An Analysis of the On-Chain Perpetual Landscape📊 The decentralized perp-exchange sector is primed for 10-20x growth in the coming years. A comprehensive 🧵 comparing $DYDX, $GMX, $KWENTA, $GNS & more👇

This thread is a recap of the Substack report just released. If you want to become more educated on this topic you can check it out here: 👉 tinyurl.com/ThorHSubstack

- Overview of the decentralized perpetual landscape📊 - In Q1 2023 the total trading volume across on-chain perpetual exchanges was $164.2 billion. And while this is a massive increase from previous quarters, in Q1 Binance alone did $4.5 trillion in derivatives volume.

Since the FTX collapse, more and more traders have moved on-chain and several new protocols have emerged. As the space matures over the years, I undoubtedly believe that the cumulative on-chain perpetual trading volume will increase to trillions per quarter.

Below is a table portraying the total trading volume and fees generated by the leading on-chain perpetual exchanges. Two things that stand out: • dYdX still pulls an insane amount of volume. • GMX generates nearly as much in fees despite significantly lower volume.

1️⃣ - @dYdX - 📊 Total trading volume: $913b 📈 14d trading volume: $12.15b 📈 14d fees: $3.24m dYdX currently operates on a custom zk-rollup designed by Starkware but will be moving to an app-chain in the Cosmos ecosystem later this year (dYdX V4).

With V4, dYdX validators will operate an on-chain decentralized orderbook and matching-engine. Current testing already returns 500+ TPS. After the launch, no revenue from fees will be distributed to centralized entities. $DYDX fee accrual incoming?👀

2️⃣ - @GMX_IO - 📊 Total trading volume: $100.5b 📈 14d trading volume: $4.93b 💰 Total fees: $148.2m 📈 14d fees: $7.43m GMX sparked the on-chain perps narrative last year. Despite many new entrants the past months, GMX continues to grow in daily volume, users and fees.

GMX V2 will introduce the ability to trade synthetic assets (not just crypto). • Chainlink low-latency oracles for better real-time market data • Separate liquidity for each trading pair to isolate risk • GLP will be phased out post V2 Likely released Q2/Q3.

3️⃣ - @GainsNetwork_io - 📊 Total trading volume: $35b 📈 14d trading volume: $1.8b 💰 Total fees: $25.4m 📈 14d fees: $1.6m gTrade saw a massive increase in daily trading volume after going cross chain by deploying on Arbitrum in January.

3 months later, ~80% of all volume now happens on Arbitrum. There has also been a significant inflow of liquidity since introducing the gDAI vault which tokenizes users' share of liquidity in the vault and lets them deposit it into AMM's, borrowing/lending protocols etc.

4️⃣ - @Kwenta_io - 📊 Total trading volume: $6.4b 📈 14d trading volume: $0.5b 💰 Total fees: $12.6m 📈 14d fees: $0.8m Kwenta launched V2 in February with a ton of new tradable assets and has since then seen a large increase in trading volume.

Kwenta utilizes @synthetix_io as the liquidity layer for perpetual derivatives trading. As Synthetix V3 launches with more assets as collateral against sUSD, we could see even deeper liquidity on Kwenta📈 $OP trading incentives go live tomorrow💰 Current Kwenta roadmap👇

5️⃣ - @Level__Finance - 📊 Total trading volume: $10.3b 📈 14d trading volume: $3.2b 💰 Total fees: $12m 📈 14d fees: $3.9m Level is the largest perpetual exchange on the BNB-chain with 4 trading pairs: ETH, BTC, BNB & CAKE.

Tranches are used to provide liquidity to traders with a unique risk exposure to the tradable assets. Higher risk tranches receive a larger portion of the trading fees. Level further intends to expand to new chains in 2023 as well as upgrade the current liquidity structure.

- Comparative Analysis📊 - The table below displays recent volume, fees and native token valuation. The lower the FDV/volume and FDV/fees is, the better the current valuation is. Note that there is a big difference between calculating these based on market cap and FDV.

Based on these numbers, GNS and GMX are trading at the best valuations (also because their FDV is closer to their market cap). Based off market cap, DYDX is the best valued token. It's important however to be aware of future token unlocks.

It's also important to note that both Kwenta and Level are incentivizing traders with native token emissions. Will they continue this growth as emissions decrease? I am personally paying extra close attention to $DYDX & $GMX because of their upcoming catalysts later this year.

All in all I am a firm believer that the there will be a large inflow of liquidity in the in the future. If volume 10-20x in the coming years, many of these tokens could increase significantly in price from here because of additional revenue. (Not financial advice!)

Enjoyed the research? If so make sure to like/retweet the first post. And follow me (@ThorHartvigsen) for more⚡️ twitter.com/ThorHartvigsen/sta...

Linking the Substack article again if you want to read the full report: Feel free to subscribe for future analyses. tinyurl.com/ThorHSubstack