONK, etc).
💦🔬 Tx-Level Alpha: This is an onchain market maker vault account run by circuit.trade that has made >$550k in profits from trading spreads and closing out funding rates on Drift. The vault is open for anyone to deposit from onchain.
② GMX 🫐
📈 GMX V2 crosses $7M in revenue since its launch in August
GMX V2 launched in August of 2023 on Arbitrum, introducing a new way for traders to gain access to synthetic assets with on-chain derivatives. This transformation led to liquidity providers having the ability to create optimal strategies with isolated AMM pools (known as GM pools), to increase their profitability and reduce the composition risk of assets in V1. Since going live, V2 has generated $7.21M in revenue, $4.82M for liquidity providers, $1.74M for GMX stakers, and $646.18k to treasury.
In the span of 5 months, OI for GMX V2 has peaked at $174.98M, bring the platform’s total OI to $220.6M. 84.2% of this is concentrated in BTC and ETH and the remaining 15.8% is in the SOL, AVAX, ARB, and other altcoin markets.
With the transition from V1 to V2, GMX TVL has grown to $561.65M and into a broader range of assets, including SOL and ARB. GM pools’ design has allowed for expansion into new markets. The market depth of these assets will continue to grow to further accessibility for on-chain traders.
💦🔬 Tx-Level Alpha: Earlier this month, the largest trade took place of over $15.33M volume on GMX V2, emphasizing the growing interest in the onchain derivatives landscape. Where a trader took a 15.33x long with $1M on BTC, over the course of their trading journey since late October, they've earned $1.6M net profit and paid $917.9K in fees to the protocol. Their favourite market to trade is BTC and have been profitable 161 of the 216 times they've opened a trade (win rate of 74.54%).
③ Zeta Markets 🧑💻
📈 Zeta nears 50% perps market share on Solana following their Z-Score incentive campaign
Zeta's Z-Score incentive program, a prelude to the launch of their token, has driven >500% MoM user growth on the platform. Z-Score, combined with renewed interest in Solana, spiked growth to the point where Zeta was adding 2k net new users per day. The growth pushed Zeta past $1BN in cumulative volume traded with close to 50% of that activity happening in just the last 30 days.
Zeta is the fastest growing derivatives DEX in crypto on a 30-day basis at the time of writing. In line with Solana’s most recent surge in user growth, kicked off by Jupiter & Jito announcing tokens (amongst others), Zeta grew its market share on perpetual swaps to north of 40% on Solana.
Zeta was most recently selected by Jupiter to be their first partner on a new initiative called Jupiter Start, aimed at empowering Solana users and building community trust within the ecosystem. The day after the initiative launched, Zeta hit a record $50M in 24h trading volume.
💦🔬 Tx-Level Alpha: A liquidator is bundling 3 separate operations to execute a liquidation atomically using the Zeta SDK. The liquidator earned $556 USD on the transaction. Zeta’s SDK is open source, meaning anyone can become a liquidator.
④ Gains Network 🍏
📈 gTrade crosses $50B+ in volume, 17k traders
gTrade is a perpetual decentralized exchange, allowing up to 150x leverage on crypto, 250x on commodities and 1000x on forex. Currently integrated on Arbitrum and Polygon, gTrade has reached over $53B in volume. After focusing on a tokenomics upgrade and increasing stakers’ revenue by over 60%, the project is now developing advancing trading features across crypto, commodity, and Forex markets.
Gains is attracting FX traders: Forex volume comprises roughly 50% in average of total weekly volume. Top FX pairs in the last 30D in terms of volume are USD/JPY ($208m), AUD/USD ($91m) and GBP/USD ( $89m).
The average leverage on gTrade is around 80x, which tends to be higher than what some competitors allow as the maximum level.
💦🔬 Tx-Level Alpha: Gains’ leading trader over the past 90 days has achieved a net profit of $133,000 trading the SOL/USD pair. Starting with a collateral of $63,000 in DAI, he opened a 21x leverage position to capitalize on Solana's rising prices.
⑤ Polynomial ❄️
📈 Polynomial crosses $4.20B+ in volume with 69+ markets
Polynomial Trade is a decentralized derivative exchange which allows users up to 50x leverage with a large array of assets and deep liquidity provided by Synthetix. As of December, Polynomial has surpassed $4.2B in trading volume.
Polynomial is at the forefront of Account Abstraction, which enables traders to use smart contract wallets to interact with the platform. Since launch in April, 22k+ accounts have been created by traders to boast a total TVL of $4M+
Polynomial provides traders with more than 75 different markets. On average, about 20-30% of the activity on the platform comes from trades that don't involve Ethereum (ETH) or Bitcoin (BTC).
💦🔬 Tx-Level Alpha: When the funding rates are high, the system relies on arbitrageurs to balance the skew. The following $250k transaction takes a long position on Aave and shorts on Polynomial to bring the skew back to normal.
⑥ Dopex 💎
📈 Dopex V2 Crosses $50M+ In Option Volume After One Month
Dopex V2 is an options trading platform where traders can leverage any strategy without fear of liquidation. CLAMM, the first arm of V2 which uses concentrated liquidity positions to sell options, achieved $50M in options volume with only $2.2M in TVL in about 1 month of launching.
V2 generated around $150K in options premiums and fees, excluding swap fees, via Uniswap V3 in 1 month.
Dopex V2 is an example of a system where traders can profit, even after accounting for fees. As evidence for this, traders achieved ~$175K in net profit (PNL) within a month of launch, and with a TVL of only $2.2M. The system is a win-win platform, where traders and LPs emerge ahead.
💦🔬 Tx-Level Alpha: Dopex’s top trader, brought in an outstanding $50K in realized profits and $28K in positive PnL. He also paid $735 in gas fees to Arbitrum.
Quick Links: Disclosures
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