DWF Ventures Explores Innovations in Perpetual DEXs Landscape
On October 11, 2023, DWF Ventures disclosed its primary investment focus on derivative protocols, particularly perpetuals, through a comprehensive Hindsight article. The piece aims to dissect the landscape of decentralized exchanges (DEXs) concerning perpetuals, shedding light on prevalent innovations in this domain.
The journey of perpetuals commenced with Bitmex introducing them in 2016. Since then, the growth trajectory has been striking, with perpetuals now embodying a whopping 97% of the crypto market trading volume. The burgeoning interest in perpetual DEXs underscores the discernible disparity between centralized exchanges (CEX) and DEXs, and the boundless growth potential inherent in perpetual DEXs.
A stark contrast exists between CEX and DEX, especially in terms of central limit order books (CLOB) and trading processes. The blockchain constraints have posed a substantial challenge in mirroring or outstripping the user-centric experience provided by CEX on DEX platforms.
Efforts are being channeled to create a decentralized “CEX experience.” Protocols like dYdX are at the forefront of replicating the Limit Order Book (LOB) model, while HyperliquidX is pushing the envelope in the decentralization spectrum.
In the vein of embracing DeFi innovation, perpprotocol emerged as a trailblazer by introducing the vAMM model. This model serves as a viable alternative for traders yearning for decentralization coupled with instant on-chain liquidity.
DriftProtocol has ventured into a hybrid approach to tackle the inherent limitations of on-chain LOB and vAMMs. This novel methodology involves routing orders through three distinct sources to achieve effective on-chain matching, bridging the gap between traditional order
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