Perp DEX Track Facing "Midlife Crisis": Rise Dilemma and Future Outlook

Recently, a well-known perpetual contract decentralized exchange launched a new version, but the market response has been tepid. This phenomenon reflects the overall bottleneck period that the current perpetual contract DEX track is facing. This article will delve into the current situation of this track, the rise challenges, and their roots, as well as explore possible solutions and future development directions.

The overall trading volume of perpetual contract DEX tracks remains around 60% of the peak period, but the decline in revenue and user numbers is more pronounced. The daily active user count is only 30% of the peak period, comparable to the peak data of a leading platform. It is worth noting that the current trading volume data is highly dependent on token incentives, which is significantly different from the earlier growth model based on real user behavior.

Taking the trading front end of a well-known synthetic asset protocol as an example, its trading volume greatly benefits from generous trading incentives. This includes substantial token rewards received weekly from a certain L2 public chain, as well as the issuance of its own tokens, totaling nearly $600,000 in incentive funds each week. Another outstanding front end in the same series has also adopted a similar incentive strategy.

Although trading incentives have led to a rise in trading volume, the results are not ideal when looking at the number of active addresses. Some platforms have trading volumes three times that of leading platforms, but the number of active addresses is only about one-third. After removing users who manipulate incentives, the actual number of users may be even lower.

Why is it difficult for trading incentives to attract real users? The main reason is that professional teams will inflate the trading volume to a very high level, resulting in a lower average incentive level. For retail investors, trading on these platforms does not yield much additional profit, making it hard to attract a large number of real users to migrate.

Without attracting real users, it is impossible to achieve healthy natural rise. In this case, the token becomes the most important product. When the market is good, everyone pays attention to the data; when the market is bad, the problems become apparent.

This dilemma stems from the challenge of identifying "real users on-chain". If an address is simply equated to a user, it will lead to situations similar to the abundance of bots and studios in the current public chain ecosystem. The market has expectations for sustainable profits in the perpetual contract DEX sector, and if those expectations are not met, the token price will plummet rapidly.

Since it is not possible to efficiently attract users to migrate through trading incentives, enhancing user experience and lowering entry barriers seems to be a feasible direction. After all, users who can operate DApps account for only a small portion of the entire cryptocurrency user base. If we can attract users from centralized exchanges, that would also be a good option.

The recently popular field of robotic trading is a typical example. By using front-end instant messaging software and a custodial model, it has greatly improved the user experience of DEX, lowered the barriers to entry, and helped ordinary users participate in small-cap token trading. A well-known robot can maintain 3,000 daily active users stably without issuing tokens.

However, the robot trading track is currently mainly focused on meme coins and low market cap token trading. These tokens have shorter trading cycles and place more emphasis on early information advantages, where centralized exchanges have a natural disadvantage. In terms of contract trading for mainstream tokens, decentralized platforms do not have a significant advantage over centralized exchanges.

In addition to robots, the improvement of the usability of decentralized wallets is also a direction worth looking forward to. For example, improving the trading experience through the account abstraction wallet model. However, this will not be a process that is completed quickly.

Overall, the perpetual contract DEX sector is currently facing a bottleneck in user growth, with a significant reliance on incentives in trading volume. The main issues include the inefficiency of growth tactics, which cannot simply exchange money for real user growth, and the difficulty in quickly lowering user experience and entry barriers. In the future, as infrastructure such as bots and account abstraction wallets are improved, these issues may be alleviated to some extent.

It is worth noting that, based on the current development of the robot track, the returns at the infrastructure level may not necessarily be higher than those of consumer-facing service layers. In the context of homogeneous basic mechanisms, providing good user services and operations may yield greater returns. This has also been reflected in the development history of traditional perpetual contract exchanges, where the ultimate winners are often the platforms that excel in user experience and service.