In the year of the rise of decentralized derivatives, these 43 value projects are worth paying attention to

This article was published on Planet Daily by Huang Xuejiao.

In the traditional financial sector, the volume of derivatives is 40 to 60 times that of spot trading. However, in the crypto finance sector, according to BitWell CEO Jeff Young, the current trading volume of crypto derivatives accounts for only 40.32% of the total trading volume of digital assets. Many practitioners believe that crypto derivatives still have significant room for growth, "and it is even entirely possible for several derivatives exchanges of the size of Binance to emerge."

Similar to spot trading, derivatives trading corresponds to two types of solutions: centralized platforms and DEX. The continuously refreshing achievements of DEX have confirmed the explosive potential of decentralized trading. So, will decentralized derivatives platforms continue to replicate the path of DEX?

At least, many investors believe so. According to incomplete statistics, since September last year, there have been 7 rounds of financing announced in the decentralized derivatives field, with investment amounts ranging from $2 million to $10 million, and top-tier capital in the industry has basically entered the market.

At an event hosted by Odaily Planet Daily in early January this year, Dragonfly Capital partner Mia Deng stated that there have been some small signs of activity in the derivatives sector this year, and overall it will be a very good track. "Currently, we have not announced any actions in this area, but we are already looking at some projects that are working on structured products or decentralized derivatives."

Mable Jiang, a partner at Multicoin Capital, pointed out that there are two directions in the derivatives field that are particularly worth paying attention to. "One is decentralized perpetual contracts, as perpetual contracts are the most capital-efficient method among all derivatives, saving resources. The second direction is yield tokenization, which includes fixed-rate swaps that are actually a form of yield tokenization."

Some entrepreneurs in decentralized derivatives also believe that just as DEX supplements (or even replaces) CEX, the explosion of decentralized derivatives and the replacement of centralized trading methods is only a matter of time.

Compared to centralized derivatives, DeFi derivatives protocols have five major advantages:

• No centralized exchange operators, leading to lower long-term costs;
• Permissionless access, giving it censorship-resistant characteristics; no one can shut down, control, or change the trading protocol;
• Users hold their own funds, eliminating counterparty risk;
• Permissionless trading varieties; any asset with public price feeds can be traded;
• No withdrawal limits or trading volume restrictions.

Despite these advantages, decentralized derivatives trading has previously faced issues such as poor trading experience, insufficient liquidity, and unclear accountability in case of accidents. Fortunately, with the integration of Layer 2 solutions and some projects introducing AMM models and yield farming mechanisms, some of these issues are gradually being improved.

According to statistics from the DDX Chinese community, in the third quarter of 2020, the trading volume of the digital asset derivatives market reached $2.7 trillion, a quarter-on-quarter increase of 25.1% and a year-on-year increase of 159.4% compared to the third quarter of 2019.

However, a slight comparison with the trading volume of centralized derivatives shows that decentralized derivatives are still in their infancy.

To this end, Odaily Planet Daily has compiled a list of new and old projects in the three major markets of decentralized derivatives trading, prediction, and insurance for everyone to pay attention to and participate in. In the future, we will also conduct a series of reports on the star projects among them, so stay tuned.

(Note: The publication date of this article is February 8, 2021. In the following text, any tokens not issued refer to those not issued as of February 2021.)

01 Derivatives Trading

(1) Leverage, Futures (19 items)

• dYdX

(https://dydx.exchange/, not issued)

dYdX is the largest decentralized derivatives trading platform by trading volume on Ethereum, supporting lending, spot, leverage, and perpetual contract trading.

Previously, dYdX completed three rounds of financing totaling over $20 million.

Investors include: a16z, Polychain Capital, Kindred Ventures, 1confirmation, Elad Gil, Fred Ehrsam, Three Arrows Capital, DeFiance Capital, Wintermute, Hashed, GSR, SCP, Scalar Capital, Spartan Group, RockTree Capital.

• Vega

(https://vega.xyz/, not issued)

Vega is a decentralized derivatives trading protocol based on Layer 2, intending to provide products including futures, swaps, options, etc.

In 2019, Vega announced it had raised $5 million in a seed round led by Pantera Capital, with other investors including Ripple's Xpring, Hashed, and KR1.

In March 2020, Vega launched its testnet, allowing parties to build trading products on it.

• Globedx

(https://globedx.com/, not issued)

Globedx is a decentralized derivatives trading protocol that supports coin-based perpetual contracts with leverage up to 100 times.

So far, Globe has completed two rounds of seed financing totaling $3.15 million.

