The original author: Dacong Fred (X: @Dacongfred)
1. Project Categories: Finance Camp VS Web2 Integration Camp
ETH ETF 通过之后，整个市场意料之中的进行了大幅下跌，和之前 BTC ETF 通过后的走势如出一辙。
Based on the impact of ETFs on the market, the American ETF model can be summarized as follows: Favourable Information before going online, followed by a significant pump; after going online, the favourable information is exhausted, leading to a fall; then, due to the ultimate favourable information after the ETF approval, there is a gradual pump again.
![漫谈DeFi的发展史与未来]()
However, looking back at this cycle, although there have been narratives about AI, DePIN, and Restaking, there has not been a breakout track or project like Uniswap leading the DeFi summer in previous cycles, nor has there been a frenzy of everyone changing their avatars for the NFT craze, or StepN triggering a nationwide movement. This has also left many investors and builders feeling confused about this cycle. What kind of Bull Market will this cycle ultimately usher in for us?
Everyone has made different choices, whether it is to build in the BTC ecosystem, build in the DePIN/AI track, or devote themselves to full-time meme cryptocurrency speculation. Everyone has made bets according to their own beliefs.
In general, the current exploration of the project can be roughly divided into two schools of thought. One is the financial school, which believes that the development of Web3 is definitely closely related to finance. Whether it is DeFi, NFT, or the BTC ecosystem, the essence is still to explore financial gameplay and asset attributes; the other school is the combination of Web2, including social, gaming, infrastructure (DePIN), AI, etc., hoping to combine the track of Web2 with blockchain/crypto to explore new scenarios.
In previous research reports and analysis articles, I have discussed the current development status and challenges of combining AI with Web3, as well as the development status of the BTC ecosystem. Today, let’s talk about the representative track of DeFi in the financial industry.
二、Why DeFi Can Explode - The Exploration of Pioneers
Defi is a long-standing topic. Whether it is Uniswap, the most representative project in the Dex field, or dYdX in the derivatives field, Defi plays a very important role in a public chain and the entire web3 industry.
Before the birth of Dex, people traded cryptocurrencies through centralized exchanges. The advantages of centralized exchanges are similar to web2, fast speed, and simple operation; however, the disadvantages are also obvious, low transparency, poor security, and the collapse of a certain CEX giant event later also shattered the hearts of many people, especially for web3 users, asset ownership, security, and transparency are placed in a very important position.
In 2018, Uniswap V1 realized the decentralized exchange through the Automated Market Maker (AMM) model, allowing users to trade directly with smart contracts instead of the traditional buyer and seller market order book model, thus leading a new track; later V2, V3 added new features such as built-in price oracle, support for centralized liquidity, and multi-tier fees, continuously optimizing the user experience of using Dex, and Uniswap has firmly occupied the leading position in the Dex track since its birth.
On the other hand, dYdX, as a pioneer of Defi derivatives, chose to use the order book model to provide leverage and Futures Trading services, which is closer to the mode of operation of TradFi, with relatively high liquidity and a large number of trading pairs, once occupied a high market share in the derivatives track, and led the Defi Summer together with Uniswap.
Three, Defi Challengers and Future
In the development of Defi later on, two distinctly different paths emerged in the development of Dex and derivatives.
1) Dex Binding Chain Mode: From the perspective of TVL on Dex, the development of Dex is basically inseparable from binding to a certain chain. Whether it’s Uniswap taking off with Ethereum, or Pancake binding with BSC, Raydium binding with Solana, and later Velodrome on Optimism, Aerodrome on Base on-chain, Dex, as a necessity for public chains, is essentially similar in nature. Its take-off essentially depends on binding with the chain, and its TVL performance often correlates closely with the position of the chain.
- derivation innovation mode: On the other hand, the generational change of derivation is long innovation in gameplay. For example, GMX was only launched in 2021, beating the previous leader big brother dYdX.
Next, let’s further analyze why GMX was able to rise suddenly, and what are the innovative points of GMX compared to dYdX. I think there are two core innovative points:
1. Using the LP-provided liquidity pool model:
GMX adopts the LP-provided liquidity pool model, combined with oracle machine quotations, allowing users to maintain low slippage while trading quickly;
- Favourable Information for users
**2. Profit sharing mechanism innovation: **70% of the revenue is distributed to liquidity providers (holders of GLP) and 30% to holders of GMX operating Tokens. ——Favourable Information Liquidity Provider
These two innovations accurately capture the two ends of the transaction: users and Liquidity Provider, so that they can catch up and become the new derivation leader. **
After GMX, there have been some interesting derivative projects that are eager to try. For example, SynFutures on the Blast chain has recently seen a surge in on-chain trading volume. After digging deeper, there are also several points worth following.
1. The wealth effect of Blast chain: From Blur to Blast, Blast chain has carried the wealth effect since its inception. It is a very smart choice for SynFutures to deploy on the Blast chain. — Attracting users
2. oAMM Concentrated Liquidity: Similar to Uniswap’s concentrated liquidity strategy, SynFutures’ oAMM allows LPs to add liquidity to specific price ranges, thereby increasing liquidity depth and capital utilization efficiency; —Favourable Information for Liquidity Providers
3. oAMM Listing without Permission: In addition, oAMM, like other spot AMMs, supports listing without permission, so anyone can create perpetual futures trading pairs, making the range of currencies unlimited - Favourable for Liquidity Providers.
In addition, I think the most interesting point about SynFutures is the combination of AMM+order book. Next, let’s analyze this innovation point in detail.
As mentioned in Feature 2 above, oAMM allows LPs to concentrate liquidity in a price range, which can be further divided into multiple price units, enabling liquidity providers to provide liquidity in the form of on-chain limit orders on SynFutures.
And this kind of liquidity provision model, similar to an order book, allows many liquidity providers of centralized exchanges to participate more familiarly and conveniently. In essence, it is not much different from the limit order model of centralized exchanges, thereby further improving the liquidity of the pool. After benefiting the liquidity providers, a deeper pool will also attract more users, forming a positive cycle.
Currently, the daily trading volume of SynFutures has exceeded 1.3 billion USD, surpassing the 1.2 billion of the veteran star project dYdX and the 180 million of GMX (not in the top ten), showing a very strong performance in trading volume, bringing new vitality to the derivatives track.
![漫谈DeFi的发展史与未来]()
Overall, whether it is the finance faction or the web2 integration faction, they are looking forward to more native and interesting projects, involving more people and money, to find a sustainable trigger point for the outbreak of the bull market in this cycle in the short term, and in the long term, to penetrate more into the traditional world and give birth to more mass adoption.
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