DeFi Revival Wave: Why We're Bullish on Base Derivatives Leader SynFutures

1. The Resurgence of DeFi

Bitcoin finally saw its long-awaited new all-time high in November, edging closer to the $100,000 mark. The long-dormant altcoin market also experienced a surge, with DeFi leaders such as UniSwap, AAVE, Compound, MakerDAO, and others seeing significant price increases. Looking back from the DeFi boom in 2020 to the present, despite the continuous bearish sentiments, the DeFi world continues to grow steadily and expand, gradually eating into the market share of centralized exchanges. This remains a track full of innovation and immense potential, with many possibilities waiting to be explored. Today, let's discuss one of the most noteworthy projects in the recent DeFi ecosystem—Base Derivatives Leader SynFutures. We will explore how it leverages its strengths to lead a new wave of DeFi innovation, disrupt the entire decentralized derivatives market, and the reasons behind its rapid growth and future growth prospects.

2. SynFutures' Performance After Launching Base: Capturing 50% Market Share, Ranking 3rd in Protocol Fee Revenue

Let's first look at SynFutures' data performance in the Base derivatives market:

- Launched Base on July 1, with trading volume surpassing $100 million within 10 days of launch

- Recently, on November 12, the trading volume surpassed $9.1 billion in a single day

Total trading volume approaching $30 billion, with a daily average volume of $2.1 billion

Q3 trading volume accounted for nearly 50% of the Base network

The past 24-hour trading volume accounted for 72% of the Base network, nearly 5 times that of the 2nd place

However, if we shift our focus to the entire industry, we can see the growth of SynFutures V3 since its launch, which is no less impressive compared to projects like Hyperliquid, dYdX, and Jupiter. According to DefiLlama data, the on-chain perpetual contract trading volume in Q2 and Q3 was $1.1857 trillion, with the top 3 accounting for over 45% of the volume, namely Hyperliquid (16.94%), dYdX V3 & V4 (14.37%), and SynFutures (14.11%).

These remarkable achievements undoubtedly raise curiosity: why SynFutures? What sets it apart from other derivatives platforms?

III. SynFutures: The Disruptor of the Derivatives Race – Concentrated Liquidity + On-Chain Order Book Model

Looking back at the derivatives race in the past few years, the mainstream derivative models fall into the following three categories:

- Vault Model represented by GMX — LP as the counterparty to the trader, using an oracle for pricing. Currently, the flagship products in this race are GMX and Jupiter. While GMX supports more assets, Jupiter, benefiting from SOL's popularity, has maintained a high-yield, high TVL trend, becoming one of the industry's hot projects. However, the oracle risk in this model is still a significant concern. Additionally, due to oracle-based pricing, these platforms cannot serve as a price discovery venue, making it challenging to challenge centralized exchanges.

- Derivatives Application Chains represented by dYdX, Hyperliquid — These platforms, known for their high performance and experience comparable to centralized exchanges, have gained favor among liquidity providers, securing a place in the market. Nevertheless, their off-chain order books that are too centralized and liquidity fragmentation remain significant challenges for traders and projects.

- Meanwhile, another relatively understated but already gaining a decent market share model is the on-chain AMM model represented by SynFutures. This model draws inspiration from UniSwap V3's concentrated liquidity model and introduces an on-chain order book to further enhance the overall system's capital efficiency. As seen from the previous rankings of Q2 and Q3 derivatives trading volume and market share, in the past six months, SynFutures, a representative of this model, **has a trading volume of over double that of Jupiter, which adopts the Vault model. This momentum has not stopped there. Recent data suggests that surpassing the total trading volume of the well-established decentralized derivatives exchange dYdX is only a matter of time.

So, why has the on-chain AMM model represented by SynFutures been able to achieve such a huge breakthrough in a short period of time? What advantages does this type of model have compared to the other two mainstream models?

3.1 Concentrated Liquidity — Improving Capital Efficiency

SynFutures' oAMM allows LPs to add liquidity to a specified price range, greatly increasing the depth of AMM liquidity and capital efficiency. This supports larger and more transactions while generating more fee income for LPs. According to its documentation, its capital efficiency can reach up to 26,666.6 times the original.

3.2 On-Chain Order Book — Maintaining Efficiency with Transparency

The liquidity of the oAMM is distributed within a specified price range, which is composed of several price points. For example, an LP provides liquidity in the [80000, 90000] range of BTC-USDC-PERP, which can be further divided into several price points with equal liquidity allocation. You might immediately think, isn't this an order book? Yes!

The oAMM enables users to provide liquidity at specific price points to achieve on-chain limit orders, simulating the trading behavior of an order book and further enhancing capital efficiency. Compared to the market-making method of traditional AMMs, market makers on centralized exchanges are more familiar with and willing to participate in limit orders. Therefore, oAMMs that support limit orders can better attract market makers to actively provide liquidity, further enhancing the trading efficiency and depth of oAMMs, providing a trading experience comparable to centralized exchanges.

Unlike dYdX and other off-chain order books, oAMM is deployed as a smart contract on the blockchain, where all data is stored on-chain, open for verification by anyone, completely decentralized. Users do not need to worry about exchange manipulation or fake trading issues.

When comparing several projects, you will find that SynFutures effectively addresses the shortcomings of the Vault model represented by GMX and the Layer 2 order book model represented by dYdX, while still maintaining high efficiency and performance. Additionally, it can naturally integrate with various assets of the underlying public chain, blending into the entire DeFi ecosystem with a natural advantage. As the technology of the underlying public chains advances in the future, this advantage will become even more prominent.

