As the center of gravity in the virtual asset market shifts from spot to perpetual futures (futures contracts with no expiration date), competition among Perp DEXs (decentralized exchanges that trade perpetual futures) is intensifying. On Perp DEXs, traders can take long (buy) or short (sell) positions using leverage based on tokenized assets.
According to CoinGecko, a virtual asset data platform, on the 5th, last year's Perp DEX transaction volume surged 346% year over year to $6.7 trillion (about 9,831 trillion won). The perpetual futures trading volume at the top 10 centralized and decentralized exchanges reached $92.9 trillion (about 13,630 quadrillion won).
This trend extended to Korean investors. According to a report by Tiger Research, a domestic virtual asset research firm, funds that moved from Korea to overseas virtual asset exchanges last year are estimated at about 160 trillion won.
Paradex, a Perp DEX, said it will conduct a token generation event (TGE) for its native token "DIME" this month. Paradex was created by the Paradigm team, which acts as a liquidity provider in the virtual asset derivatives market.
Paradex is pursuing an institutional on-chain derivatives infrastructure, not a simple on-chain futures exchange. Messari, a global virtual asset research organization, describes Paradex as an on-chain perpetual futures exchange that puts privacy first and a Perp DEX that offers "zero" fees to retail investors.
Paradex's strength is a structure that is easy for institutions to use. The transparency of Blockchain transactions is an advantage for individuals, but for institutions that run large positions, it can be a weakness that increases the risk of "liquidation hunting." Because Blockchain transactions reveal, relatively clearly, the position size, collateral, and liquidation levels of large wallets, if an institution holds a large leveraged position, it can become a target for players seeking to exploit it.
For this reason, Paradex adopted a design that encrypts account and position information. It aims to minimize exposure of institutional position sizes and liquidation levels and, despite being a decentralized exchange (DEX), to deliver trade execution quality as fast as that of centralized exchanges (CEX).
Paradex removed trading fees for retail investors and offered tighter spreads to help maximize profit. It also introduced a separate risk management method instead of using automatic deleveraging (ADL), which unilaterally reduces profitable positions when the market suddenly shakes.
Since its mainnet launch in Feb. 2024, Paradex has recorded cumulative trading volume of about $25.18 billion (about 3.69517 trillion won), total value locked (TVL) of $160 million (about 234.7 billion won), open interest of about $550 million (about 807.1 billion won), and more than 70,000 cumulative sign-ups as of the 21st of this month. Recently, its daily trading volume at times topped $3 billion (about 4.401 trillion won).
Its market share over the past 30 days is around 1%, leaving a gap with leading Perp DEXs such as Hyperliquid. A Blockchain industry official said, "Paradex is one of the recently popular global Perp DEXs," adding, "As it aims to be an on-chain futures exchange that institutions can use and with the DIME launch ahead, now is a turning point to gauge its future path."