Loss leader markets


Loss leader markets is something Binance has got absolutely right. On Binance spot there are currently 14 markets with zero trading fees on spot. This attracts traders and market makers alike and keeps users with Binance as they then expore the rest of the markets and market types.

Currently, there is no one doing zero trading fees for a perpetual market anywhere that I’m aware of. Making one or more of the perpetuals on DYDX zero fee would be an industry first and I’m sure it would be great for the ecosystem and the liquidity and trading volume of the exchange overall.

Cordialement, Tresgard

1 Like

This is being attempted on Osmosis with some pools right now.

It does not attract sufficient healthy liquidity though which is scaleable…
On a CEX with an orderbook it works, with liquidity pools it becomes a lot harder.

1 Like

…but V4 dydx is a full orderbook model, not liquidity pools?

1 Like

Free trading could attract traders engaging in high-frequency trading (HFT) or spoofing. Placing and canceling orders rapidly to manipulate prices. This could harm the integrity and stability of the market?

For hft companies giving all incentives it’s free trading right now with some exposure to dydx token price

HFTs create market stability by adding liquidity - with v4’s limit order rebate HFTs have already been incentivised.

When you create zero fee markets you attract joe public away from the centralised exchanges where they’re not even allowed to trade derivitives anyway.

I’m not suggesting all markets be zero fee, just a select few to attract traders.

A better start would be to at least lower the taker fees here. They are very high. Higher even than v3. The perps DEX market is competitive and new comers are catching up fast! For example Vertex taker fees are a flat 0.02% - more than hlaf what they are on v4.

FWIW, I think the existing fee structure is actually very good - the maker rebate is a necessity for attracting liquidity.


I was more referring to the fact that 0% markets in general are not healthy, since they do not generate any profits for a platform ^^

Your comment that no-one is done 0-fee-perpetual trading is interesting though, since it might indeed attract people to those specific assets who might stick around for other assets as well, just because they are already on dYdX.

1 Like