Dialogue with Orderly Co-founder Ran: From meme to RWA, Orderly builds the "Taobao of perpetual contracts"

Interview: Mensh, ChainCatcher

Guest: Ran, Orderly Network Co-founder

Organizer: Mensh, ChainCatcher

With the arrival of the 2024 bull market and the launch of Pump.fun's one-click token issuance feature, memecoins have become the flagbearer of the bull market, causing a frenzy across the market, with the market capitalization of memecoins exceeding 100 billion. Along with the skyrocketing market cap of memecoins, the demand for leveraged trading has surged. Memecoin perpetual contracts can meet trading demands, reduce friction costs, and enhance security, making them highly sought-after assets. Major exchanges are racing to launch the latest memecoin perpetual contracts. However, compared to centralized exchanges, players prefer decentralized exchanges with higher odds and more diverse gameplay.

Among them, Orderly Network, as a major player in issuing memecoin perpetual contracts, has chosen to compete differently from dYdX and Hyperliquid by creating a cross-chain order book, aiming to become an infrastructure that breaks trading boundaries, allowing users to trade easily anytime and on any chain.

Just as Taobao provides a platform for merchants and consumers to interact, Orderly offers an infrastructure, while different liquidity providers and decentralized exchanges act as suppliers, buyers, and sellers on Taobao. Moreover, Taobao is not just a simple buying and selling platform; it integrates various functions such as payment, logistics, and customer service. Similarly, Orderly provides features such as a risk engine, matching engine, and shared asset pool, offering comprehensive financial tool support for dApps, including spot trading, leveraged trading, perpetual contracts, and lending.

Additionally, Orderly aims to provide efficient liquidity by collaborating with professional market makers to ensure its network has sufficient liquidity to support trading, similar to how Taobao ensures there is enough product supply in the market. At the same time, Orderly Network is committed to reducing trading delays and costs, providing execution efficiency close to that of centralized exchanges.

Most importantly, like Taobao, Orderly is an open market where anyone can become a "seller" or "buyer." Orderly Network also supports multiple blockchain networks, offering a broader market and higher liquidity.

Just as Taobao aims to "make it easy for anyone to do business," Orderly Network integrates the liquidity of all-chain assets, allowing decentralized exchange-like platforms or products with liquidity needs to address the depth and cross-chain issues caused by fragmented liquidity in a one-stop manner, aiming to make transactions easy for everyone.

On January 10, 2025, the Solana ecosystem Dex Raydium announced its integration with Orderly Network, launching a beta version of perpetual contract trading powered by Orderly's all-chain order book. Raydium has 8.4 million active users, with over 600,000 daily active traders, providing strong support for the Orderly platform.

Currently, Orderly has deployed on 10 chains, including Solana, Near, Polygon, Arbitrum, Optimism, Base, and Mantle. As of now, Orderly has launched perpetual contracts for over 80 assets, including BIO, RUNE, PENGU, TURBO, and AI16Z, with a total trading volume exceeding 90 billion dollars.

This time, ChainCatcher is fortunate to invite Ran, the CEO of Orderly Network, to discuss the market performance after the collaboration with Raydium, the upcoming multi-asset staking, and the mechanism that brings more trading freedom to retail investors.

The Strongest Undertaker of Perpetual Contract Trading Demand in the Solana Ecosystem

ChainCatcher: Orderly and Raydium have just reached a cooperation on liquidity integration. Can you elaborate on this collaboration?

Ran: The perpetual contracts available for trading on Raydium are provided by Orderly. They have become our distributor. Raydium is the largest decentralized exchange on Solana and is naturally a hub for meme perpetual contracts. There are now nearly 30 meme perpetual contracts on Raydium. Recently, AI agent, WIF, and AI16Z, which have garnered significant market attention, all have perpetual contracts.

ChainCatcher: From the data perspective, has there been any performance that exceeded expectations?

Ran: The trading volume of AI16Z has exceeded expectations; before the perpetual contract was launched, the volume was low, but now it is substantial. Overall, the results of the collaboration are very encouraging. With Orderly's support, Raydium's perpetual contracts have exceeded 14 million in trading volume in less than a month, and it has been increasing almost daily. Its TVL is also rising daily, and there has been a noticeable increase in user numbers. Without any marketing efforts, the data has been impressive in just a few days. In the future, we will conduct more activities.

ChainCatcher: What is the significant meaning of this cooperation for Orderly?

Ran: As the largest decentralized exchange on Solana, Raydium serves as a powerful customer acquisition channel. When people want to buy Solana memes and think about leveraging, shorting, or hedging, Raydium is the first place that comes to mind.

We will also collaborate with more decentralized exchanges on Solana. Ultimately, we aim to create a liquidity infrastructure where anyone who wants to integrate our liquidity can do so through our SDK, enabling automated and permissionless integration, allowing more front-end applications to utilize our infrastructure and liquidity.

Maintaining Innovation and Capturing the Huge Growth Space of Meme Perpetual Contracts

ChainCatcher: Can you introduce the situation of memecoin perpetual contracts on the Orderly platform?

