Behold... The DeFi-Native Funding Table!

Over the past several cycles, it has become commonplace for traders to reference funding rates when claiming the market is overheated or under bought. Funding tables like the one above would often be posted on Twitter as influencers announced they were knife catching or local top selling.

dYdX is the only DEX that appears on these tables, with CEXs such as Binance, OKX, and Bybit acting as the focal point. As the decentralized perps ecosystem has continued to mature, it is now possible to create our very own funding table made up entirely of DEXs.

DEXs still make up only a small fraction of total perps volume, but it is pretty cool that we can do this now. This table can allow traders to monitor funding rate arbitrage opportunities and to more regularly incorporate DEXs into their trading lifestyle.

Let’s hope we see some of these circulating Twitter/X throughout the next cycle.

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Looking at the DEX chart, the rates are all over the place. Why are they not more aligned?

Good question. The main reasons are subtle design/calculation differences, and the adolescence of the protocols (excl. dYdX).

Synthetix perps funding rate hinges on the velocity of the rate of change, meaning the funding rate continuously drifts higher/lower in the face of sustained imbalances, settling upon correction. This could theoretically result in the funding rate settling on a non-zero value, which could be pretty cool for crypto native stuff like pegged asset markets, rebase tokens, or other degen type stuff. GMX funding rate so far seems to remain much tighter, but is supplemented by an hourly borrow fee.

Funding rates for the oracle model are a relatively new idea, with Synthetix being live for ~6 months and GMX v2 being live for a few weeks. The designs are new and the footprint of these DEXs is much smaller than CEXs, so the funding rates are much more sensitive. DeFi derivatives are generally pretty immature at this point, and we see widespread mispricing in DeFi options as well.

The bright side to this is it could be a relatively sustainable source of yield for a while.

I was going to ask the same thing! Aevo and Synthetix are miles apart.