Written by: 0xResearcher

Mature Models and Limitations of Traditional Financial Platforms

In the traditional financial sector, platforms like Robinhood, IG, and Plus 500 have brought leveraged trading, options derivatives, and multi-asset investments to retail investors. Their advantages lie in good user experience, strong compliance, and clear product design, allowing retail and some professional investors to easily access markets such as stocks, forex, and commodities. The market performance of traditional platforms demonstrates their maturity: IG Group was established in 1974, holds 8 primary regulatory licenses, and offers over 19,537 tradable instruments; Plus 500 was founded in 2008, publicly listed on the London Stock Exchange, and provides over 2,800 leveraged CFD tools. These platforms have gained the trust of millions of users through a comprehensive regulatory compliance system and user-friendly interface design.

However, these platforms still face deep-seated structural limitations: centralized risks manifest as single point of failure risks and platform bankruptcy risks, with user funds entirely dependent on the platform's solvency; insufficient transparency is reflected in the opacity of order book operations, price discovery mechanisms, and risk management strategies to users; custodial restrictions require users to deposit funds into accounts controlled by the platform, losing direct control over their assets; regional regulatory barriers prevent global users from equally accessing financial services, with users in different regions facing differentiated product restrictions; high compliance costs are ultimately passed on to users, resulting in higher trading fees and stricter entry thresholds. Additionally, the clearing mechanisms of traditional platforms often experience delays, potentially leading to liquidity crises under extreme market conditions.

More importantly, RWAs are eroding the traditional financial sector and platforms: RWAs are at the best opportunity for on-chain financial development. Despite a clearer regulatory environment and improving infrastructure, the entire RWA market remains primarily in the "tokenization" stage, with very limited services and asset types available for market participants. Traditional financial infrastructure has structural barriers, including leverage restrictions, limited asset availability, high costs, and slow settlement and liquidity issues, but these problems create significant space for innovative solutions for on-chain leveraged trading in Web 3.

Innovative Advantages and Challenges of Web 3 Leveraged Trading

Looking at it from another angle, attempting to create similar leveraged trading platforms in the Web 3 world presents different advantages and challenges. First, on-chain financial systems can achieve automated matching and clearing through smart contracts, reducing human intervention and opaque processes; second, user funds are fully self-custodied, with trading settlements occurring entirely on-chain, reducing reliance on platform trust. However, Web 3 platforms must address issues such as insufficient liquidity, compliance, and price oracle risks to truly support large-scale trading. DeFi trading data for 2025 shows a significant growth trend: the average weekly trading volume of decentralized exchanges reached $18.6 billion in the second quarter of 2025, a year-on-year increase of 33%. Among them, Uniswap leads with a weekly trading volume of $6.7 billion and over 6.3 million active traders; Curve Finance achieves a stable weekly trading volume of $1.5 billion due to its advantages in stablecoin trading; while GMX, focusing on perpetual contracts, contributed $1.1 billion in weekly trading volume on Arbitrum and Avalanche.

Liquid staking protocols account for 27% of the total locked value in DeFi, becoming the largest DeFi category, with Lido managing $34.8 billion in TVL alone. This indicates that the DeFi ecosystem has developed the infrastructure to support large-scale leveraged trading. Cross-chain DeFi activities grew by 52% in 2025, thanks to the maturity of Layer-2 solutions, with Optimism's TVL increasing from $2.3 billion in 2024 to $5.6 billion, and Base, as Coinbase's Layer-2, reaching $2.2 billion in TVL. The landscape of mainstream Web 3 leveraged trading platforms has begun to take shape: dYdX leads with its professional trading experience and coverage of over 200 markets; Hyperliquid, as an emerging platform, occupies over 80% of the decentralized perpetual contract market; GMX has established a strong position in the Arbitrum ecosystem with its innovative multi-asset liquidity pool model; Drift offers leveraged trading across 40+ markets in the Solana ecosystem; while platforms like ApeX Pro and MUX Protocol have also found their niches in specific segments. Technically, Web 3 platforms have unique advantages over traditional platforms: transparency - all trading data and smart contract code can be publicly verified; self-custody - users do not need to entrust their funds to third parties; composability - can seamlessly integrate with other DeFi protocols; globally accessible - not restricted by geography, any user with a wallet can participate.

Analysis of Mainstream Web 3 Leveraged Trading Platforms

1. dYdX: Professional Decentralized Exchange

dYdX offers over 200 markets with up to 50x leverage, with a cumulative trading volume exceeding $200 billion. The platform upgraded to version 4 in 2024, introducing the Cosmos-based dYdX Chain, featuring a fully decentralized on-chain order book and matching engine. It employs a tiered fee structure, waiving trading fees for users with a 30-day trading volume below $100,000, effectively attracting a large number of professional traders.

2. GMX: Innovator of Multi-Asset Liquidity Pools

GMX has a cumulative trading volume exceeding $235 billion and over 669,000 users, making it one of the largest decentralized exchanges on Arbitrum and Avalanche. Its unique GLP multi-asset liquidity pool model allows users to trade mainstream cryptocurrencies like BTC, ETH, and AVAX directly, with up to 100x leverage. GMX's innovation lies in its revenue-sharing mechanism, distributing most trading fees to token stakers, providing GMX token holders with annualized returns of up to 12%.

3. Hyperliquid: Emerging Market Leader

Hyperliquid has become the leader in decentralized perpetual contract trading, capturing over 80% of the market share. The platform offers 50x leveraged trading on over 150 crypto assets, with sub-second trade execution speed, showcasing the technological potential of the next generation of decentralized exchanges.