Some investors include: Pantera Capital, Y Combinator, and billionaire Tim Draper.

• DerivaDEX

(https://derivadex.com/, token: DDX)

DerivaDEX is a decentralized contract trading protocol planned to launch in the first quarter of 2021.

So far, DerivaDEX has completed two rounds of financing totaling $2.7 million.

Investors include: Polychain, Dragonfly, Three Arrows Capital, Coinbase Ventures, CMS Holdings, Calvin Liu (Compound CSO), Phil Daian.

• Serum DEX

(https://dex.projectserum.com/, token: SRM)

Serum is a DEX that emphasizes high speed and low fees. On July 27, 2020, FTX announced a partnership with the DeFi project Serum, with FTX founder Sam Bankman-Fried serving as an advisor to Serum. On August 30, the first decentralized exchange Serum DEX officially launched. The three main features of Serum DEX can be summarized as: fast low-cost experience based on Solana, the ability to build a complete order book, and providing risk collateral.

In September 2020, crypto and stock market maker Jump Trading invested in Serum and provided liquidity.

• Injective

(https://injectiveprotocol.com/, token: INJ)

Injective is a decentralized derivatives trading protocol running on Ethereum and based on COSMOS Layer 2, supporting perpetual and futures contracts, options, and has launched derivatives trading for gold, yield farming, Tesla, and Google stocks. However, currently, the test version only allows perpetual contracts, while futures and options contracts are expected to be available in the second half of 2021.

So far, Injective has completed two rounds of financing, a $2.6 million private placement round and a seed round from Binance Labs in 2018.

Investors include: Pantera Capital, QCP Soteria, Axia8 Ventures, K42, Jin Ke Capital, and Compound strategic head Calvin Liu, DRW partner Josh Felker, etc.

• Sovryn

(https://sovryn.app/, token: SOV)

Sovryn is a decentralized lending and leveraged trading platform built on the Bitcoin sidechain RSK.

Previously, Sovryn announced it raised $2.5 million through a token presale.

Some investors include: Greenfield One, Collider Ventures, and Monday Capital.

• DDEX

(https://ddex.io/, not issued)

DDEX is a decentralized margin trading platform built on the open-source exchange framework Hydro protocol.

Previously, DDEX announced it raised $2.1 million in financing, with leading institutions including Initialized Capital and ZhenFund.

• Perpetual

(https://perp.exchange/, token: PERP)

Perpetual (formerly Strike protocol) is a decentralized perpetual contract protocol. In January of this year, Perpetual announced the launch of its mainnet, allowing users to trade Bitcoin and Ethereum perpetual contracts with leverage up to 12 times, without paying gas fees during the trading process.

So far, Perpetual has completed $1.8 million in financing.

Investors include: Multicoin Capital, Zee Prime Capital, Three Arrows Capital, CMS Holdings, Alameda Research, Binance Labs, Mechanism Capital, Divergence Ventures.

• SynFutures

(https://www.synfutures.com/, not issued)

SynFutures is a decentralized futures exchange that has launched its testnet.

In January 2021, SynFutures announced it completed $1.4 million in seed round financing.

Some investors include: Dragonfly Capital and Standard Crypto.

• Futureswap

(https://www.futureswap.com/, token: FST)

Futureswap is an AMM-based perpetual contract platform that allows users to trade any ERC20 token with leverage up to 20 times.

Previously, Futureswap announced it raised $400,000, with disclosed investors being Framework Ventures.

• Nuo

(https://nuo.network/, not issued)

Nuo is a platform that supports decentralized lending and margin trading.

So far, Nuo has completed over $250,000 in financing.

Investors include: Sequoia Capital (Surge Program), Polychain Capital, Dragonfly Capital, Consensys Labs, Astarc Ventures, Singapore Angel Network, Amrish Rau, Jitendra Gupta (CEO PayU India), Nitin Sharma (Incrypt).

• MCDEX

(https://mcdex.io/, token: MCB)

MCDEX is a decentralized perpetual contract and futures exchange built on the Layer 2 scaling solution Arbitrum Rollup.

In September 2020, MCDEX announced it completed its first round of financing, with the specific amount undisclosed.

Investors include: Arthur Cheong (DeFinance Capital), Qiao Wang, DeFi Dad (Zapper), Yang Mindao (dForce CEO), Lei Yu (Fortube CEO), Zhang Yuanjie (Conflux co-founder), Steve Guo (Loopring CTO), Lei Mingda (DODO co-founder), Leo Cui (Talking Data), YOOZOO Games.

