Showing Early Promise: A Brief Analysis of KiloEX Mechanism and Prospects
Will the largest Perp DEX in the future be on opBNB?
Will the largest Perp DEX in the future be on opBNB?
Written by: CapitalismLab
opBNB has launched its mainnet, but since its release, it has still lacked serious projects. Recently, KiloEX, which is invested by Binance Labs, has also launched on opBNB and introduced a transparent airdrop trading points system.
Will the largest Perp DEX in the future be on opBNB? The answer is: it's possible.
This thread will analyze the advantages and potential of opBNB in the Perp DEX sector, as well as the mechanisms and prospects of KiloEX.
What are the characteristics of opBNB? It is fast, has low fees, and due to the characteristics of BNB, its fees will maintain a long-term advantage compared to L2s on ETH. Therefore, perpetual contract trading, which requires frequent transactions and is sensitive to response times, is one of the products most suitable for opBNB.
KiloEX itself is a Perp DEX similar to GMX, based on oracle pricing. Its core innovations are:
- Built-in hedged stablecoin-neutral LP
- Copy Trading
- Tokenomics that draw from today's advanced mechanisms
Compared to current mainstream Perp DEXs, LPs with automatic hedging mechanisms are more user-friendly for those earning interest, while copy trading is more user-friendly for trading users.
GMX V1/V2 both use LPs composed of non-stablecoins/stablecoins, which improves system security but raises the participation threshold for LPs. Fortunately, the GMX ecosystem is quite prosperous, with many Lego products providing leverage or neutral strategies.
However, for new projects, balancing security and entry barriers is a challenge. There have been cases in the past where pure stablecoin LPs failed, and during bull markets, traders' long positions made significant profits, resulting in heavy LP losses.
KiloEX provides a built-in hedging strategy, offering Vault products that help LP users hedge trader PNL, allowing users to minimize risk while only depositing USDT as LP.
KiloEX will also focus on building a rebate system and copy trading for growth. This business model has already been proven quite successful by CEXs, and currently Binance is vigorously promoting copy trading.
The advantage of on-chain copy trading lies in its transparency, leaving little room for collusion and manipulation by exchanges. In addition, compared to Binance's maximum 25x leverage, KiloEX offers up to 100x leverage, which gives it a certain differentiation advantage and the opportunity to meet some of the unmet needs of Binance users, thereby attracting retail traders from the Binance ecosystem.
As for the current trading-to-earn points campaign, please refer to the official Gitbook.
It is divided into five parts:
- Check-in to earn points
- Trading, based on trading volume
- Providing LP, based on amount
- Referral rebates
- OAT from special events
Aside from the expectation of future airdrops, a cash trading competition has also recently been launched.
How much potential does KiloEX have? Although BNB Chain has been relatively quiet recently, for example, Apollox, a Perp DEX on BSC and also invested by Binance Labs, once reached the top in trading volume. Besides the strong product itself, another reason is that BNB Chain has many trading users, as this chain is closely connected to CEXs.
The gas fee and latency of BSC still lag behind Arbitrum and other L2s, but the experience on opBNB is basically on par or even better. So, is it possible that the largest Perp DEX by trading volume in the future will be on opBNB? It is certainly not impossible.
If someone had said a year ago that a Perp DEX on BNB Chain could organically grow to number one, few would have believed it, but that's exactly what happened. In the last bull market, a huge number of new users entered the crypto ecosystem through Binance and then entered the on-chain ecosystem via BSC. In the next wave, opBNB may also benefit from similar dividends, as there is still significant growth potential for on-chain users compared to exchanges.
Of course, since the probability of opBNB issuing a token is low, the dividends may not be substantial. What if it fails? KiloEX has already partnered early with L2 Manta Network. Manta, for its part, is focused on binding $TIA. If in the future Manta can support KiloEX as OP supports SNX, then there will be another opportunity.
Summary:
- KiloEX is a Perp DEX invested by Binance Labs, first launched on opBNB and has already started an airdrop campaign
- KiloEX focuses on user-friendly features such as automatic hedging LP and copy trading
- opBNB has the potential to give rise to the largest Perp DEX by trading volume in the future
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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