Decentralized perpetual exchanges (Perp DEXs) have been a hot topic this year due to their ability to profit even during a bear market. Additionally, the implosion of FTX shifts the eyes of investors to one sector. Trust in centralized exchanges has been lost. On an industry-wide scale, we have seen a withdrawal of coins from exchanges at a historical rate as holders seek self-custody safety.
In the past seven days, exchanges have seen one of the largest net declines in aggregate BTC balance, falling by 72.9K BTC. A similar observation can be made for Ether, with 1.1M ETH withdrawn from exchanges over the last week.
Why Should You Care?
The perpetual futures market is massive. CEXs have averaged $100B-$200B in daily traded volume in the past year. DEXs, on the other hand, average $200M-$400M in daily trading volume.
While Perp DEXs lag behind CEXs by a considerable amount, the collapse of FTX, along with regulatory pressures, is turning the tide in favor of DEXs.
The real-yield narrative is taking the DEX scene by storm after having so many projects fail in the past through unsustainable emission-funded yield.
Here are the top seven Perp DEXs you should be investing in.
GMX is a spot and perpetual DEX with low swap fees and 0 price impact trades. Trading liquidity is provided by GLP, a crypto ETF-like asset native to GMX. The platform uses Chainlink oracles and large exchanges for asset prices.
GMX is ideal as the generation of real yield comes from trading fees, and swaps are distributed back to GLP and GMX stakers. The platform is nice and has an easy-to-use interface. It also has a strong community built on Arbitrum. In addition, a holder can self-custody their funds.
It has two tokens, GMX and GLP. $GMX is the governance and utility token, while GLP is the platform’s liquidity provider. Additionally, due to GMXs innovative multiplier points system, stakers are incentivized but not required to keep their tokens staked. As a result, it ultimately reduces sell pressure.
As a derivative exchange, dYdX offers an alternative to centralized finance and traditional crypto exchanges. dYdX is a leading decentralized exchange that currently supports perpetual trading. dYdX runs on smart contracts on the Ethereum blockchain and allows users to trade with no intermediaries.
It has the best user interface. 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.
Earlier this week, dYdX had its largest daily volume since the crash in May earlier this year. Additionally, the dYdX token is up nearly 50% in the past week, with daily trading volume hitting six-month highs just three days ago.
Gains Network is a decentralized derivative trading platform that gives users a way through Crypto and stock derivatives. Gains Network offers high leverage. Traders’ profits are their own. However, as with any leveraged trading, losses are also amplified.
Instead of trading with perpetuals, Gains Network takes the medium value from different exchanges. Consequently, it provides a more accurate spot price of the asset. This additional accuracy liberates users from a constrained, brokered trading experience.
It is a decentralized spot and perpetual exchange built on Polygon, aiming at becoming the all-in-one platform for traders. The DEX constitutes high liquidity pools. It also can enter a leveraged position, offering up to 30x leverage. Additionally, the platform allows users to earn rewards from trading fees. Currently supports major tokens and stables.
The platform allows you to trade directly from your wallet without registration. It has a near-zero transaction fee. The platform has three main tokens in its ecosystem; $MVX, $MVLP, and $esMVX.
Perpetual Protocol is a decentralized perpetual futures exchange platform operating on the cutting edge of decentralized finance. The Perpetual protocol platform is true to the spirit of DeFi, emphasizing community and decentralization. The protocol is fully on-chain deployed on Optimism. Ten months after its launch, it had more than $30 billion in total trading volume.
Their mission is to provide a democratic finance platform by giving users access to its most popular financial instrument.
The current Pool Party provides an incentivized program to the liquidity providers. The LP can earn $OP and $PERP weekly, proportional to the liquidity they provide in each market. Each market has a different allocation.
6. TakePile ($TAKE)
$TAKE token shares fees to stakers. Additionally, users want more sustainable yield, which is what TAKE provides. There are no funding rates on TakePile due to the pile system.
TAKE offers up to 200x leverage as they do not have to hold the underlying asset as the competitors do. For liquidity providers of vaults, they can earn $TAKE. Pile versions of tokens can open or close different trading positions. A winning long trade would win users more of the pile tokens for the asset they went long on.
7. MCDEX ($MCB)
MCDEX is the first fully-permissionless DEX for trading perpetual contracts, powered by MCDEX’s revolutionary AMM technology.
Anyone can create their own perpetual market. Additionally, there is no impermanent loss in V3. The AMM capital efficiency of V3 is 1000 times higher than that of traditional AMMs
It’s too early to say which perpetual DEX will capture the biggest trading volume in the long run. Understanding their tokenomics and features can help you make a more comprehensive decision.
While investing, take note of this; DeFi is young and holds a lot of risks, just like any investment strategy. Additionally, diversity is important to mitigate risk. You should only invest what you can afford to lose.