Derivative DEX Battle: Kwenta and Level Surpass GMX in Weekly Trading Volume

Kwenta and Level's weekly trading volume surpassed GMX in Derivative DEX Battle.

LD Capital Research analyst compared the trading volumes of 6 major derivative DEX protocols and found that in the past month, 5 out of 6 major derivative DEX protocols showed a trend of decreasing trading volume, while only Kwenta showed a trend of contrary growth. In addition, in the capital pool model derivative DEX, GMX was impacted by Kwenta and Level.

The counter-trend growth of Kwenta’s trading volume is likely to benefit from two main factors: first, the strong incentives for Kwenta trading, in addition to the token incentives of the protocol itself, starting from April 26, 130,000 OP tokens are rewarded every week, and from May 10 to August 30, 330,000 OP tokens are rewarded every week, with a market value of approximately $500,000. Second, Kwenta’s transaction fees are relatively low compared to GMX, with current trading fees ranging from 0.02% to 0.06%. Compared with Level’s incentive measures, which use protocol tokens and larger token incentives from DYDX, the OP token incentives in Kwenta’s incentive measures occupy the main part, and the protocol token incentives are gradually decreasing, resulting in less selling pressure for protocol tokens. Additionally, its trading incentives are obtained on a weekly basis and are periodic.

After analyzing the user numbers, trading volume, concentration, and holding size of several fund pool derivative DEX models, GMX still has 2 to 3 times more users than other projects and far greater holdings. The average trading volume of Kwenta and Level users is significantly higher than that of other projects without incentives. Overall, Kwenta has more real users and larger trading volume, and its incentive measures may retain users by providing better liquidity depth and lower fees after attracting some users. Level has a higher proportion of users with fake trading volume and higher inflationary pressure.

Recent development plans: 1) GMX: The recent work center of GMX is still to launch its V2 version. In addition, GMX has received approximately 10,000 ARB tokens from Arbitrum as an incentive, and there is currently no proposal on how to use these tokens; 2) Kwenta: The development of Kwenta is closely related to Synthetix. The two belong to the same ecosystem. Recently, the founder of Synthetix, Kain Warwick, proposed some ideas for the future development of Synthetix, considering the relationship between users, funds, and products. If implemented, it would have a significant incentive effect on projects built on Synthetix. 3) Level: In May, Level added a new cross-chain through community voting and will migrate to Arbitrum. Currently, the liquidity pool for LVL tokens has been deployed on Arbitrum and can be traded.


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