IV. Synergistic Effects of the Perp Launchpad

In addition to the characteristics of the model itself, SynFutures also references Pump.fun's model, launching the industry's first derivative perpetual contract issuance platform. Over the past year, it should be said that the most profitable track is asset issuance, from symbols to inscriptions, from Pump.Fun to DAO.FUN, all continuously creating a wealth effect, attracting more users to enter, inevitably making some friends who believe in the value of blockchain feel nihilistic. But this is the reality of the current stage of this industry. Whoever can issue assets, attract market attention, create wealth effects, can take advantage of the trend and become a leader. Whether it's Solana's success at this stage or Pump.Fun's billion-dollar revenue, it is the best proof of this model. The Perp Launchpad recently launched by SynFutures is built based on its own model innovation and a new way of asset issuance, creating an innovative product that can open up more new gameplay for more on-chain Degen players.

Imagine a MEME token that has just reached a $1 billion market cap, only needing to provide liquidity using its own project token to open the corresponding contract market. Wouldn't this coin be even more fun? If truth of terminals could autonomously open a contract market using its held $GOAT in the early days, for more aggressive traders, they can choose to use leverage to achieve higher returns, whether it's for buying the dip or selling the top. When there is a contract market, trading often becomes more complex and offers more trading opportunities. Additionally, in a high-volatility market, with the spread between spot and contract prices, arbitrageurs will also come into play, further expanding the token's popularity and holder count.

Going back to the previous example, if truth of terminals really opened a Perp Market with $GOAT, there would be a new narrative **"AI has launched its own contract market"** to sustain market enthusiasm. Perhaps the market value of $GOAT could further rise. After all, what this market needs most is dopamine, it needs to be interesting, it needs stimulation, and contract trading is the most interesting means.

Of course, some may ask, who will provide liquidity? The answer is the project team and supporters of the token. They can earn rewards by providing liquidity—more tokens. When holders have more tokens, the project can also develop in a healthier direction. And more importantly, why should a centralized exchange dictate whether a corresponding contract is listed, thereby consuming most of the profits generated by contract trading? Why can't the project team and community have their own contract market? This is precisely what the Perp Launchpad aims to do, returning the control of the contract market to the community.

In the past few years, we have seen the power shift of spot listings back to the community, with on-chain liquidity pools as the starting point, and this trend is even more apparent in meme trading. In the coming years, **the dominance of contract listings will return to the hands of the community**. This may sound crazy, but it is already happening and will accelerate. From a recent announcement by SynFutures, its Perp Launchpad  achieved over $1 billion in trading volume in the first week of launch and is rapidly growing.

In the future, we will see more and more project teams choose to dominate their derivative market after launching in the spot market, control the liquidity of the derivative market, and use the profits obtained to help the project develop or reward holders, moving towards a more healthy and sustainable state. 「Trading on Margin」 becomes one of the token's utilities. 「Dividends」 become a standard feature of the token, all of which are happening rapidly under the drive of SynFutures.

As this wildfire spreads, for current SynFutures, it's like providing a huge pump, greatly benefiting its TVL and trading volume growth, bringing it closer to the leading position in the derivative track. Bringing **the control of the perpetual contract market back to the chain, back to the community, represents at least a $10 billion market.** Taking Base Network as an example, Aerodrome's current TVL is $1.4 billion. Even if only 1/10 of the funds choose to have their derivative market, that's a TVL of nearly $150 million. And this is just the TVL of a protocol on a single network like Base. Looking at the entire market, the only one currently capable of doing this is SynFutures, with its oAMM tailored for contract trading, positioning as the biggest beneficiary of this trend.

On the revenue side, in the future, SynFutures also has the opportunity to stand shoulder to shoulder with top protocols such as AAVE, MakerDAO, and others. Currently, excluding the Launchpad scenario, its fee revenue in the past 30 days has exceeded $2 million, ranking it 3rd in the protocol (with the 3rd position being the Sequencer of the Base network).

This potential revenue can help SynFutures rapidly expand its Perp Launchpad market share and become a leader in this race. Currently, in the initial Grant, SynFutures has established a $1 million grant program aimed at providing listing support, event support, etc., to emerging projects, while helping projects increase their visibility and activity in the on-chain market.

As more projects join, this can help SynFutures gain support from more project communities, implying more users, more revenue, which can further help SynFutures expand its market influence and **establish a growth flywheel**. And this is without considering the incentive of its tokenomics on the ecosystem. Let's not forget that SynFutures has raised $38 million from industry-leading institutions such as Pantera, Polychain, Dragonfly, Standard Crypto, Framework, etc., and its future token's potential incentives and drive for the growth flywheel will reach an astonishing level.

Five, SynFutures Will Lead a New Wave of Innovation in Decentralized Derivatives

If you can see this, then you might sense the author's fondness for SynFutures and optimism about its future development trend. Because in my opinion, the derivatives track in the DeFi space has not seen a new story or direction for a long time. We all know about the oracle risk of the Vault mode, and we are also aware of the centralization issue in application chains, but what about the solutions? This track has been quiet for too long and needs new forces to stir it up in order to further compete with the centralized market. In the author's view, SynFutures is undoubtedly the most innovative derivative project in this stage, advancing in lockstep with market demands. From its AMM model designed specifically for derivatives to the recently launched Perp Launchpad, each step is leading a new wave of innovation in the decentralized derivatives track, driving this track towards better development. In the new DeFi market cycle, SynFutures is playing the disruptor in the derivatives track, propelling the entire track toward a new round of innovation and more favorable development!

This article is contributed and does not represent the views of BlockBeats