Which Fork Do I Use?
As we see the rise of the perp DEX narrative, one project has been a clear winner of the market share, GMX. The protocol so profitable that it has now been forked 7 times for a combined TVL of $34M. This reminds me of the UNI forks back in the last cycle which ended up being forked 355 times as of today.
What is GMX? GMX is a decentralized perpetual exchange currently trading between two networks, Arbitrum and Avalanche. The protocol allows for 50x leverage directly from your wallet for BTC, ETH, and AVAX. As of this article, the total trading volume is at $85B with $163M open interest across 165K users. This is all at market cap of $340M with a TVL of $450M doing a total revenue of $104M with the majority of activity coming from the Arbitrum network.
To get a better understanding of this fork game, lets first look at the UNI numbers as a benchmark for performance.
Uniswap
- TVL — $3.64B
- Chains — Ethereum, Polygon, Arbitrum, Optimism, Celo
- 2021 returns — 19x
- ATH MC — 22.5B
To compare, lets look at returns of the top 10 forks by TVL and see how they compare against the originating protocol, UNI.
- PancakeSwap — 106x
- SushiSwap — 34x
- BiSwap — 6x
- VVS Finance — .50X
- Quickswap DEX — 10x
- MDEX — 3.5x
- SpookySwap — 2.4x
- TraderJoe DEX — 4x
- Frax Swap — N/A
- ApeSwap AMM — 18X
Based on this data, the average of the top 10 (9 excluding Frax) averages about 20x with 7 of the 9 underperforming. Given this data I’d say the originating project is the better play as you have a very high chance of being on an unsuccessful fork than the next PancakeSwap or SushiSwap.
Why is this relevant to GMX? With 7 new forks from this protocol which is currently around the MC of UNI when launched, they will fight to gain market share in the Derivatives game. With the MC of these forks being much lower, with the majority being sub $10M MC, it is attractive to investors trying to find the new PancakeSwap. However, if GMX sustains this dominance, it will continue to generate the highest revenues in the space which will attract more liquidity and investors.
In a fast paced crypto environment, everything can change and this data can be completely inaccurate but based on the findings, playing GMX over the forks is the safer play with the higher probability of hitting better returns. Also take into account there are many other Perp DEX plays in the space like GNS, DYDX, etc.
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