Thread by @TheDeFinvestor

/1 The battle⚔️ of Perpetual DEXes has begun.

Decentralized perpetual exchanges are a trending topic right now. 🔥

So I decided to compare the most popular ones:
@dYdX
@GMX_IO
@GainsNetwork_io

Join me for a 🧵 to find out more about their Pros and Cons 👇

@dYdX @GMX_IO @GainsNetwork_io /2 If you never heard about some of these #DEXes, I got you covered!

I wrote separately a 🧵 about each one of them:

DYDX:

https://twitter.com/TheDeFinvestor/status/1545090298308481024

GMX:

https://twitter.com/TheDeFinvestor/status/1534950962993184770

gTrade:

https://twitter.com/TheDeFinvestor/status/1547272158937698304

@dYdX @GMX_IO @GainsNetwork_io /3 Let's begin with a small recap. 🧾

gTrade and dYdX offer synthetic exposure to multiple assets, while GMX allows traders to open trades using only the assets from GLP pool.

The synthetic exposure allows the first 2 DEXes to list every asset that has an oracle price feed.

@dYdX @GMX_IO @GainsNetwork_io /4 So from this point of view the first 2 platforms are superior.

However, I have some good news about GMX:
The GMX project team is currently developing PVP AMM which will offer synthetic exposure!

@dYdX @GMX_IO @GainsNetwork_io /5 Resiliency in case of extreme volatility

Perpetual DEXes are at risk of becoming insolvent if they don't manage their risk well.

So dYdX and gTrade implemented funding fees(longs pay shorts a fee when there are more longs opened than shorts and vice versa)

@dYdX @GMX_IO @GainsNetwork_io /6 Funding fees ensure that the longs/shorts ratio is near 50% so traders winnings will not be too big.

On the other side, GMX doesn't have funding fees, which is a big advantage for traders. However, the maximum limit of shorts opened is 50% due to its GLP model.

@dYdX @GMX_IO @GainsNetwork_io /7 dYdX has an insurance fund(that contains $15M). If traders PNL is positive the fund will take on the loss.

The traders' PNL on GMX will reflect the price of GLP.
traders loose->GLP price up(the traders' collaterals goes to GLP pool)
traders win->GLP price down

@dYdX @GMX_IO @GainsNetwork_io /8 gTrade passes this risk to GNS holders(the platform token).

gTrade buys GNS from the market and burns it when traders PNL is negative. In the opposite scenario, GNS will be minted and sold to cover losses.

So GNS price may depend sometimes on the gTrade traders PNL.

@dYdX @GMX_IO @GainsNetwork_io /9 Perpetual DEXes tokens

I will use the following terms:

FDV-Fully Diluted Market Cap

P/E-price to earnings ratio

P/E is calculated by dividing the FDV by the annualized protocol revenue
a lower P/E - a better one

So which DEX token should you buy? 🤔

@dYdX @GMX_IO @GainsNetwork_io /10 Let's check some stats:

dYdX- 9.4 P/E
GMX- 32.2x P/E
Gains Network- 12x P/E

Only GMX is distributing a part of its revenue from fees(33%) to its token holders at this moment(so that's why its P/E is big)

The other 2 DEXes will start doing this by the end of 2022.

@dYdX @GMX_IO @GainsNetwork_io /11 So if you're only interested in maximizing your earnings in the long term as a token holder, dYdX may be the best perpetual DEX token to buy now.

However, remember that the holders' income depends on the volume of these platforms which may vary over time.

@dYdX @GMX_IO @GainsNetwork_io /12 User Experience

dYdX: It has the best user interface among all 3 DEXes IMO.

More than that, traders earn trading rewards in the dYdX token when using the platform and they can even participate in competitions for big rewards in cash and NFTs.

@dYdX @GMX_IO @GainsNetwork_io /13 GMX: It has a clean user interface. One of the platform's big advantages for traders is that there aren't funding fees. It also allows 0 slippage trades.

An interesting feature of GMX is that you can get a discount when trading by introducing a referral code.

@dYdX @GMX_IO @GainsNetwork_io /14 gTrade: The platform doesn't have a very nice user interface IMO. However, gTrade is the only perpetual DEX that allows traders to also trade forex and stocks outside of crypto.

The team posted recently the project roadmap which is very ambitious: medium.com/gains-network/…

@dYdX @GMX_IO @GainsNetwork_io /15 It's too early to say which perpetual DEX will capture the biggest trading volume in the long run.

But I hope that you understood the pros and cons of each of these platforms.

If you found this thread helpful, please leave a like and retweet the 1st tweet. 🤝

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A little correction: GMX has a fee called borrowing fee, which is similar to funding fees.