Ran: We started launching memecoin perpetual contracts early on, and there are currently 20 memecoin perpetual contracts on the platform, including the hottest Wif, Popcat, and Peanut on Solana. We are usually the first DeFi platform to launch these popular memecoin perpetual contracts.

Orderly now has about 40 market makers supporting us, such as Wintermute and Selini, who are very skilled at providing liquidity. We can quickly capture a new asset and provide liquidity for it. Our current mechanism for launching public assets is: fully diluted valuation (FDV) over 20 million dollars, three price feed sources, and liquidity providers. Our goal is to create a permissionless environment like Uniswap, allowing anyone to easily launch perpetual contracts for any asset.

ChainCatcher: In the hype surrounding memes, what new gameplay can meme perpetual contracts bring to investors?

Ran: Everyone loves memes; some people feel a sense of belonging and like a certain animal or concept, while others find the volatility of memes very exciting. All meme perpetual contracts, especially newly launched assets, can potentially rise several times in a short period, and perpetual contracts can meet the market's further liquidity needs, providing leverage for various emerging spot assets.

The traders, trading volume, and participation level in meme perpetual contracts are higher than those of other assets because the overall user base for memes is larger and more active.

From Pump.Fun to Raydium, when the asset's market cap is only a few hundred thousand, there is no need for perpetual contracts, and there is no demand for shorting; investors prefer to buy spot directly. However, when the asset's market cap reaches 20 million or even 100 million dollars, traders begin to have derivative needs.

As the trading volume of an asset increases, various speculative demands will arise, such as market making in quantitative trading, funding rate arbitrage, or leveraged long or short positions. The market development pattern is that as the trading demand for an asset continues to grow, there will be a demand for derivatives, and we need to quickly meet this demand. Memecoins are just one of the popular asset categories; in the future, more assets will emerge like memecoins, transitioning from initially only having spot listings to having a demand for perpetual contracts as their market cap grows.

The Taobao of Perpetual Contracts: Fastest Launch and Deepest Liquidity for On-Chain Assets

ChainCatcher: Orderly Network is not just an exchange; it is more like a platform similar to Taobao. Can you elaborate on the logic behind this analogy?

Ran: We can understand Orderly as a "liquidity Taobao platform in the Web3 space." We provide an integrated and convenient trading environment that allows various trading activities to proceed smoothly, enabling buyers, sellers, and liquidity providers to find each other, match demands, and conduct efficient and secure transactions. Trading users are the buyers, while brokers act as seller shops on Taobao, opening stores on the Orderly platform, utilizing the resources and infrastructure provided by the platform to offer various trading services. Our key partner, WooFi, is similar to Tmall. On WooFi, users can find higher quality products and services.

For users, they can choose their preferred chain for interaction, avoiding cross-funding losses, while always controlling their funds and experiencing trading supported by strong liquidity; for decentralized exchanges and developers in the ecosystem, they can leverage the platform's liquidity to develop more comprehensive financial products to meet user needs; for project parties, they can gain support from decentralized exchanges and market makers on the Orderly platform to list perpetual contracts and increase trading volume.

ChainCatcher: The crypto market maker Wintermute once said that compared to other decentralized exchanges, Orderly Network has the best liquidity in DeFi perpetual contracts. Can you share your advantages and characteristics in this regard?

Ran: We have focused on liquidity from the beginning because we are building the underlying infrastructure and liquidity layer, deploying across multiple chains to create a shared order book. This means that merchants on our platform can directly provide cross-chain trading services.

Additionally, we have 40 market makers providing liquidity, and the platform offers them various incentives, such as setting up a dedicated fund pool that distributes income to market makers in token form. Currently, this pool mainly targets professional market makers, and we will soon launch a pool for individual investors. Anyone can provide liquidity, and professional market makers can utilize these funds and share the profits to enhance liquidity.

Moreover, based on our previous experience and background in running exchanges, we can identify who the best market makers are and who is most capable of providing liquidity for various assets. Specifically, I am a co-founder of WOO, and we had a close partnership with WOO in the early days. Different market makers excel in different areas, which is something we need to understand. For example, some market makers are only good at quoting on the order book, generating a large trading volume but lacking depth; others primarily engage in arbitrage, but we need to be cautious of excessive arbitrage situations, which can generate high trading volume but harm liquidity. We will set up certain defensive mechanisms and incentives for different market makers' styles to encourage them to "effectively market make."

A Major Shift in the Competitive Landscape of Decentralized Exchanges: The Explosion of On-Chain Perpetual Contracts is Imminent

ChainCatcher: Why has Hyperliquid been able to achieve such high visibility in this cycle?

Ran: Hyperliquid has done several things very well. They have innovated with the HLP treasury, and their own team acts as a major market maker. The user funds in HLP can be used for market-making trading, which has attracted many people. Additionally, their product is very simple; using funds placed in bots for market-making brings good liquidity, creating a virtuous cycle. Hyperliquid has also introduced some innovative products, such as its spot auction system.