• Kwenta

(https://kwenta.eth.link, not issued)

Kwenta is a derivatives trading platform built on the Synthetix protocol, with recent trading volume exceeding $500 million.

• LN Markets

(http://lnmarkets.com, not issued)

LN Markets is a Bitcoin derivatives exchange built on the Bitcoin sidechain Lightning Network. Since its launch in March 2020, the platform's total trading volume has reached $18 million.

• Leverj

(https://www.leverj.io/, token: LEV)

Leverj is a Layer 2 decentralized derivatives exchange based on Plasma, currently offering forward perpetual contracts for Bitcoin and Ethereum, accepting USDT as margin and settlement currency.

• bZx

(https://bzx.network/, token: BZRX)

bZx is a platform that supports decentralized lending and margin trading.

• Volmex

(https://www.volmex.finance/, not issued)

Volmex.finance is a volatility index and futures trading platform based on Ethereum, which has integrated the Optimism Layer 2 scaling solution.

• SynLev

(https://synlev.com/, token: SYN)

SynLev is a platform for generating and trading synthetic derivative tokens.

• dFuture

(https://testnet.dfuture.com/home, token: DFT)

dFuture is a decentralized derivatives trading protocol currently in public testing. It is reported that the project is initiated and incubated by the MIX Group's Mix Labs.

• UniMex Network

(https://unimex.network, token: UMX)

UniMex is a decentralized margin trading platform based on Uniswap, allowing users to open long and short positions based on Uniswap token pairs. The trading fees generated from margin trading are allocated to lenders, UniMex stakers, and partner stakers.

(2) Options (8 items)

• Opyn

(https://opyn.co/, not issued)

Opyn is an on-chain options platform built on the universal options protocol "Convexity Protocol," positioned to provide insurance services to users through options trading.

So far, Opyn has completed two rounds of financing totaling $8.86 million.

Investors include: Paradigm, Dragonfly, 1kx, Version One Ventures, DTC Capital, Uncorrelated Ventures, A.Capital, Synthetix co-founder Kain Warwick, and Aave founder Stani Kulechov.

• Opium

(https://opium.network/, token: OPIUM)

Opium is a decentralized platform that supports the creation, settlement, and trading of any derivatives, currently supporting the creation and trading of options and insurance markets.

In November last year, Opium raised $3.25 million in financing.

Investors include: QCP Soteria, HashKey, Galaxy Digital, Rockaway Blockchain Fund, MetaCartel Ventures, Alameda Research, Launch Hub, CMS Holdings, Kenetic Capital, One Block, SevenX, Zee Prime, Stani Kulechov (Aave Founder), Jordan Momtazi (Synthetix Founder), Trevor Koverko (Polymath Founder).

• Hegic

(https://www.hegic.co/, token: HEGIC)

Hegic is a decentralized options platform based on the AMM model, currently supporting American options. In April 2020, the V1 version of the protocol was launched; on September 9, 2020, the HEGIC token was issued through a joint curve contract, and in October 2020, the mainnet v888 version was launched.

Due to its early launch, Hegic currently has a locked volume of about $56 million, ranking first among decentralized options trading platforms. According to the latest data from December 2020, Hegic's options trading volume has exceeded $88 million.

Data from: debank.com

• FinNexus

(https://finnexus.io/, token: FNX)

FinNexus is a decentralized options protocol. The mainnet has already launched.

In August 2020, FinNexus received a strategic investment of $1 million from Jubi Labs.

• Primitive

(https://primitive.finance/, not issued)

Primitive is a decentralized options market, with the mainnet officially launched on February 8.

• Siren

(https://sirenmarkets.com/, token: not issued)

Siren is a decentralized options protocol for creating, trading, and redeeming fully collateralized options contracts for ERC20 tokens. Siren uses a binary options model similar to Cover and specifies the strike price and expiration date.

• Charm Finance

(https://beta.charm.fi/, not issued)

Charm Finance is an AMM-based decentralized options protocol that supports market pricing and automatic settlement.

• Oddz

(https://oddz.fi, not issued)

Oddz is a multi-chain options trading platform on Binance Smart Chain, Polkadot, and Ethereum, focusing on achieving zero gas fees through cross-chain transactions.

02 Prediction Markets (5 items)

• Augur

(https://augur.net/, token: REP)

Augur is not only the first prediction platform but also the first dApp on Ethereum, officially launched in June 2015. Its prediction process mainly consists of four steps: creating markets, trading, reporting, and settlement. Vitalik Buterin has also served as a project advisor for Augur.

So far, Augur has completed three rounds of financing, with the investment amount undisclosed, and investors include OracleDAO, KR1, etc.

