Cryptocurrency markets are known for their dynamism and constant evolution, and within this ecosystem, decentralized exchanges (DEXs) play a pivotal role. While DEXs have traditionally offered spot trading, some platforms are now taking things a step further by introducing perpetual trading options.
Perpetuals, a type of futures contract with no fixed expiry date, enable users to trade cryptocurrencies with leverage. In this article, we will delve into the world of perpetual DEXs and explore the top platforms for leveraged trading.
dYdX
Leading the pack in the world of perpetual DEXs is dYdX. This platform offers leverages of up to 10x on most assets, with select pairs like ETH/USD and BTC/USD supporting up to 20x leverage. Traders are subject to a fee of up to 0.50% on their trades. Unlike many DEXs that employ the Automated Market Maker (AMM) model, dYdX opts for the order book method, which is common in centralized exchanges.
The platform combines on-chain and off-chain methods to ensure accurate trade matching. Users are incentivized through the native $DYDX token, with liquidity providers receiving 5.2% of the total token supply and active traders allocated 14.5%. Furthermore, dYdX has ambitious plans to migrate to its own standalone chain in the Cosmos ecosystem, aiming for further decentralization and scalability.
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GMX
GMX is a perpetual DEX built on Arbitrum and Avalanche, offering leverages of up to 50x on all available pairs. The platform charges a 0.1% fee on trades. GMX operates using multi-asset pools, allowing users to provide liquidity in exchange for GLP tokens, representing their stake in the pool.
Liquidity providers are rewarded with 70% of the protocol’s revenue generated from user transaction fees. However, GLP holders are in a counterparty relationship with traders, meaning that if traders win, GLP holders lose. GMX also has its own native token, offering voting power and a share of trading fees generated on the platform.
Gtrade
Gtrade, a product of Gains Network, operates on both the Polygon and Arbitrum networks. The DEX offers high leverage of up to 150x for cryptocurrencies, with a 0.08% fee on trades. Liquidity providers deposit DAI into the gDAI vault to receive gDAI tokens, allowing them to earn a portion of the trading fees. Gtrade also introduces GNS, a utility token designed to enhance the DAI vault’s stability and serve as the protocol’s governance token in the future.
Kwenta
Kwenta, powered by the Synthetix protocol, enables leverages of up to 25x on most pairs and up to 50x on select pairs like BTC/sUSD, ETH/sUSD, and USDT/sUSD. This Platform charges a 0.02% or 0.06% fee on trades and has its own native KWENTA token, offering rewards and voting power. The platform uses the sUSD token, which is collateralized by SNX tokens, ensuring liquidity and efficient trading.
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Level Finance
Level Finance is built on the BNB Chain and Arbitrum and offers leverages of up to 50x on BTC, ETH, or ARB. It charges a 0.1% fee on trades. Similar to GMX, Level Finance separates its liquidity pools into tranches based on the level of risk to traders. LLP tokens, akin to GLP tokens, are given to liquidity providers, granting them 45% of the protocol fee revenue. Level Finance also employs a dual-token model, with LVL as the utility token and LGO as the governance token.
Perpetual Protocol
Perpetual Protocol, a DEX on Optimism, allows traders to leverage their positions up to 10x and charges a 0.1% fee on trades. It introduces a virtual Automated Market Maker (vAMM) for price discovery, with assets stored in a smart contract vault for collateral. The platform has established measures to manage risks and offers incentives through its native token PERP, allowing users to become eligible for weekly USDC rewards.
These are some of the most popular perpetual DEXs in the market, offering traders the opportunity to engage in leveraged cryptocurrency trading. However, it’s essential to keep in mind that while leverage can amplify profits, it can also increase losses. Therefore, risk management should always be a top priority for traders in this dynamic and ever-evolving crypto landscape.
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