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The State of Decentralized Derivatives Trading: Research #12

A new bi-weekly research from Spin devoted to the state of the decentralized derivatives market is out, meaning that we have been publishing this kind of article for 6 months already. A notable milestone, isn’t it?

This time, we will have a closer look at the changed market sentiment, overview the steps made to boost the DeFi adoption and cover the core updates from decentralized derivatives protocols. Let’s start!

Market sentiment: Bulls are back to business

During the last two weeks the market sentiment has changed. Bitcoin price started to grow and all markets are following the digital gold trend. According to Glassnode, the BTC spot volume is increasing while derivatives are having the trading volumes going down. This probably means that the current growth in price is organic, not speculative.

The best performance for the last week was shown by Serum, +70% for the last 30 days, followed up by Raydium price, too.

Some stunning news for DeFi enthusiasts: PancakeSwap was integrated as a mini-app into the Binance marketplace. Now, users of the largest centralized exchange are able to swap tokens on PancakeSwap right from the Binance mobile application. This move will definitely bring more users to the DeFi ecosystem.

Astroport continues to outperform the market due to overall Terra ecosystem growth. Definitely a good way to make money in crypto — betting on the best protocols to expand the list of supported blockchains.

What’s new to DeFi?

One of the biggest news in crypto in recent days is the Terraform labs’ massive purchase of Bitcoin. Do Kwon (CEO of Terraform) reveals their plan for buying BTC for $10 B. The assets will go to Luna Foundation Guard reserves, and it will help to sustain the entire Terra ecosystem. Now their wallet contains 27,700 of BTC worth $1,32 B.

The main problem for Terra is the huge amount of UST stored in Anchor. The lending protocol offers a unique product with a stable 20% APY for deposits. Because the average yield for stablecoins in crypto is much less, more interest was attracted to Anchor, and 65% of all minted UST were deposited there.

Such a high yield comes not from the market, but mostly from the Anchor reserves, filled by Terraform. Thus, several days ago an Anchor proposal was accepted, according to which the protocol yield rate will reduce until the yield reserve starts to increase. Decreasing Anchor deposits APY will probably lead to outflow of UST from protocol, and reduce stablecoin supply. In turn this will lead to exchanging UST to LUNA and selling it to the market.Eventually, LUNA price might drop. Hopefully this process will go slowly, the Anchor rate will drop by 1,5% per month, so we won’t see bunk run.

The second big news is the launch of ApeCoin, presented by Bored Ape Yacht Club (BAYC) team. It stands for “culture, gaming, and commerce used to empower a decentralized community building at the forefront of web3”, as stated in the announcement. According to the developers, ApeCoin is owned by ApeCoinDAO, which will determine the future token utility. There are some rumors that the token is just a possibility for making more money on popular NFTs for Yuga Labs (company, that stays behind BAYC), which at the same time raises $450 M. in seed round funding with a $4 B valuation. Several DEX exchanges, such as 01.xyz and Drift have already launched perpetuals for APE token, and Mango plans to do the same as well.

Speaking of perpetual DEXes, let’s have a quick look at the performance of the most popular on-chain protocols’ tokens:

The metrics for the options protocols’ tokens are quite similar to what is happening to perps producers:

And last, but not least important news from DeFi is the launch of Stargate Finance, a multichain protocol gathering together DEXes on different chains. Here’s an article for your extended understanding. Stargate TVL has reached $3,5 B, and FDV of token is $2,9 B.

The progress of derivatives protocols

  • Mango started to diversify their treasury by buying mSOL for $1M. It’s a good strategy for any DAO, to have different assets, their own native token, stablecoins and other crypto assets too.
  • The founder of dYdX has published an interesting article about creating the platform. Beware, sometime Spin will do the same (**wink, wink**).
  • PsyFinance made a partnership with Socean, and now users are able to increase the effectiveness of capital as follows: stake SOL to scnSOL and put it in scnSOL Covered Call Vault. scnSOL will generate yield as staked Solana, and covered calls will generate yield from premium — a real DeFi lego! Now the APY is 31%. They are also moving to the DAO model.
  • MCDEX has presented a quite controversial feature — metric-based vesting schedule for investors. If the trading volume is lower than X investors won’t get any MCB tokens. But it’s easy to “wash” enough volumes with simple wash trading.
  • Drift finally increased the maximum leverage for trading up to 10x, so it becomes easier to (go rekt) earn more now! By the way, if you still don’t understand how derivative AMM works I strongly advise you to read this article — a nice one!
  • GMX has reached $320 M TVL according to DefiLlama. What an impressive and stable growth, congrats to the team! If you don’t know how GMX works take a look at this thread.
  • The Friktion cumulative volume has surpassed $1 B, and the TVL now is on ATH. But there’s one thing worth mentioning: most of their vaults are covered calls. What do you think investors will do if the bull market starts? In this case, people will start losing part of their underlying assets and discover that DOVs are not actually the same as LP farming or staking, it involves more risks related to the underlying asset price.
  • A new NEAR-based protocol Tonic was announced. The team develops an on-chain orderbook DEX. There is not a lot of information yet, however we will keep our eyes on them. Interestingly, that interface looks pretty similar to the Atrix, based on Solana…

As many protocols live, come alive or continue to develop, and with the appearance of fast and cheap blockchains and Layer-2 solutions, we will see more cool projects emerging in the derivatives area, which will try to pull a stroke, and it’s not only the battle for current DeFi users, but also a battle for institutional crypto players and giants from traditional finance, which would probably come to DeFi. Considering the pie is so big, it is worth it to BUIDL!




Spin is a DeFi derivatives infrastructure built on NEAR Protocol, a reliable and scalable L1 solution. The on-chain order book solution offered by Spin provides a CEX-competitive experience to DeFi users.

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Spin is the first decentralized trading platform allowing for both futures and options trading built on Solana.

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