DeFi revival, why are you optimistic about SynFutures, the leader in Base derivatives?

Author: Sha

I. When DeFi Becomes a Hotspot Again

Bitcoin finally reached a long-awaited new high in November, not far from the $100,000 mark, and the long-dormant Altcoin market has also seen an explosion, with leading DeFi projects like UniSwap, AAVE, Compound, and MakerDAO all seeing good gains recently. Looking back at the DeFi explosion in 2020 until now, even though there have been constant voices of pessimism, the DeFi world is still steadily developing and expanding, and gradually eroding the market share of centralized exchanges. This is still a track full of innovation and huge potential, and there are still many possibilities waiting for us to explore. Today, I want to talk about one of the projects I think is most worth watching in the recent DeFi ecosystem - the leading Base derivatives project SynFutures. Discussing how it is leading a new round of DeFi innovation by leveraging its own advantages, how it is stirring up the entire decentralized derivatives track, and the reasons behind its rapid growth and future growth potential.

II. SynFutures' Performance After Launching on Base: Occupying 50% of the Market Share, Ranking 3rd in Protocol Fee Revenue

Let's first look at SynFutures' data performance in the Base derivatives track:

• Launched on Base on July 1, with trading volume exceeding $100 million in the first 10 days

• The latest trading volume on November 12 exceeded $910 million

• Cumulative trading volume approaching $30 billion, with a daily average trading volume of $210 million

• Q3 trading volume accounted for nearly 50% of the Base network

• The trading volume in the past 24 hours accounted for 72% of the Base network, nearly 5 times that of the 2nd place

And if we look at the industry as a whole, we can see the growth of SynFutures V3 since its launch, which is no less impressive than projects like Hyperliquid, dYdX, and Jupiter. According to defillama data, the on-chain perpetual contract trading volume in Q2 and Q3 was $1.1857 trillion, with the top 3 projects accounting for over 45% of the trading volume, namely Hyperliquid (16.94%), dYdX V3 & V4 (14.37%), and SynFutures (14.11%).

These impressive achievements naturally make one curious - why is it SynFutures, and what unique advantages does it have compared to other derivatives platforms?

III. SynFutures, the Game-Changer in the Derivatives Track: Concentrated Liquidity + Pure On-Chain Order Book Model

Looking back on the derivatives track in the past few years, the mainstream derivatives models can be divided into the following 3 categories:

• The Vault model represented by GMX - LPs act as the counterparty to Traders, and use oracles for pricing. The representative products in this track are GMX and Jupiter. GMX supports more assets, while Jupiter benefits from the heat of SOL and has maintained high yields and high TVL, becoming one of the industry's hot projects. But the oracle risk in this type of model is still not negligible, and since they use oracles for pricing, they cannot serve as a price discovery venue and find it difficult to take on the challenge of centralized exchanges.

• The derivatives application chain represented by dYdX and Hyperliquid - Relying on high performance and an experience comparable to centralized exchanges, they have gained the favor of market makers and occupy a place in the market. But the over-centralization of their off-chain order books and the fragmentation of liquidity are still a considerable challenge for traders and project parties.

• Another relatively low-key but already well-performing model is the on-chain AMM model represented by SynFutures. This model references the concentrated liquidity model of UniSwap V3, and further introduces an on-chain order book to improve the overall system's capital efficiency. From the rankings and market share of Q2 and Q3 derivatives trading volume mentioned earlier, we can see that the representative of this model, SynFutures, has seen trading volume more than double that of the Vault model represented by Jupiter in the past half year. This momentum has not even stopped, and it is only a matter of time before its total trading volume surpasses the veteran decentralized derivatives exchange dYdX.

So why has the on-chain AMM model represented by SynFutures been able to achieve such a huge breakthrough in such a short time? What advantages does this model have compared to the other two mainstream models?

3.1 Concentrated Liquidity - Improving Capital Efficiency

SynFutures' oAMM allows LPs to add liquidity to specified price ranges, greatly improving the liquidity depth and capital utilization efficiency of the AMM, supporting larger and more trades while creating more fee income for LPs. From its documentation, its capital efficiency can reach up to 26,666.6 times the original.

3.2 Pure On-Chain Order Book - Maintaining High Efficiency While Remaining Publicly Transparent

The liquidity in oAMM is distributed across specified price ranges, and each price range is composed of multiple price points. For example, LPs provide liquidity in the [80000, 90000] range for the BTC-USDC-PERP, and this price range can be divided into multiple price points, each with an equal amount of liquidity. You may have immediately realized that this is an order book, right? Yes!

oAMM allows users to provide liquidity at specified price points, to realize on-chain limit orders and simulate order book trading behavior, further improving capital efficiency. Compared to the traditional AMM market making method, market makers on centralized exchanges are more familiar with and have a higher cognitive level of limit order market making, and are also more willing to participate. So oAMM, which supports limit orders, can better attract market makers to actively market make, further improving oAMM's trading efficiency and depth, achieving trading experience comparable to centralized exchanges.

And unlike the off-chain order books of projects like dYdX, oAMM is deployed as a smart contract on the blockchain, with all data stored on-chain and verifiable by anyone, completely decentralized, so users don't have to worry about the trading platform engaging in dark pool operations or fake trades.

If we compare the different projects, we can see that SynFutures has done a good job of addressing the shortcomings of the Vault model represented by GMX and the application chain model represented by dYdX, while retaining high efficiency and high performance. At the same time, it can naturally integrate with various assets of the underlying public chain and integrate into the entire DeFi ecosystem, giving it inherent advantages. And as the underlying public chain technology is upgraded in the future, this advantage will become even more apparent.

