Market Overview
The derivative DEX sector is experiencing fierce competition amid declining overall market trading volumes. Despite this, new protocols continue to emerge. In a bearish market, traders gravitate toward platforms offering robust incentives and higher yields, intensifying the battle for users.
Since late March, trading volumes across derivative DEXs have trended downward. Among six major protocols, five saw declines—except Kwenta, which demonstrated remarkable growth.
Kwenta, a perpetual trading frontend built on Synthetix, drives over 95% of Synthetix’s trading volume and revenue growth. Synthetix, a liquidity provisioning protocol with $400M+ in TVL, supports Kwenta by supplying deep liquidity pools.
Key Derivative DEXs by Weekly Volume
- dYdX (order book model) dominates ~50% of the market.
- Pool-based protocols like GMX face rising competition from Kwenta and Level, which recently surpassed GMX in weekly volume.
Why Kwenta and Level Are Gaining Traction
1. Aggressive Incentives
- Kwenta rewards traders with OP tokens (13K–330K OP weekly, worth ~$50K).
- Level distributes lyLVL tokens based on fee payments, plus ladder rewards for top traders.
2. Lower Fees
| Protocol | Fee Structure |
|-----------|---------------------------|
| Kwenta | 0.02%–0.06% (taker/maker) |
| GMX | 0.1% + borrowing fees |
Kwenta’s cost efficiency attracts real users, while Level’s high-volume incentives risk inflating token supply.
Trading Volume Analysis
User Metrics (30-Day)
| Protocol | Users | Avg. Trade/User | Top 5% Concentration |
|----------|--------|------------------|-----------------------|
| GMX | ~12K | $400K | Moderate |
| Kwenta | ~2.9K | $1.6M | 33.35% |
| Level | ~600 | $5.76M | 75% |
GMX remains the leader in user base and open interest. Kwenta balances growth with organic adoption, while Level shows signs of wash trading.
Roadmap Updates
GMX V2 (Testnet Live)
- Isolated GLP pools for risk management.
- Dual asset support (native + synthetic).
Kwenta & Synthetix
- Proposed SNX staking rewards (5M–10M SNX).
- Subsidies for frontends like Kwenta.
Level’s Arbitrum Migration
- LVL pools already live; full trading expected mid-June.
FAQ
Q: Why did Kwenta’s volume surge?
A: OP token incentives and low fees attracted users.
Q: Is Level’s growth sustainable?
A: High inflation from token rewards raises concerns.
Q: What’s next for GMX?
A: V2 aims to boost liquidity flexibility.
Data sources: Token Terminal, Dune Analytics. Protocols’ official announcements.