However, conversely, this product also has a certain ceiling; currently, Hyperliquid's spot exchange only lists native assets that meet the HIP-1 standard, which means that the quality of tokens in its ecosystem may not be particularly high.

ChainCatcher: Compared to Hyperliquid, what competitive advantages does Orderly Network have? What are the similarities and differences between the two?

Ran: Our biggest difference is that Hyperliquid is focused on a single chain, encouraging everyone to develop or trade on that chain. We are building a custodial smart contract on each chain, allowing users' assets to remain on their original chains. Our current model empowers mainstream applications on each chain to call our existing perpetual contract products.

Our advantage is that users can stay on their own chain without needing to transfer assets to other chains. Of course, we also have a chain, but that chain is for settlement, reducing users' friction costs and enhancing security. Moreover, Hyperliquid only has four validator nodes, making it quite centralized. We are more decentralized.

Currently, we only support USDC as collateral, but as we support more assets as collateral in the future, our advantages will become more apparent. Our goal is to create a DeFi experience similar to Binance, where any user can deposit and withdraw local assets while supporting a multi-chain experience, and everything is transparent and on-chain.

ChainCatcher: How do you view the future development of perpetual contracts? What areas were previously lacking? What improvements can be made in this cycle?

Ran: The development space for perpetual contracts is enormous. Decentralized perpetual contracts account for only 3% to 5% of centralized perpetual contracts, with Hyperliquid currently leading. Previously, only dYdX and GMX were involved in perpetual contracts, but now many different players have emerged, and the products are getting better. Generally, the reasonable ratio of perpetual contract trading volume to spot trading volume should be around 3:1 to 4:1. In DeFi, it is roughly similar. Based on this ratio, the recent daily spot trading volume in DeFi was 13 billion dollars, while perpetual contracts were only 10 billion dollars. The reasonable scale for perpetual contracts should be 40 billion dollars, but even at 40 billion dollars, it only accounts for 6% to 10% of CeFi, so there is a lot of room for growth. On-chain spot and perpetual contracts will definitely develop faster.

In this cycle, much of the pricing power for spot assets has shifted to DeFi, with most trading volume and liquidity occurring on Raydium. In the previous cycle, price discovery for any coin happened in CeFi, with small coins listed on exchanges like MEXC and Gate.io before moving to Binance. However, with product iterations, wallet advancements, and the increasing market share of decentralized exchanges, the next phase will be the explosion of perpetual contracts.

However, perpetual contracts also need some innovations, such as liquidity pools or perpetual contracts for many assets that cannot be listed on CeFi, or those that are faster than CeFi, or self-listing.

Committed to Becoming the "Preferred Trading Infrastructure"

ChainCatcher: How did you transition from traditional finance to WOO and then start Orderly Network?

Ran: I initially worked in bond derivatives in the U.S. before returning to China to work in private equity, always with a trading background. In 2018, two of my college classmates who were working on Kronos invited me to join them. I chose to become their CEO and partner; Kronos is currently a high-frequency trading company, which was our first company.

In 2019, we established WOO, initially focusing on dark pools, essentially an institutional exchange. At that time, I felt that the infrastructure of exchanges was too poor, so I thought it would be better to create one myself, and that's how WOO started, which has now evolved into a consumer-facing exchange.

After DeFi Summer, WOO launched a product called WOOFi. Now WOOFi has a daily trading volume of over 100 million dollars, and its contracts are built on Orderly.

I believe that DeFi is the next iteration of finance, and the migration of investors from CeFi to DeFi will become a trend. Finance will become increasingly decentralized, whether in chains or wallets. In the future, most of the infrastructure for cryptocurrency trading will be on-chain and in DeFi, whether for spot or contracts. Since the popularity of DeFi spot trading in 2021, we believe that the next phase for order books should be perpetual contracts, which is why we incubated Orderly with Near.

ChainCatcher: What are the short-term focuses and long-term roadmap for Orderly Network?

Ran: The long-term roadmap for Orderly is to become the preferred trading infrastructure, where different trades may involve Orderly's infrastructure, even if users may not directly interact with it.

Any app with trading needs can easily integrate with Orderly, just like Taobao, where merchants will find us to open accounts for trading and liquidity. It is owned by the community. Any contributor can be a stakeholder and receive the incentives they deserve. We plan to share 60% of the fees with token holders, and in the future, it may be 100%. They will govern, although governance has not been launched yet, but Orderly will definitely become more decentralized.

In the short term, we plan to launch some core products. One is a liquidity pool that allows anyone to initiate and finance from the user side, with funds that can be traded on Orderly and even traded on other platforms in a custodial manner. This will generate various sources of income to enhance our liquidity and trading volume, allowing ordinary investors to obtain substantial returns. This feature is planned for launch at the end of January or early February. The second important product is multi-asset collateral, which will accept more assets as collateral, and these assets can earn interest on Orderly.

Our ultimate goal is to simplify, automate, and make transparent the issuance of assets, allowing anyone to list any asset based on established mechanisms, enabling everyone to trade.