Guest: Justin, Co-founder of StandX
Interview: momo, ChainCatcher

Following the explosive success of Aster, another project founded by the former Binance futures team, StandX, has also sparked FOMO across the internet. In less than a week, StandX's TVL grew fourfold, surpassing $140 million.

StandX was co-founded at the end of last year by AG, a core member of the former Binance futures team, along with Justin and AC, a senior trading system technology leader from Goldman Sachs. AG and Justin were deeply involved in building Binance's futures from the ground up; AC has extensive experience in liquidity engine development at Goldman Sachs and on-chain trading management at Amber Group.

Their six years of experience in developing Binance's futures taught them the most important lesson: to be bold enough to be the "first to eat the crab." Just as Binance was the first to launch a forward contract when the industry was predominantly using inverse contracts, ultimately driving a paradigm shift in the entire industry, StandX also aims to carve out a differentiated path in the current competition among Perps DEXs.

Justin stated that unlike most contract DEXs on the market that have highly similar code, StandX's product is independently developed from the user interface to the underlying architecture, offering significant differentiation in functionality and visual experience. "We always believe that there is room for optimization in previous solutions; the key is how to make it more reasonable for users."

The core mechanism of StandX lies in using its self-developed interest-bearing stablecoin DUSD as collateral, creating a dual revenue model of "trading profits + collateral interest income" for users, along with greater arbitrage opportunities. After nearly a year of refinement, StandX's Perps DEX testnet will soon be open to users.

Despite the strong momentum shown by projects like Aster and Hyperliquid, Justin believes that the competitive landscape of DEXs will closely mirror the development path of CEXs, with leadership changes likely becoming the norm. The key to success will not rely on a single killer feature but on continuously making the right decisions in long-term competition and gradually building a leading advantage.

From Zero to Industry Leader: Core Insights from Developing Binance Futures

1. ChainCatcher: Can you share your core career experience? What key projects or achievements were you responsible for during your time in the Binance futures team?

Justin: I initially worked in the traditional financial derivatives field. I started getting involved in the crypto space in 2015, and by 2019, Binance's futures business was in its infancy. CZ wanted to find a team with derivatives experience to take charge, and he found AG (now the founder & CEO of StandX). AG had worked at the Chicago Mercantile Exchange for nearly a decade, and at that time, he invited me to join Binance to form a small team, where I was mainly responsible for growth.

During my six years in the Binance futures team, we built the futures business from scratch and also experimented with index contracts, leveraged tokens, copy trading, and other projects. The success of the futures business not only brought Binance a new product ecosystem and a larger market share but also allowed us to accumulate rich experience in the industry.

2. ChainCatcher: Why did you leave Binance to start your own venture, and why did you choose the Perps DEX track?

Justin: I thought about leaving to start my own venture for a long time last year. On one hand, we felt we had achieved our phased goals at Binance; on the other hand, we saw new opportunities. Decentralization has always been a major trend in the industry, and we wanted to enter the DeFi space, where futures and stablecoins are the two largest tracks.

From a business perspective, the stablecoin business is relatively simple, mainly involving resource holding and compliance issues. In contrast, the DEX futures business is much more complex, involving the underlying risk control system.

Our background and expertise align perfectly with this, so we felt we could achieve results in this area, which led us to decide to start our own venture, combining the futures and stablecoin tracks.

We subconsciously believed that the Perps DEX track would definitely explode. Uniswap, as a spot DEX, can achieve nearly 20% of CEX's trading volume, so there’s no reason why Perps DEXs can’t.

3. ChainCatcher: How has your experience in Binance's futures business influenced your current product development?

Justin: When we were working on the futures business at Binance, we emphasized the need to be bold in innovation. If you come in and just imitate others without the courage to improve, that won't work.

Back then, many exchanges like BitMEX, Huobi, and OKX were ahead of Binance in futures trading, and their products were quite similar, mainly competing on fees and liquidity. However, when we launched the futures business at Binance, every aspect—from product design and API to fee structures—was different from others. We faced significant pressure at launch, but we withstood it, and the results were excellent.

For example, at a time when other exchanges were offering inverse contracts, Binance was the first mainstream exchange to offer forward contracts. Why did everyone else stick to inverse contracts? Because BitMEX was the first to do futures trading, and at that time, there were no stablecoins, so mainstream assets had to be used as collateral. This inverse contract was a genius solution, and subsequent players followed BitMEX's model. However, we found it strange that as the scale of stablecoins grew and the market environment changed significantly, no one made a change.

