Rage Trade Attracts Users but Fails to Gain Volume Share

JAN 04, 2023 • 4 Min Read

Amey Dandawate Amey Dandawate

🌅 Welcome!

The U.S. Department of Justice is seizing Sam-Bankman Fried’s Robinhood shares. Elsewhere, Genesis tells clients that it needs more time to come up with a solution.

Today, we take a look at Rage Trade while our Research Team explores the role of Goldfinch Finance in bringing real-world assets to decentralized finance.

This is the Delphi Daily. Let’s dive in.

🚨 In Case You Missed It

  • The U.S. Department of Justice is seizing assets potentially linked to FTX, including Robinhood shares.
  • Genesis tells clients that it needs more time to come up with a solution. Withdrawals at the crypto lender are still suspended.
  • Coinbase agrees to pay $50M to regulators to settle charges that it didn’t conduct sufficient background checks.
  • Indonesia announces plan to launch a national crypto exchange in 2023.

📊 Rage Trade Attracts Users but Fails to Gain Volume Share

  • Over the past 7 days, Rage Trade has seen an average of 405 users, representing a user market share of 31% among the top 5 perpetual DEXs on Arbitrum.
  • Despite the bear market, the protocol has seen elevated interest from users since the beginning of October 2022. Currently, the DEX only offers an ETH perpetual product.
  • However, the typical ticket size for Rage Trade users is considerably smaller than others as the protocol does not even account for 1% of the volume market share.
  • In comparison, GMX has an average of 65% user market share over the past 7 days but 97% volume market share.
  • Rage Trade also offers delta-neutral vaults that provide liquidity to GMX. Since launching the vaults, TVL in Rage Trade has increased over 4x from $3.2M to $13.4M.

⚡ Real-World Assets in Decentralized Finance

  • From FinTech loans in Asia to smartphone financing in Africa, Goldfinch has originated over $120M in loans to date, of which about $100M are outstanding. However, loan growth has practically come to a standstill in the last few months.

  • Goldfinch’s loan rates have risen alongside the fed funds rate, indicating rising borrow costs on the platform. This could be a core contributor to slowing loan growth.
  • Given the platform’s current focus on emerging markets, loan demand also hinges on the state of local economies.

  • Backers and liquidity providers in Goldfinch have accumulated a total of $8.5M in net-interest gains since inception. There have been no writedowns (bad debt) so far.
  • Despite slowing loan origination, investors are still earning a comparable amount due to higher interest rates.
  • On top of the 0.5% withdrawal fee that investors are charged for redeeming their positions, Goldfinch also retains 10% of interest payments as protocol reserves.
  • Since inception, the protocol has generated nearly $1.5M of revenue. Revenue has been steady through H2 2022, which is vastly different from most DeFi protocols.
  • Goldfinch boasts a business model that, unlike most others, is not deeply intertwined with crypto markets and has the ability to be counter-cyclical. This is perhaps the largest advantage from a business standpoint.
  • Protocols like Goldfinch use public-ledger blockchains to enable businesses with historically low access to financing access to crypto capital that is always on the hunt for new yield. All of this can be done in an efficient and quick manner.
  • The large majority of Goldfinch’s loan exposure is in emerging market economies, which typically have a harder time accessing capital and financing compared to developed countries.
  • The platform’s cumulative loan book has performed well so far, but it’s important to note that, as always, this is not a risk-free endeavor.
  • For more on real world assets in decentralized finance, Delphi members can read our Delphi Pro report here.

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