4. Avantis: Pioneer of Multi-Asset Synthetic Trading

Avantis represents an important attempt for Web 3 leveraged trading platforms to expand into traditional financial assets. The platform supports synthetic leveraged trading of cryptocurrencies, forex, and commodities, offering up to 500x leverage, allowing users to trade various assets like yen, gold, and bitcoin using USDC as a unified collateral. Its unique loss rebate mechanism and positive slippage design provide traders with risk mitigation tools not available in traditional DEXs. Since its launch on the Base mainnet in February 2024, the platform has attracted over 2,000 traders, completing $100 million in trading volume.

Avantis identifies different risk preference characteristics by segmenting the RWA market participants and proposes three targeted growth strategies. For risk-averse users, it launched LP funding pools to provide stable returns (currently around 15% APY, significantly higher than U.S. Treasury bonds); for risk-tolerant users, it developed an RWA perpetual trading engine to support leveraged trading, creating an optimized liquidity environment using synthetic RWAs; for users lacking global asset investment channels, it built an on-chain U.S. stock futures market as a new entry point.

Multi-Asset Synthetic Leveraged Trading: Technological Breakthroughs and Market Opportunities

Therefore, a truly valuable innovation direction is to combine the mature experience of traditional leveraged trading platforms with the transparency and capital efficiency of Web 3. For example, supporting leveraged trading of BTC, ETH, and forex, gold, and other multi-assets through on-chain protocols allows crypto-native capital to not only participate in the crypto market but also connect with real-world assets, gaining richer investment opportunities.

The technological architecture of synthetic asset trading is becoming a key path to meet this demand. Through oracle technology, decentralized trading platforms can reflect the prices of traditional financial assets such as forex, commodities, and stock indices in on-chain contracts, allowing users to hold cryptocurrencies as collateral to gain leveraged exposure to these assets. This model avoids the complex asset tokenization process while maintaining the decentralized nature of trading.

Taking Avantis as an example, the platform supports synthetic trading of assets like yen, euro, gold, and oil through the price feedback systems of Chainlink and Pyth Network. Users can use USDC as unified collateral to express their investment views on global macro assets on a single platform. This design reduces users' learning costs and improves capital efficiency.

Innovations in risk management mechanisms are also an important feature of multi-asset leveraged trading platforms. Unlike traditional forced liquidation models, the new generation of platforms is beginning to adopt mechanisms such as dynamic adjustments, partial liquidations, and incentive hedging. For example, when a trader's actions help balance the platform's overall risk exposure, the system may offer trading fee rebates or better execution prices, protecting liquidity providers while creating additional arbitrage opportunities for traders.

Improving capital efficiency is another key advantage of multi-asset trading models. In traditional models, trading different asset classes requires opening accounts on multiple platforms, with funds being dispersed and locked. The synthetic asset model allows users to support leveraged trading of multiple assets with the same collateral, significantly increasing capital utilization. At the same time, liquidity providers can also benefit from more diversified trading fee income.

From a technological development trend perspective, multi-asset synthetic leveraged trading represents an important direction for the integration of DeFi and traditional finance. With the maturity of oracle technology, the proliferation of Layer 2 scaling solutions, and the improvement of regulatory frameworks, this model is expected to gain broader adoption in the coming years.

Precise Targeting: Market Barometer and New Opportunities for Profit

In 2025, the average weekly trading volume of decentralized exchanges was $18.6 billion, with perpetual contract DEXs like GMX contributing $1.1 billion in weekly trading volume. This indicates that Web 3 leveraged trading platforms are gaining significant market share. Breakthroughs at the technical level include: Layer 2 scaling solutions - Optimism's TVL grew from $2.3 billion in 2024 to $5.6 billion in 2025, more than doubling; cross-chain interoperability - cross-chain DeFi activities grew by 52% in 2025, driven by Layer-2 solutions and blockchain bridges. In terms of user experience optimization, the usage of mobile DeFi wallets increased by 45% in 2025, accounting for 58% of total users; new user registrations grew by 29%, thanks to gasless transactions and improved user experience. This indicates that Web 3 platforms are narrowing the gap with traditional platforms in terms of user experience.

As countries improve their regulatory frameworks for digital assets, Web 3 leveraged trading platforms are facing clearer compliance pathways. Currently, DeFi is actively used in over 110 countries, with Generation Z (ages 18-25) accounting for 38% of first-time DeFi wallet users, indicating strong growth potential.

Breaking Boundaries, Reshaping Value — The Deep Logic of Integrated Development

Web 3 leveraged trading platforms are at a critical development juncture. By learning from the successful experiences of traditional financial platforms while leveraging the unique advantages of decentralized technology, this field is expected to achieve breakthrough development. The exploration of innovative models such as multi-asset synthetic leveraged trading indicates that the integration path of "the mature experience of traditional leveraged trading platforms + the transparency and capital efficiency of Web 3" is feasible. As technology continues to mature, user experience improves, and the regulatory environment becomes clearer, Web 3 leveraged trading platforms are expected to gain a larger market share in the coming years. According to research by Grand View Research, the DeFi market is expected to grow at a compound annual growth rate of approximately 53.7% between 2025 and 2030, with the market size exceeding $231 billion by 2030. This provides ample space for the development of Web 3 leveraged trading platforms.

Ultimately, successful Web 3 leveraged trading platforms will be those that can provide products with user experiences comparable to or even superior to traditional platforms while maintaining the core advantages of decentralization. Whether through multi-asset synthetic trading, innovative risk management mechanisms, or improved user interface design, these technological innovations and product optimizations pave the way for the maturity of Web 3 financial infrastructure. The integration path of "the mature experience of traditional platforms + the transparency and capital efficiency of Web 3" is feasible. As technology continues to mature, user experience improves, and the regulatory environment becomes clearer, Web 3 leveraged trading platforms are expected to gain a larger market share in the coming years.

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