• Polymarket

(https://polymarket.com/, not issued)

Polymarket is a prediction market built on Matic Layer 2, allowing users to bet on hot controversial topics such as the coronavirus, politics, and current events. Transactions incur a 2% fee, which will be paid to liquidity providers.

In October 2020, Polymarket announced it raised $4 million in financing.

Investors include: Polychain Capital, Naval Ravikant, Balaji Srinivasan (Coinbase CTO), Meltem Demirors, 1confirmation, ParaFi, Jack Herrick, Kal Vepuri, Stani Kulechov (Aave founder), Kain Warwick (Synthetix Founder), Samir Vasavade, Marc Bhargava, Calvin Liu.

• Catnip

(https://catnip.exchange, not issued)

Catnip, as a project in the Augur ecosystem, mainly focuses on the trading layer, providing an order book and AMM mechanism trading platform for Augur.

• Prosper

(https://prosper.so/, token: PROS)

Prosper is a short-term prediction market platform on Binance Smart Chain, where players can predict the BNB market and earn PROS token rewards.

• Numerai

(https://numer.ai/, token: NMR)

Numerai is a trading data network for data scientists, incentivizing them to predict models to improve hedge fund returns.

03 Decentralized Insurance (8 items)

• Nexus Mutual

(https://nexusmutual.io/, token: NXM)

Nexus Mutual is a pioneer in DeFi insurance, with its first product being "smart contract insurance," allowing users to purchase insurance to mitigate asset losses caused by code defects or hacking of smart contracts on Ethereum.

In 2018, Nexus Mutual completed a seed round of financing, with investors including KR1 and Kenetic. According to estimates, the seed round financing amount for this project was around $1.5 million.

According to DeBank, Nexus Mutual currently has a locked volume of $328 million, ranking 21st among various DeFi platforms with locked volumes.

Data from: debank.com

• COVER

(https://coverprotocol.com/, token: COVER)

COVER is a decentralized insurance market that aims to tokenize the rights and obligations of insurance, allowing market participants to freely gamble and achieve insurance functionality through arbitrage.

On December 28, 2020, Cover was hacked due to an infinite minting vulnerability (twice), resulting in over $5 million in asset losses. The vulnerability has since been fixed.

• UNION

(https://unn.finance/, token: UNN)

UNION is a decentralized insurance platform, with products expected to launch soon.

In November last year, UNION completed a round of financing totaling $3.9 million, with participants including Alameda Research, Solidity Ventures, 3Commas, and Black Edge Capital.

• Nsure

(https://nsure.network/, token: Nsure)

Nsure Network is a decentralized insurance platform, with premiums determined by a dynamic pricing model. This model uses capital demand (total insurance purchasing power) and capital supply (total number of staked Nsure tokens) as parameters to jointly determine the final premium.

In September last year, Nsure Network completed a $1.45 million seed round of financing led by Based Ventures, with other investors including Mechanism Capital, Caballeros Capital, 3Commas Venture, AU21, SignalVC, and Genblock.

• Umbrella

(https://yam.finance/umbrella, not released)

Umbrella is a DeFi insurance protocol released by Yam Finance. The project team is currently developing the alpha version code for Umbrella, which will then undergo internal testing in the Yam community.

• Unslashed

(https://www.unslashed.finance, token: not released)

Unslashed Finance is a DeFi insurance protocol that announced the launch of its mainnet in January this year, with an invitation-only approach.

• Helmet

(https://helmet.insure/, token: HELMET)

Helmet is an asset price insurance trading protocol based on the Binance Smart Chain (BSC), built on options trading logic, primarily serving on-chain assets on BSC. Anyone or any protocol can create insurance for assets and publish policies to the market by calling the Helmet contract. On January 13, Helmet reached an IFO cooperation with PancakeSwap, selling a total of 10 million HELMET tokens. On January 21, Helmet completed the first CAKE short insurance policy airdrop, generating a limited 100,000 policy certificates for CAKE-LONG tokens.

• Soteria

(https://soteria.finance/#/, token: SOTE)

Soteria is a decentralized mutual insurance platform. By staking tokens, users are both beneficiaries and risk bearers. At the same time, token holders can use their held tokens to decide how much insurance coverage a project can have and whether to approve claims.

Soteria has currently launched on the Binance Smart Chain.

• PolkaCover

(https://www.polkacover.com, token: CVR)

PolkaCover is a decentralized insurance protocol based on the Polkadot ecosystem, with the platform divided into four development phases: crypto insurance products, global markets, P2P insurance, and decentralized governance and arbitration.