Original author: Emperor Osmo

Translated by: luccy, BlockBeats

With the booming development of the cryptocurrency derivatives market, it is expected that the market revenue will increase from the current 960 million US dollars to 231.2 billion US dollars by 2030. Binance recently released a DeFi derivatives report, which delves into how to capture the growth trend of derivatives. The following is a report analysis by cryptocurrency KOL Emperor Osmo on how to leverage this trend. BlockBeats has compiled and translated the following.

Overview

According to Binance's data, the cryptocurrency derivatives market currently holds a 74.2% market share in total trading volume. The monthly trading volume of cryptocurrency derivatives has reached 1.9 trillion US dollars, which has tripled in the past three years. During this period, the derivatives market has shown a diversified and growing trend.

Despite the high degree of market diversification, perpetual contract trading accounts for 90% of market trading volume. This is because in a decentralized environment, the modeling of perpetual decentralized exchange platforms (Perp DEXs) is simpler than that of options. In addition, many perpetual decentralized exchange platforms are able to provide a similar experience to centralized exchange platforms (CEX).

Protocol Worth Paying Attention To

The popularity of Layer 2 solutions (L2s) has led to the rapid expansion of the derivatives market, with Arbitrum leading the way. In the past year, numerous protocols have gone live, making it challenging to keep track and understand them. Here are six protocols worth paying attention to.

dYdX

dYdX is the largest decentralized perpetual contract trading platform that operates on an order book basis. As of 2023, its trading volume accounts for 69% and the total trading volume reaches 222.7 billion US dollars. They provide precise control for market makers, which plays a key role in expanding the range of product types.

GMX

GMX is the largest protocol in the Arbitrum ecosystem and the first project to launch a shared liquidity pool to maximize efficiency. Its innovative liquidity token, GLP, has been widely adopted by over 40 forked projects.

The recently launched GMX V2 has undergone significant reforms for high-volume traders, including:

- Introducing price impact and funding costs;

- Reduce transaction fees;

- Independent LPs;

- Integrating Chainlink low-latency oracle.

GainsNetwork

Gains is one of the most powerful and profitable perpetual DEXs that has migrated to Arbitrum, with a total daily trading volume of $65.1 million. Similar to GMX, GNS utilizes a single liquidity pool (gDAI) to support trading activities on the Gains Network. Due to its flexibility and user-friendly experience, the GainsNetwork platform has become one of the most popular decentralized trading platforms for trading forex.

MUX Protocol

MUX is a cross-chain leverage trading protocol that has been deployed on 5 different chains. Its trading volume has grown by over 300% this year, which can be attributed to its cross-chain strategy and real yield in liquidity supply. Protocol V3 will focus on achieving cross-chain aggregation, gathering liquidity from multiple networks such as Arbitrum, Optimism, BNB Chain, Avalanche, and Fantom. This will further strengthen the success of its aggregator.

Lyra

Lyra, as one of the largest options trading platforms in the market, stands out with its daily trading volume of up to 586,000 US dollars. The community warmly welcomes their expansion to Arbitrum, as it has become the central hub for most activities. Lyra is about to upgrade and promises to build the best decentralized options market in the DeFi field today, providing:

- Option combination margin;

- Cross-margining between options and perpetual contracts;

- Multi-asset collateral.

Dopex

Dopex has $20 million in TVL and is a powerful force in the options market. Despite having less assets under management than its competitors, it makes up for it with a diverse range of products, including Atlantic Straddles and interest rate options.

The Dopex V.2 update aims to reduce liquidity fragmentation. Users will be able to more effectively utilize centralized liquidity to create trading positions. Regarding this, @dLuxGMI has provided a great explanation: this comprehensive protocol update will significantly unify liquidity and enhance user experience.

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