Strike Finance is a decentralised derivatives protocol built on the Cardano blockchain. It offers a suite of financial instruments, including perpetual futures, options, forwards, and interest rate swaps. Its perpetual futures product allows traders to speculate on asset prices with leverage without expiration, enabling positions to be held indefinitely.
Perpetual contracts have been a major growth driver in DeFi ecosystems on other blockchains, particularly Ethereum, Arbitrum, and BNB Chain.
Growth Impact of Perpetuals on Other Chains
1. Volume and User Activity
- dYdX (Ethereum → Cosmos): At its peak, dYdX saw daily volumes over $1B, outpacing many spot DEXs. Its success showcased demand for leveraged, non-custodial trading.
Please refer to dYdX’s 2024 annual report. - GMX (Arbitrum & Avalanche): GMX introduced zero slippage trading via oracle pricing and quickly became the top dApp on Arbitrum by TVL, with over $150M TVL and strong fee generation.
- Gains Network (Polygon & Arbitrum): Focused on synthetic trading with minimal collateral. It demonstrated that users are drawn to leveraged markets even on less congested L2s.
2. Sticky Liquidity and Fee Generation
- Perpetuals generate recurring fees from:
- Open/close trades
- Liquidations
- Funding payments (between long/short)
- GMX, for instance, regularly generated $200k-$300k/day in fees during market volatility, rewarding liquidity providers and token holders. Please refer to the GMX live analytics for the current total fees generated.
3. Institutional and Whale Participation
- Perpetuals are more appealing to experienced traders, whales, and even trading firms looking for leverage without custodial risk.
- Their usage has a flywheel effect; more traders, liquidity, fees, and incentive to provide liquidity.
Visit their website for more information on Strike Finance or refer to their documentation for more detailed information.
In this course, you will learn about perpetual, how to use Strike Finance, place a long, short, and close your position, along with staking and managing $STRIKE tokens on the platform.
