How a #DeFi derivatives exchange is catching up to the big boys.
A thread 🧵 on @dYdX and the metrics to back up their push for dominance.
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I've made a video on #dydx and how you can use it with @TheBirbNest that you can watch here:
DYDX has slowly become one of the best places to trade perpetual futures.
Only needing an EVM wallet, it is one of the first #DeFi DEX's to offer reliable trading options. You can use leverage, or simply set all types of limit orders on the exchange.
But let's look at the data.
@TheBlock__ has a nice chart showing how DEX spot trading volume has been constantly gaining on CEX spot trading.
This is in spite of the current market environment.
If we look into the TVL on @dYdX we can see that it has remained really consistant since Nov 2021, something most #DeFi dApps cannot say.
Next we look at their weekly Volume, and though this has also passed its highs from Oct 2021, We have still had nice volume throughout 2022.
Breaking down the volume more we can observe that #BTC & #ETH continue to be the most traded pairs on the platform.
Next I want to show Open Interest, and even though it had it's high in Nov 2021, the pullback in OI is directly correlated to price and overall interest from users.
Traders are less willing to take on risk in the current environment. Even then, OI has remained high.
Finally looking at daily active traders, we can see that it also matches the OI as there have been less traders on average since the Nov top.
Something that is very interesting is how #dydx compares in OI against other CEXs.
Currently in # 11 place for #BTC OI, it is ahead of some big CEXs like Kraken.
It sits in # 9th place for #ETH OI. Ahead of Bitmex and not far from the CME.
This shows that @dydx is gaining ground for traders that are trading using any type of futures derivatives.
It will be interesting to see if they can continue to gain against CEXs over the next few years.
@dYdX offers gas-less trading & on ramping from #ETH , it also rewards it's traders, with their $DYDX tokens.
Though their native toke has not done too well, it would not take much for them to begin directing their revenue toward their stakers for it to be come very attractive
When you look at their Total revenue (cumulative) vs the P/S ratio you can get an idea on just how much #dydx holders could stand to gain if these rewards were to be turned on.
For now, the token is not as attractive as the platform that has been created, though it would not take much to make it a token worth holding as the platforms stats speak for themselves.
#dydx is clearly by traders, for traders. Any trader appreciates their good UX, kudos
#dydx is a platform I have tried and works seamlessly for trading. Moving forward I will be probably moving some of my trading onto it, and will be monitoring the token as it could become quite the gem with some changes being implemented.
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Mastering the Subtle Art of Funding Rate Arbitrage:
Exploiting the Funding Rate Discrepancies Between CEXs and DEXs.
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1/ Today, let's explore a "Highly profitable trading strategy" that exists in the world of DEXs vs CEXs, namely - Funding Rate Arbitrage.
We will highlight howe you can use this strategy on @HyperliquidX by using the stats page as a resource.
https://t.co/gbDcx7wfnjhyperliquid.thunderhead.xyz
2/ Funding rate is a tool used in perpetual futures markets to tether the contract price to the spot price.
Traders opposing the market trend compensate those aligning with it.
I went through the @CALC_Finance's innovative DCA Plus whitepaper so you don't need to.
It employs machine learning for a dynamic Dollar-Cost Averaging (DCA) approach.
1/14 🧵
2/14 Let's start with why this matters. Crypto markets are known for their volatility, which makes timing the market a difficult task. Traditional DCA helps by spreading out investments over time, thus reducing the risk of buying at the wrong time.
3/14 However, the traditional DCA has its limitations. By investing a fixed amount at regular intervals, you might miss out on buying more when the prices are low, or save some when prices are high.
I've spent some time diving into the @Uniswap v4 whitepaper so you don't have to. 🦄
Here's a breakdown of the major improvements and why they're special.
1/25: 🧵 🦄
2/25:
But first, let's give some context on Uniswap v2 and v3.
Uniswap v2 facilitated ERC-20<>ETH and ERC-20<>ERC-20 transactions using a constant product market maker (CPMM) model. However, it had its limitations such as gas inefficiencies and lack of price range specificity.
3/25: Uniswap v3 introduced concentrated liquidity, which allowed liquidity providers to set a specific price range for their capital allocation. This improved capital efficiency but added complexity and increased gas costs for users.
A sophisticated trader has been showing impressive activity on @HyperliquidX
After a meticulous on-chain investigation, I've made some compelling discoveries.
1/ 🧵 🫧
2/ Hyperliquid, for those uninitiated, is an advanced decentralized exchange that’s revolutionizing the blockchain space with CEX-like trading experiences and groundbreaking trading tools.
3/ 🔍 Over the past week, a proficient trader has been making substantial movements on the platform, racking up around 66M in volume on just one account.
By tracking their deposits, I've embarked on an odyssey to unearth the origin of these transactions.
Introducing the New Frontier in Decentralized Perpetuals:
A Comprehensive Look at @HyperliquidX
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1/ Hyperliquid is a fully on chain orderbook perps DEX.
This means all trades are registered on chain and the matching engine is transparent and always verifiable. No need for trust on things you cant verify.
2/ A closer look reveals that banks operate with surprising similarities to Ponzi schemes, depending on new deposits to pay off withdrawals and investing in less liquid assets.