Crypto Perpetual Open Interest Dives 43% in Wake of FTX Collapse
Binance Holds a Larger Piece of a Smaller Pie
By: Tarang Khaitan •Markets
As the shockwaves from the collapse of FTX continue to ripple through crypto, open interest in perpetual swaps has taken a massive hit. The now-defunct exchange accounted for nearly a quarter of the market prior to its downfall, according to data analytics firm Messari.
Perpetuals Trading Volume. Source: Messari
Cumulative open interest dropped 43% to $14B from close to $25B.
Binance, the leading crypto exchange, managed to increase its market share by 9.6%. Meanwhile, DeFi protocols combined gained just 3%. The data were collected for the period between Nov. 8 and Nov. 14.
“A limiting factor for DeFi’s ceiling remains expensive transactions and slow block times,” Messari said.
Since being introduced in 2016 by Bitmex, perpetual swaps have become a staple of the industry.
On Nov. 22, derivatives accounted for $156B in 24-hour trading volume, while spot volume on centralized exchanges stood at $76B. Meanwhile, spot trading volume on decentralized exchanges came in at just $2.81B.
DeFi Perpetuals Surge
Perhaps the two most well-known DeFi protocols that offer perpetual swaps are GMX and dYdX. In the wake of FTX’s collapse, both protocols witnessed a brief spike in volumes, which sent their respective tokens soaring.
dYdX’s titular token is up 25% in the past month while GMX has posted a 16.5% gain during the same period. This is in contrast to ETH which fell approximately 16%.
As such, both dYdX and GMX have outperformed the broader markets.
On Nov. 16, data from Nansen suggested a sharp increase in TVL and user metrics across many leading DeFi protocols including MakerDAO, Compound, Aave, and Curve.
However, on Nov. 18, Chainalysis reported that most of the activity was coming from a single MEV bot.
“This particular MEV bot has sent just under $19 billion to DEXes since November 4, making it the third-biggest source of funds sent to DEXes among all smart contracts,” Chainalysis said.