Trading volume on CEXs is still 5 TIMES higher than DEXs.
The runway for DEX growth is enormous as non-custodial solutions continue to gain market share.
Let’s take a deep dive into Arbitrum’s most undervalued leverage trading platform- @muxprotocol
— INTRO —
MUX is a non-custodial exchange for perpetual contracts built on Arbitrum. The MUX suite has two main components
Leveraged Trading Protocol
Leveraged Trading Aggregator
Note: I have been working with MUX to bring awareness about the platform and educate users.
Everyone knows the success stories of GMX and Gains Network. So how can MUX differentiate itself from the competition and take a slice of the pie? One reason is through the recent launch of MUX V2 - Leveraged Trading Aggregator (Dec 2022).
The first-ever one stop access for leveraged trading in the space. There are a few key advantages of the aggregator
Automatically selects best liquidity route
Minimises the composite cost for traders
Optimises liquidation prices.
Currently, MUX can route positions to GMX, Gains and MUX native pool. It also operators on multiple chains (90%+ users are on Arb)
Arbitrum
BNB Chain
Optimism
Avalanche
Fantom
In summary, MUX provides
• Zero price impact
• Up to 100x leverage
• Self custody of assets
• Aggregated Liquidity
Check out their platform for yourself
https://mux.network/
— REVENUE & FEES —
On the back of increasing trading volumes, MUX has been delivering some excellent revenues over the past 7 days
$157.4k - Revenue
$270.5k - Fees
This puts MUX 7th amongst it’s derivative competitors (GMX, dYdX, Gains)
A common way to ascertain valuations in Defi is to look at the P/F or P/S ratio. This is calculated by
P/F = Market Cap / Annualised fees
P/S = Market Cap / Annualised revenues
Similar to the P/E ratio used to evaluate stocks, a lower price to earnings ratio can signify undervaluation of a company/ project. Compared to its competitors (GMX/ GNS), MUX has a much lower value. It has the 3rd cheapest valuation amongst perps.
P/F = 4.1x
P/S = 6.3x
— TOKENOMICS —
The protocol’s tokenomics involves four tokens:
MCB
MUX
veMUX
MUXLP
The protocol's main token is MCB and this has a fixed supply of 4,803,144.
3,803,144 MCB - current circulation
1,000,000 MCB - reserved for future MUX vesting
Users can lock MCB to receive veMUX which entitles them to protocol income (paid in ETH) and MUX rewards. MUX is the protocol’s non-transferable reward token. Users can earn MUX through holding veMUX or staking MUXLP.
— TVL & VOLUMES—
MUX has been riding the Arbitrum airdrop wave recently and has seen TVL grow to over $20m. A strong uptrend which I expect to continue as long as the macro conditions stay favorable.
Total volume traded recently crossed $4b and total unique users continue to grow to just under 12k.
— CLOSING THOUGHTS —
Decentralised exchanges are still the no.1 use case (currently) in DeFi with a TVL currently of $20b. I strongly believe that over the next few years DEXs will continue to grow and take market share away from centralised exchanges.
Leverage trading will always be popular as degens love the crypto casino. MUX have positioned themselves well by building a solid trading platform as well as an aggregator that will benefit from the liquidity growth of competitors.
However, the main risk I see is that the perp market is highly competitive and is starting to become saturated. There are new projects emerging weekly and you need to continue innovating to differentiate yourself from the pack.
Please always DYOR and only invest what you can afford to lose.