Meow DeFi #3 - Perps Everywhere

Hello people. Another week, another meow. Markets are sad as is, so no rants this time. Instead, let’s talk about the good stuff.

Good Entry

Poetically named, Good Entry is yet another addition to the suite of DeFi perp DEXes. Its beta is currently live on Arbitrum for anyone to check out. What sets GE apart from the competition, however, is the idea of a non-liquidatable “protected” perp.

When opening a position on GE, traders not only have to choose a direction and size but also an “activation price” higher or lower than the current spot price. All losses are capped below the activation price in case of longs and above it in case of shorts. Traders still have to worry about hourly charged funding rates which can get their position liquidated, but otherwise, having a good entry is all that matters.

Under the hood, the platform utilises UniV3 positions for liquidity managed through ezVaults. Right now, there are less than $20k in TVL, so very early stages, but new perp platforms are always worth having an eye on.

Derivio

Continuing the subject of perps, Derivio is a perp dex on a zkSync testnet. Actually, that’s a lie, and they are not just a perp DEX; here is how they describe themselves - «Derivio ‎is a structured derivatives ecosystem offering synthetic derivatives»‎. During phase one, the platform focuses on perps and options, with more advanced and exotic structured derivatives coming in phase two.

One of the things that set Derivio apart from most similar protocols is the Universal Margin System that quite literally allows users to long/short anything (as long as there is liquidity in the pool). In practice, this transfers to the ability to short BTC against ETH or long DAI against USDT.

Also, @RobotFinancexyz are already building vaults on top of Derivio; not many details on them yet, though.

Pear Protocol

Food names are back in fashion. Pear protocol is a pairs-trading platform on perp-chain Arbitrum that has just finished its private sale. Their plan is to let users short one asset while longing another in one simple transaction.

Instead of trying to bootstrap their own liquidity, they will use platforms like GMX and GNS under the hood for trading and simply wrap positions into ERC-721 tokens.

Pear belongs to a class of protocols that take a simple idea (spread trading) and try to execute on it without trying to overcomplicate stuff, which I can respect. The biggest concern is probably the expansiveness of platforms like GMX eating into profits. It can get quite costly to maintain multiple positions at once.

Airdrops

If you’ve been on Crypto Twitter recently, you’ve probably seen an insane amount of threads about airdrops after $ARB was released. I still think it’s the laziest form of content, but it’s funny how this is the meta now and will probably die out relatively soon until the next big airdrop.

What’s even funnier is that there are now projects like @SybilSamurai, which plan to offer Sybil-as-a-Service for their holders. No idea how they plan to make it work and if it’s even real, but there is something poetic about airdrop hunting at scale.

Airdrop speculation is a very good growth strategy for protocols (e.g., LayerZero transactions went parabolic when the raise was announced), so I doubt it’s going anywhere soon.

Perps everywhere

It seems to me like the “DeFi perps" narrative will stay for a while. GMX was dominating the mindshare and volume for a long time, and while it is still the undisputed leader, the crown is up for grabs.

The progress is clearly visible on volume charts, with protocols like Kwenta, Vela and Level popping up just this year. Link to a full dashboard.

How much of that growth is organic and sustainable remains to be seen. Volume can be easily manipulated through wash trading, and protocols aren’t afraid to use it to their advantage.

Even if so, speculation/gambling on perps is slowly but surely one of the core DeFi usecases, with new protocols and new ideas popping up every week. More CEXes pushing for KYC (e.g., Bybit) might help accelerate the growth/evolution.

In the next issue, I promise to mention perps exactly zero times, no matter how hard it is to avoid the topic in the current climate.

Disclawmer

This is a work of fiction. Names, characters, protocols, events and incidents are the products of the author's imagination. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. Not financial advice.