Vertex Protocol is a hybrid orderbook/AMM DEX that launched on Arbitrum in April. It’s key differentiators are its low fees (0/3 bps) and unified cross-margin. The race for cross-margin is an emerging narrative in DeFi and could be the next big domino to fall for derivatives traction. Cross-margin presents a variety of risks and is difficult to implement on-chain.

 Vertex’ growth is impressive, generating over $1.2B in total volume in a little over a month. Notably, this growth comes the expense of GMX, which appears to be ceding its long time dominance of leverage trading on Arbitrum.

Similarly to other upstarts like Level and Kwenta, Vertex’ growth is aided by token incentives. Vertex Protocol’s token, VRTX, is not yet live, but can be earned by users who trade on the platform. Meanwhile, GMX remains an established model and strong example of organic volume.

While Vertex/Synthetix’ growth is partially due to incentives, both offer concrete improvements over the current GMX trading experience. In its current state, GMX appears to be lagging behind its competitors due to its higher fees, lack of cross-margin, and lack of risk management for LPs. GMX v2 is coming soon and has a very competitive feature stack.

It is still unclear if any of these DEXs will be able to challenge dYdX, which has remained in a class of its own since inception.