The Framework: Over Long Horizons - Free Wins In 2019, Schwab cut commissions/fees to $0 and td ameritrade/etrade matched within days; the fee model collapsed and flow migrated to the lowest all-in cost. What happened is (1) they compressed the entire industry's fee model and (2) over time, they captured the majority of flow. Why? Because over a long enough period of time people prefer free trading over fee tiers. This is the direction I believe we will move with regards to perp DEXs. So here we are today: a plethora of perp DEXs that are largely the same, with Hyperliquid at the top and many hoping to just be considered. If you assume traders prefer free over fee then you need to look for DEXs that can go zero fee while having a profitable business. How do you figure out which ones can actually run zero fees? The ones that can offer benign flow to MMs/HFTs. How do teams offer benign flow? Flow segmentation via RPI (retail price improvement) is a great option. I won’t go into...
11.33K
37
The content on this page is provided by third parties. Unless otherwise stated, OKX TR is not the author of the cited article(s) and does not claim any copyright in the materials. The content is provided for informational purposes only and does not represent the views of OKX TR. It is not intended to be an endorsement of any kind and should not be considered investment advice or a solicitation to buy or sell digital assets. To the extent generative AI is utilized to provide summaries or other information, such AI generated content may be inaccurate or inconsistent. Please read the linked article for more details and information. OKX TR is not responsible for content hosted on third party sites. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition.