Financial Intelligence Report Epoch 21

Treasury
1

Considered.Finance presents the financial intelligence report for epoch 21. The community should find this a useful reference into the financial position of the DAO as well as an onboarding into the treasury structure and workings. The intention is to help create debate and ideas around DYDX financial matters.

Financial Intelligence Report Epoch 21

Key Takeaways:

The positive momentum from the past few epochs subsided epoch 21 with volumes decreasing 18% to $31.1B. This is still higher than any epoch since epoch 12 though.

12 markets volumes increased while 25 decreased. BTC volumes decreased 6% and ETH by 23% from epoch 20.

Despite the reduced trading activity open interest increased 17% to $318m. On average positions were turned 98 times in epoch 21 implying an average holding period of 7 hours.

Trading rewards were reduced by 1.29m (45%) in epoch 21. This brought total expenses down to 2 732 877 DYDX for rewards worth $6.5m at closing prices.

The dollar value of the treasuries decreased by 3% from $902.5m to $875.6m due to market moves.

Current treasury runway is 125 epochs (9.6 years) at current spending rates.

Token liquidity in DeFi sits around $4.5mm on AMM’s however trading activity has dropped significantly.

Since the previous edition we’ve added a new section on open interest and how often it turns over per epoch the community might find interesting.

image
image1200×742 69.2 KB

As always feedback, suggestions and discussion is encouraged.

4 Likes
2

Thank you @0xCLR, we appreciate your insights. Please keep them coming.
Is Reverie a DYDX Trading Inc subsidiary?

image
image768×423 66.4 KB

3

I can’t speak for other entities, but to my knowledge there is no connection between Reverie and dYdX Trading.

Separately, looking at this now, this table needs a link to the proposal approving each expense which will be added in future.

4

Thank you for responding. Because the Reverie entity has a sizable monthly budget, we asked. Is there a bonus for publishing the DAO playbook?

5

Is Reverie a DYDX Trading Inc subsidiary?

We all have this question

6

Yes, here is the link to the proposal:

7

Thanks @0xCLR for consistently sharing these financial intelligence reports to summarise the protocol’s monthly activity.

I have some suggestions perhaps moving forward:

  • As this is very similar to the monthly reports shared by the Foundation, perhaps the data reflected here can highlight some of the perspectives on the implications for these stats

Eg has trading volume and OI been falling and some considerations the protocol should note, some value added framework that the community can think about wrt to these numbers.

  • More stats that are able to accentuate dYdX’s relative position in the perps dex landscape, and is this in line with general market sentiment

  • Protocol Revenue - Protocol Rewards => how is dYdX faring financially?

  • Other metrics that can be referenced from Messari quarterly reports

Just a ref, I worked on these ideas in the past with the weekly/monthly reports last year.
Samples for my previous reports (mind the various designs as it was going through multiple iterations):

Happy to collaborate on creating these reports moving forward.

2 Likes
8

In addition, just curious, how was this holding period calculated? Looks interesting

2 Likes
9

Just to add on too, I was just spinning up some other Risk-related metrics such as

  • Funding Rates

Since the data is easily retrievable across exchanges.

YTD Funding Rate (8hr intervals)

BTC

Screenshot 2023-04-21 at 5.48.53 PM
Screenshot 2023-04-21 at 5.48.53 PM1084×528 109 KB

Most deviant out of the 4 exchanges 70.18% of the time

ETH

Screenshot 2023-04-21 at 5.49.08 PM
Screenshot 2023-04-21 at 5.49.08 PM1054×528 89 KB

Most deviant out of the 4 exchanges 71.99% of the time

** Anomalies observed: USDC Depeg

March 11, 2023 (0800), March 12, 2023 (0000), March 12, 2023(0800)

  • Size of Insurance Fund (potentially over time too)

Current size = $20,800,634.47

  • Perps DEX Landscape

Weekly Volume
dYdX = $8,709,943,301.90
GMX = $1,281,886,036.85

Weekly Fees
dYdX = $2,052,261.30
GMX = $2,967,152.25

– can be used to calculate protocol’s PnL over time

  • OI vs TVL

– IMO, its always a good way to see how over-leveraged dYdX is too, which can tie in nicely with insurance fund as a risk factor

  • Inflow/Outflow from Exchange

– The exchange witnessed noticeable forced withdrawals too during the depegs
– Net flows to the protocol

10

Thank you for the feedback @0xcchan. This is all very valuable and I’ll add into future editions.

The plan with this report is to keep gradually adding detail and more opinionated commentary and analysis of OI and its implications is definitely on the roadmap.

I like the idea of adding market share stats, possibly also against centralised exchanges given the stated ambition of dYdX.

On protocol revenue, DYDX makes no revenue in v3. This could change in v4. The most relevant metrics for current financial performance is the treasury runway and size. This will become more complex as more subDAO’s form increasing monthly expenses.

To keep the report focused on aspects affecting finances I think it would be better to report things like funding rates, etc. separately. Maybe an exception to look into going forward is a measure of the extent that funding arb adds to volume and fees.

Also, the report will be original and compiled from source data as much as possible. I don’t want to replicate what Messari is doing or rely on them for data. Ideally this report becomes the best for the specific audience of the DYDX community.

Lastly, the holding period is just the (number of times on average positions turned over the epoch)/(length of epoch). I ran it for individual markets too with some interesting results. SOL for example turned 45 times while BTC 120 times and CELO 475 times.

Thanks again for the useful feedback.

2 Likes