Zeta Markets ($TBA) - The Fastest CLOB Based Perp Dex in Defi
EVMs using the SVM stack? Not surprising. Its the reason Zeta chose Solana in the first place: Insanely fast settlement, almost zero cost transactions and 400ms latency. DEXs becoming CEXs 🚜
THE DIRTY SCORE: Beside each section / important metric I place a (score in brackets). Ranked from 1 - 5 ~ the higher the better. At the end of the report I display the scorecard with an overall average from each of the sections. No weighting to any specific sections.
In crypto everything is a meme, so don’t get too caught up on one section
NARRATIVES: Solana, Derivatives, Real Yield, Mobile (4.5)
CHAINS: SOL (EVM via Metamask Snaps)
PREFACE:
Zeta Markets aims to be the premier on-chain trading platform for retail and institutional web3 adoption. They were the 2021 Solana Hackathon winners, which Dirt loves. And after launching in January 2022 as an options protocol they have since pivoted to perps. This is a wise move and it’s also an opportunistic one: as current defi enjoyers prefer perp applications. But knowing the team is capable of expanding back into options is certainly attractive.
Why should you care?
Because Solana is fockin exciting and derivates protocols are great bets when it comes to bull markets and long-term conviction plays. Competition for volume is as difficult now as it has been in years. But that is why we are here. To find great teams, with great fundamentals, that are building great products no matter the market conditions.
So without further adieu… Zeta 🫡
Oh, but wait! Zeta Markets is the official sponsor of The Dirty Diggler. That is right my friends. With an options past and a perpetual future (eh eh pun intended), this team is building a premier Solana Exchange and Dirt is happy to be along for the ride. Zeta continues to impress me one feature at a time. With no token (yet) and V3 on the horizon, it’s more than enough to get excited about!
Check out Zeta’s recent post where they showcase how easy it is for users to trade from EVM via metamask through the Solflare wallet! Or check it out for yourself! → www.zeta.markets
TOKENOMICS: (4)
While there is no token to analyze presently there are some important facts for consideration. For starters, the team and investors will have long vesting periods ensuring that the supply dynamics are favourable for the community. And these periods do not start until the token launches. Second, the team is launching a rewards campaign to help align protocol incentives. It is apparent that ensuring the token is effective from the outset is a top priority.
Now, it’s of no surprise that the team wishes to keep most tokenomics details hush-hush, but here are some things I can tell you:
Staking mechanisms will be available from launch.
Novel trading mechanisms that utilize the Zeta token will be an integral part of the trading experience.
I’ve spent a good deal of time speaking with the team and am very confident in their ability to launch a solid token. Especially with the amount of community feedback they accept.
MECHANICS: (4)
Composability: Zeta Markets has an accessible ABI solution for clients to use and plans to continue agnostically building.
End Game: An all encompassing trading experience where the user doesn’t fret chains they only worry about what trade to take.
Zeta is quite literally the fastest fully on-chain CLOB exchange in existence
What it do? =
Perp DEX: Key features of Zeta's decentralized exchange include:
Trades are margined with USDC ~ allowing full user custody of assets
Up to 20x leverage available
On-chain central limit order book for better pricing and execution compared to automated market makers
Employs both Pyth & Chainlink oracles
Zeta operates a Solana validator node using the Jito-Solana client software. By running a validator infrastructure with excellent performance, Zeta contributes to Solana's decentralization.
Options:
Zeta was created as an options exchange and will likely restart these operations in the future
Want to know in greater detail? Read the docs here!
FINANCIALS: (4)
Zeta Markets raised $8.5m in Dec 2021 and has 3 years left of runway. I have spoken to a fair amount of teams in Defi and this is pretty dang good. Combine that with the fact that the team runs very lean and it begins to paint a lovely picture.
Fees:
Zeta earned a good deal of fees during 2022 when they were still operating as an options dex
Taker Fees: 0.10% + Maker fees: 0%
GROWTH: (4)
Understanding Zeta’s growth requires a little digging, as Defi Llama still reports the dex as an options protocol. Thus it shows that the TVL has been in a slow decline since June 2022 from a high of $15m down to $970k. But this is due to switching from an options vault to a perp dex. So this is misleading.
Being that Zeta is a perp, it is far better to judge based on volume. Zeta is doing between $150-300k daily with over $5M in the last 30 days. Volumes are on a bit of a decline but that is across the board. Defi volumes in crypto are near 2021 lows.
BUT cheer up buttercup, there’s light at the end of the tunnel. Zeta is launching upgraded trading features and has much on the horizon. Keep reading! 👇
NOTE: It is rare to find a team so committed to raising the bar for their protocol over and over again, while involving their community each step of the way. And further to the point, a team that is committed to doing it in a safe manner. Props guys, props.
ROADMAP: (4.5)
A pretty exciting roadmap ahead:
Incentive Program incoming!
UI/UX:
Stop Losses & Take Profits have been added this week 🔥
The discussion for trading pair additions is well underway, expect a good mix of popular EVM tokens and meme coins for your trading pleasure
Improved order functionality and additional chart tooling
Token confirmed 🫡
V3 specifics are still under wraps, but the idea is to make Zeta competitive with CEXs in performance terms, as well as opening up the funnel to users from any chain.
Mobile to become the focus post-V3Â
NOTE: The referral system is still operating but is unavailable with the updated UI, this will be added shortly.