IV. The Flywheel Effect Brought by the Perp Launchpad

In addition to the characteristics of the model itself, SynFutures has also launched the industry's first perpetual contract issuance platform, the Perp Launchpad, referencing the Pump.fun model. Over the past year, the most profitable track should be asset issuance, from Runes to Mints, from Pump.Fun to DAO.FUN, all of which have been continuously creating a wealth effect, attracting more users to enter the market, which inevitably makes some friends who believe in the value of blockchain feel nihilistic. But this is the real situation of the current stage of the industry, whoever can do asset issuance, attract market attention, and create a wealth effect, can ride the trend and become a rising star. Whether it's the success of Solana in this stage or the over $100 million in revenue of Pump.Fun, they are the best proof of this model. And SynFutures' recently launched Perp Launchpad, based on its own model innovation and new asset issuance methods, is designed to open up more new gameplay for more on-chain Degen players.

Here is the English translation of the text, with the specified terms translated as indicated: Imagine a MEME token that just reached $100 million, which can provide liquidity using its own project token and open a corresponding contract market. Wouldn't this coin be more fun? If the truth of terminals could open a contract market on its own with the $GOAT it holds in the early stage, for more aggressive traders, they can choose to use leverage to obtain higher returns, whether it's for buying the dips or escaping the top. When there is a contract market, trading often becomes more complex, but there will also be more trading opportunities. At the same time, in a highly volatile market, with the price difference between the spot and contract prices, arbitrageurs will also come into play, further expanding the token's popularity and the number of holders. In the above example, if the truth of terminals really opened a Perp Market with $GOAT, there would be a new narrative "AI has launched its own contract market" to sustain the market hype, and the market value of $GOAT might even continue to rise. After all, what the market needs most is dopamine, fun, and excitement, and contract trading is the most interesting means. Of course, someone may ask, who will provide the liquidity? The answer is the project party and the supporters of the token, who can earn more tokens by providing liquidity. The more tokens the holders hold, the healthier the project can develop. More importantly, why do we have to wait for the centralized exchange to dominate whether to list the corresponding contracts, and then eat up most of the profits generated by the contract trading? Why can't the project party and the community hold their own contract market? This is what Perp Launchpad is trying to do, to bring the dominance of the contract market back to the community. In the past few years, we can see that the dominance of token listings on the spot market has returned to the community, starting with on-chain liquidity pools, and it is even more obvious in MEME trading; in the next few years, the dominance of contract listings will also return to the community. This sounds crazy, but it's already happening, and it will only accelerate. From the recent announcement of SynFutures, its Perp Launchpad has exceeded $100 million in trading volume in the first week of launch, and is still growing rapidly. In the future, we will see more and more projects choose to dominate their own derivatives market after listing on the spot market, control the liquidity of the derivatives market, and then use the profits to help the project development or give back to the holders, entering a more benign and healthy development state. "Trading as Margin" becomes one of the utilities of the token, and "dividend" becomes the standard configuration of the token, all of which are happening vigorously under the push of SynFutures. And when this wildfire starts, for the current SynFutures, it is like providing a huge pump, which is very beneficial to the rapid growth of its TVL and trading volume, and it will also move closer to the leading position in the derivatives track. Bringing the dominance of the perpetual contract market back to the chain and back to the community, this is at least a $1 billion market. Taking the Base network as an example, Aerodrome's current TVL is $1.4 billion, even if only 1/10 of the funds choose to have their own derivatives market, that would be close to $150 million in TVL. And this is just the TVL of a single protocol on the Base network. Looking at the entire market, the only one who can do this is SynFutures, and its oAMM specially designed for contract trading will be the biggest beneficiary of this trend. In terms of revenue, SynFutures also has the opportunity to stand shoulder to shoulder with top protocols like AAVE and MakerDAO in the future. Without considering the Launchpad, its fee revenue in the past 30 days has exceeded $2 million, ranking 3rd among the protocols (the 3rd is the Sequencer of the Base network). These potential revenues can help SynFutures quickly expand its market share in the Perp Launchpad, and become the leader in this track. Currently, in the first round of Grants, SynFutures has set up a $1 million funding program to provide listing support, event support and other assistance to emerging projects, while helping projects increase their exposure and activity in the on-chain market. With more projects joining, it will also help SynFutures gain more support from the project communities, which means more users and more revenue, which can further help SynFutures expand its influence in the market and establish a growth flywheel. And this is without considering the potential incentives of its token economics model for the ecosystem, and let's not forget that SynFutures is a project that has cumulatively raised $38 million from well-known industry institutions such as Pantera, Polychain, Dragonfly, Standard Crypto, and Framework, the potential incentives of its future tokens and the push for the growth flywheel will reach an amazing level. If you can see this, you may be able to feel the author's fondness for SynFutures and optimism about its future development. Because in my view, the derivatives track in the DeFi field has not had a new story and new direction for a long time. We all know the oracle risk of the Vault model, and we also know the centralization problem of application chains, but where are the solutions? This track has been dormant for a long time, and it needs new forces to stir it up in order to further compete with the centralized market. In the author's view, SynFutures is undoubtedly the most innovative and market-demand-aligned derivatives project in this stage. From its AMM model specially designed for derivatives to the recently launched Perp Launchpad, it is leading a new round of innovation in the decentralized derivatives track, pushing the track towards better development. In the new round of DeFi market, SynFutures is playing the role of a disruptor in the derivatives track, driving the entire track towards a new round of innovation and healthier development!