Battle of the DEXs — GMX, DYDX, GNS

With the recent FTX news following the collapse of Voyager, I believe more investors will be looking into alternatives across the crypto space. Every bull run has ended with some sort of issue with custodial assets but investors seem to previously have short term memory.

• 2014 — Mt Gox
• 2017 — Bitmex
• 2022 — FTX

My thesis is that due to the amount of marketing FTX did, this one will be forever remembered. They had huge brand ambassadors like sports athletes Tom Brady, Steph Curry, Shaq, and Naomi Osaka. Naming rights to the Miami heat stadium, FTX Arena. On top of that, they also had huge deals with the MLB which included FTX patches on the umpires’ uniforms and Mercedes-AMG Petronas Formula One team. With exposure across almost every major American sport, the assumption is people should remember the downfall of what was one of the largest cryptocurrency exchanges ever.

Crypto comes in cycles — money is lost, few remain, and new money returns to pump to new highs, so now is a great time to start researching the next big sector and/or specific projects that will outperform the rest.

Looking back at the last two cycles (I wasn’t here in 2014), we can see that money for the most part will flow into a handful of sectors within crypto and as the amount of projects has surpassed 10K+, there is alot of filtering to find what has potential to be the next 100x+ play. Clearly no one knows how this will play out so we’re working the research based on probability with a focus on utility. Strong utility will drive prices, but what features will attract the money?

Patterns I’ve noticed below:

• 2017 — Fast chains and smart contracts
• 2022 — Layer 1 DEFI, NFTs, exchange tokens

In the next bull run, I’m expecting to see major development within the COSMOS ecosystem due to the ability for protocols to launch their own sovereign chains and has shown to be attracting top developers. In a way this is an accelerator path as a team doesn’t have to focus resources and time into establishing basic functionalities like ramps, wallets, and trading.

The other trend, and the point of this article, is a new sector focus around DEX protocols. Looking at volume these 2021 CEXs did, the growth potential for this sector is definitely there. This also allows me to diversify outside of the COSMOS ecosystem should my prior statement be false; again this is a game of probability, no one can predict how this all plays out. The 3 projects I will be reviewing are GMX, DYDX, GNS.

Yes, we love Kujira ($KUJI) but have already written about them in the past, so you know where we stand.

First, lets breakdown how we came up with these 3 DEXs over the 100s of protocols. @RistyAssets (Shoot him a follow on Twitter), made the research process for me fairly straight forward by highlighting some top applications on each network.

To help start your research journey, I will share some high level stats and overviews on each of these 3 projects.

GMX — Decentralized Perpetual Exchange allowing for leverage up to 30X directly from your wallet. This protocol is currently live on Arbitrum and Avalanche which covers a good portion of the market. The protocol has a dual token structure with a utility token (GMX), which allows you to partake in governance and 30% of platform fees, and GLP the liquidity token that has no utility but 70% of platform fees. As of today, these have an APY of 16% and 28%.

Stats:

• $310M Market cap
• $81B total trading volume
• 157,027 users
• $82M open interest

DYDX — As of recently, DYDX has shared that they will be moving to COSMOS to launch their own native chain. This DEX allows for 20X leverage with no trading fees on deep liquidity across 35+ pairs. They also have incentives to holding the coin through discounted trading fees, similar to what BNB did at first launch. They also incentive traders to utilize their platform over others through trading competitions, referral links, and trading rewards. Circulating supply is a bit light compared to the total so watching the tokenomics would be recommended to understand the release schedules. Another item to note is that they have location restrictions so could play a part in potential utility (US is restricted).

Stats:

• $260M Market cap
• $758B total trading volume
• 78,537 users
• $202M open interest

GNS — What I believe can take over the Matic network, this is the lowest MC of the three we are reviewing today. It’s backed by not only MATIC but MAKER and LINK which are all highly qualified protocols to utilize. The UX is amazing and could probably pass as a CEX. Leverage up to 150X across 70 markets that include crypto, stocks, and forex. This protocol allows for a variation of staking pools depending on your risk objectives and return goals; currently ranging from 8–35% APY. Similar to DYDX, they have the referral links to incentive users to talk about the platform. I also really like the idea of having a practice platform, Mumbai, to see what it feels like to leverage trade before using real assets.

Stats:

• $93M Market cap
• $20B total trading volume
• 7,800 users
• $5.5M open interest (DAI)

In summary, this is three of the many DEX platforms established today with many more likely to come. The goal of this article is to share the high level details around some of these projects and the differentiators from the competition.

Personally, my favorite of the three is GNS due to a number reasons: UX, access to other asset classes, the high leverage capabilities, FDV, and no location restrictions. I believe the top three networks in the future will be ETH, MATIC, and COSMOS, so that should be taken into consideration when exploring a DEX plays as the multipliers will come with overall network utility.

Follow on twitter at UnDisclosed0x for live updates.

NO INVESTMENT ADVICE — The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.