TEAM / COMMUNITY: (5)
The Zeta Markets team has a background in High-Frequency Trading (HFT) and originated as a group of friends. They made their foray into Solana by participating in a hackathon where they built an options platform which as I mentioned they won. From there they expanded outward into perps.
They now aim to push the boundaries of what a DeFi derivatives exchange can achieve by bridging the gap between centralized finance (CeFi) and DeFi.
The community is vibrant and it is always a pleasure to be in the chats discussing crypto and getting even more bullish on Solana (NFA/DYOR)… so come check it out → here.
ECOSYSTEM / PARTNERSHIPS: (4.5)
Mad Lads NFT: Mad Wars Trading Competition already concluded in early August, but the team has plans to hold another competition before the year ends
Pyth & Chainlink: Primary & Secondary Oracle for price feeds
TradingView: Seamless chart integration
Serum: Orderbook & Matching Engine
Solflare & Metamask: Snaps, a newly shipped feature allows trading from EVM easily!
The team may launch notifications with Notifi (TBD) and do x-chain bridging possibly with DeBridge 🚜
COMPETITION: (3.5)
Competition in Solana for Perpetual exchanges is pretty straightforward. You’ve got the old first mover (& exploited) Mango, the new (& exploited) Cypher, and the most refined (& ex-imploded) Drift.
This OG Solana exchange suffered an intricate cross-trade exploit that resulted in an eventual loss of $110m. Their TVL dropped off a cliff but has started getting users again since June 2023, with a TVL now standing at $1.44m ~ they’re down, but not out!
Cypher suffered an exploit a couple of months ago and has decided to fast-track an IDO as a means of raising funds. It should be noted that the hack resulted in a loss of just around $1m and came at a time when they were experiencing high growth, tisk tisk. The team is playing defense now!
NOTE: Will be hosting a podcast with the Cypher team to discuss the hack, the tokenomics changes and the best path forward 🫡
Drift offers spot & perpetual futures trading. Users can also invest in insurance funds vaults with a decent APR of 7-9%. TVL has been popping since the launching of Drift V2 in December 2022. The exchange also offers a lot more trading pairs (16). They are the competition for sure.
During the Luna meltdown in May 2022, Drift suffered from a vulnerability. This is the summary:
Unconstrained withdrawals combined with unchecked leverage and accounting issues resulted in the drainage of the insurance fund ($4M) and users’ funds ($15m) during severe long-short imbalances. A lack of safety mechanisms forced the protocol to shut down. The additional losses were covered in an emergency raise. Drift has managed to recover exceptionally well.
A full breakdown of events is here → Link
I did not include the Hxro Network because they are infrastructure and their protocols built on top aren’t quite ready for contention (granted Nolobot has some impressive stats). Don't let that fool you though, I suggest checking out Hxro here:
SAFETY: (4)
Zeta Markets was audited by Kudelski back in August 2022, no active bug bounty but they are proceeding with caution. A few months back I was querying the team about the slow release of products, comparing them to Cypher… and you know what happened there. So Dirt has changed his tune and applauds teams for building ‘cautiously’… steady as she goes lads.
The smart contract code is not open source. There is however an ABI that allows clients to talk to and compose with Zeta permissionlessly. Â
NOTE: Zeta Markets are the only perp dex on Solana that hasn’t been hacked or lost customers funds🔥
BULLISH: (5)
The team is consistently querying its users/community to improve the protocol
Reported 3 years of runway… team has been managing funds very well through this bear market!
Solana infrastructure:
Near-zero trading fees and speed-of-light trade settlement/finality.
Partnerships with teams like Mad Lads are much appreciated and should continue.
Updated UI shows how much the DEX has improved in speed and execution
Token Launch confirmation
If you are not already trading, I (NFA) recommend you to start exploring.
Derivative trading will always attract users & volume, simply need to align incentives for them to stick around.
A newly released feature between Solflare and Metamask will attract more users and tap EVM markets.
Very impressive VC backing… which I’ve learned not to overvalue.
Mobile on the roadmap
BEARISH: (4)
5 trading pairs currently → though pairs are en route
Closed options business - Ribbon & PsyOptions
However, this was due to PMF & user adoption in perps. So it was a strategic pivot.
The team does plan to re-launch options after the perp dex is complete. These boys have an extensive background in options so I would not count them out.
Lack a bit of publicly available finances → but this is pretty commonplace for new teams. Expect more information as the protocol matures.
Keep cards close to the chest.
CONCLUSION: (4.25)
Zeta Markets has set the stage to become a premier derivatives platform. Their new V2 shows a lot of potential and is a great backbone for their protocol to grow.
Of all the communities I frequent, Zeta is at the top. It’s not just a fast (AF) execution environment, it’s a community of builders & traders with a plethora of industry experience. And that is why I am so honored to have them as The Dirty Diggler’s sponsor.
There is so much to get excited about on their roadmap and I look forward to covering it into the foreseeable future.
Oh yeah, don’t forget they’re the fastest on-chain CLOB-based Perpetuals Exchange and I challenge anyone to dispute that.
So do yourself a favor and start trading today → https://www.zeta.markets/
Stay Dirty
Nothing in this report should be misconstrued as financial advice. Any investments should be taken at the sole discretion of the reader and/or counterparty. DYOR
DISCLAIMER: The following tools are used to conduct much of my research: Block Explorers, Protocol Analytics, Dune, Github, Defi Llama, Token Terminal, Debank, Nansen, Messari, DApp Radar, Flipside, Twitter & Token Unlocks.
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