Title: The Potential and Key Players of the Derivatives Market in the Bull Market
Introduction:
In the world of bull markets, one sector that is bound to explode is the derivatives market. This market can be broadly categorized into two types: concept-driven and data-driven. While the former involves trading new concepts and ideas, the latter focuses on products with substantial data growth. In the current bull market, trading platforms like BTC contracts have witnessed a significant increase in trading volumes, with BNB, KCS, and OKB experiencing exponential growth. This article explores the potential of decentralized derivatives markets and highlights key players in this field.
1. The Potential of Decentralized Derivatives Markets:
Decentralized exchanges (DEXs) have already surpassed spot trading volumes on centralized exchanges. For instance, in the previous bull market, Uniswap and Sushiswap gained immense popularity as DEXs. Despite initial resistance from platforms like Binance, OKEx, and Huobi, these DEXs eventually gained acceptance and even surpassed second-tier centralized exchanges in terms of trading volumes and market capitalization. However, decentralized derivatives projects did not witness significant growth due to infrastructure limitations and the need for higher performance on public chains. Nevertheless, with the development of infrastructure and continuous innovation in the derivatives market, user experience has significantly improved.
Although decentralized derivatives are still undervalued based on data, they have the potential to grow significantly. For example, while the spot trading volume stands at $50 billion, DEXs like Uniswap and Jupiter have a 24-hour trading volume of approximately $7 billion, accounting for only 14%. In contrast, centralized exchanges have a contract trading volume of $150 billion, with decentralized contract trading at $8 billion, representing only 5%. Therefore, decentralized derivatives have at least three times the potential compared to spot trading. Additionally, with the bull market approaching, there is a possibility of more than a tenfold increase in trading volumes across various market segments.
2. Key Players in the Derivatives Market:
In the realm of decentralized derivatives, prominent names include dydx and GMX. Dydx, an established decentralized derivatives market, has gained immense popularity, supporting 67 cryptocurrencies with low fees, deep liquidity, and leverage of up to 20x. Its daily trading volume consistently ranks among the top three, reaching around $2 billion. With a circulating market capitalization of $1.1 billion and a fully diluted valuation of $1.5 billion, dydx continues to thrive.
GMX, originating from Arbitrum, stands out due to its innovative use of Automated Market Maker (AMM) mechanisms and LP pools. Unlike traditional order book matching, GMX facilitates peer-to-pool trading, enabling LP providers to earn transaction fees and MM fees. While GMX experienced significant trading volumes and high expectations in 2022 and 2023, it has faced tough competition from other outstanding players in the decentralized derivatives market. Currently, GMX has a daily trading volume ranging from $200 million to $500 million, with a circulating market capitalization of $320 million.
SynFutures, the leading player in terms of trading volume, has caught our attention. With a 24-hour trading volume exceeding dydx by $300 million, SynFutures has witnessed a remarkable surge in trading activity since March 2024.
According to DefiLlama data, SynFutures’ trading volume started to improve significantly from March 2024. The introduction of the V3 protocol on February 29th played a crucial role in this development. Since then, SynFutures’ daily trading volume has consistently remained high, reaching as high as $1.7 billion. SynFutures stands out due to its Oyster AMM (oAMM) system, which ensures individual liquidity pools for each derivative pair, mitigating systemic risks. Additionally, SynFutures allows liquidity concentration within specific price ranges, improving capital utilization and depth. With a trading volume-to-TV ratio of 19.48, SynFutures surpasses dydx’s 2.68 and GMX’s 0.34.
Conclusion:
In the current bull market, it is essential to pay attention to the derivatives market. The trading volume in this market is expected to grow at least tenfold, reflecting significant fundamental improvements. While there is fierce competition among derivatives platforms, dydx and GMX remain undervalued compared to spot trading. However, SynFutures, with its recent surge in trading volume, deserves special attention. As it has not yet launched its token, early participants can benefit from its potential growth. SynFutures, with its impressive trading volume and the unique feature of permissionless listing, has the potential to become a game-changer in this field.
