The world’s largest centralized crypto exchange, Binance, has big ambitions to power what could become the largest decentralized derivatives exchange as evidenced by its latest funding efforts.
Decentralized derivatives exchange Deri Protocol has secured investment under Binance Smart Chain’s $1 billion DeFi Growth Fund.
The fund was established by Binance to help DeFi projects that run on BSC to scale for mainstream adoption. It also aims to expand the BSC ecosystem as it only supports projects that run on the network.
In an announcement on Nov 9, Binance stated that the funding will come directly from its billion-dollar fund designed to incubate blockchain and crypto startups. Investment Director at the BSC Accelerator Fund, Gwendolyn Regina, said:
“BSC’s $1B Growth Fund solely focuses on projects with high utilization and scalability. Deri protocol with its cross-chain derivative features tops the list.”
DEX competition rising
BSC-based Deri Protocol offers decentralized derivatives trading and is a competitor to the dYdX derivatives exchange and potentially FTX, though the latter is centralized.
Deri is the first decentralized exchange (DEX) that provides both everlasting options and perpetual futures on BSC. Users can hedge, speculate, and arbitrage their portfolios, Binance stated.
Deri co-founder and CEO going by the pseudonym 0xAlpha said that with BSC’s support, “we aim to scale Deri for mass adoption.”
Deri trading positions are tokenized as NFTs which can be held, transferred, or imported into any other compatible DeFi projects. The protocol also runs on Polygon in addition to BSC.
Deri is currently a small fry compared to the major derivatives exchanges according to DefiLlama, TVL is just $24 million. The current 24 hours volume is just over $200 million according to the platform’s dashboard.
Comparatively, the dYdX derivatives DEX has just over $1 billion in total value locked with $3 billion in daily volume according to its stats dashboard.
Binance has secured its position as the world’s leading CEX at the moment, but it is clearly aiming to channel funding to support DEXs and DeFi protocols running on its own blockchain.
BSC ecosystem outlook
There is currently $21.5 billion in total value locked (TVL) across the entire BSC ecosystem according to DefiLlama. The PancakeSwap DEX has the largest market share with just under $7 billion in TVL or around 32% of the total.
The Venus lending and borrowing platform is in second place with a TVL of $2.8 billion, or 13% of the total. Deri accounts for just 1.1% of all the TVL on BSC.
BSC TVL has grown by 78% over the past three months and represents almost 8% of the $272 billion in TVL for the entire sector.