We believed that forward contracts were easier for users to understand and switch to. Later market validation showed that forward contracts had a significant advantage over inverse contracts. Users do not need to prepare collateral separately for each asset and can directly use USDT to trade multiple assets, greatly enhancing the liquidity of smaller tokens. This allowed Binance to maintain a long-term lead in trading volume for smaller token futures and gradually pushed the industry towards a forward contract model.

We believe that competition among exchanges is long-term; only through continuous innovation and optimizing products around user needs can one establish a foothold in the market. Our independently developed futures DEX is a continuation of this innovative spirit.

What are the Core Selling Points of StandX?

4. ChainCatcher: How does this round of Perps DEX frenzy differ from the previous one? Why does this round, led by Hyperliquid, show stronger explosive potential compared to dYdX and GMX?

Justin: dYdX and GMX have not solved the usability issues of DEX products; their products are very user-unfriendly and provide a poor user experience.

They aim for complete decentralization, but this requires users to sign every transaction, which results in an extremely poor experience. Therefore, while these projects may attract temporary attention upon launch, from the perspective of users who trade frequently and contribute significant trading volume, they absolutely cannot tolerate such a product experience.

In this round, although Hyperliquid sacrifices a bit of complete decentralization, it excels in trading experience and addresses the long-standing usability issues of DEX products.

However, Hyperliquid's approach is not the first in the industry; Aster actually did it earlier. Hyperliquid's success also stems from their excellent TGE, which truly incentivized long-term trading users rather than just yield farmers. Overall, focusing on users is the most critical factor. Hyperliquid's success has also given us great confidence.

5. ChainCatcher: In the more than a year since you started your venture, what key businesses have you focused on? How large is your team now?

Justin: Our team has fewer than 10 people. In the early stages, we focused on launching the yield-bearing stablecoin product DUSD, and then we initiated the development of the futures DEX. Currently, the futures DEX has been in full development for four to five months, with almost the entire technical team dedicated to the independent development of this product, which will be launched soon.

Unlike most contract DEXs on the market that have highly similar code, our product is independently developed from the user interface to the underlying architecture, ensuring significant differentiation in functionality and visual experience.

6. ChainCatcher: I understand that many DEX product designs are intentionally made similar to CEXs to align with users' existing habits. How do you consider innovation in your design?

Justin: Many people are reluctant to try new designs because they worry that users are accustomed to existing models and fear that innovation may backfire. However, we always believe that there is room for optimization in previous solutions; the key is how to make it more reasonable for users.

For example, in our design, we place market information at the top and the trading execution area at the bottom to align the information hierarchy with users' reading and operational logic. Another example is the interactive animation of clicking order book prices to fill the order box; although it's a detail, smooth visual feedback can significantly enhance the operational experience. Our terminal mode also strives for refinement in animation and visual presentation.

As I mentioned earlier, our experience with Binance futures taught us that making continuous reasonable innovations from the user's perspective is essential for establishing a foothold in long-term competition.

7. ChainCatcher: Besides Hyperliquid, major CEXs like Binance and OKX are also pushing for the ecosystem of Perps DEXs. What is StandX's differentiation and core selling point? How do you stand out amidst the pressure from CEXs and Hyperliquid?

Justin: Our biggest selling point is that both the stablecoin and Perps DEX are completely self-developed. For ordinary users, using DUSD as collateral for trading not only allows them to earn profits from the trades themselves but also enjoy additional interest income from DUSD as an interest-bearing stablecoin, effectively enhancing trading profits.

DUSD can not only be used as trading collateral but also directly for contract pricing. For example, BTC contracts are no longer priced in USDT but in DUSD. This unique design will create price differentials in the market, providing arbitrage opportunities for professional investors. Additionally, we have also differentiated our handling of contract details from other platforms, further creating unique operational space for professional traders.

Our revenue model is similar to Ethena's USDe, with earnings primarily coming from contract funding rates. In a bear market, the annualized yield is about 3%–4%; in a bull market, the yield can significantly increase to 20%–30%, and even reach 80%–90% in a single day.

This means that during the most active trading periods and the fastest user growth in a bull market, trading contracts on StandX not only generates trading profits but also allows the collateral to bring an additional 20%–30% annualized yield, undoubtedly constituting an attractive differentiation advantage.

8. ChainCatcher: Can this revenue mechanism be sustained?

Justin: The yield from DUSD is sustainable and independent of StandX's own trading performance. Its mechanism is independent. The revenue comes from users using stablecoins like USDT to mint DUSD. When users mint DUSD, the USDT we receive will be deposited into a custodian (such as Ceffu), then mapped to the exchange, converted into assets like BTC, and executed with 100% hedging in the futures market.

In this process, the yield from DUSD primarily comes from the funding rates continuously paid by long contract users. As long as the funding rate mechanism in the contract market continues to operate, the source of DUSD's yield can remain stable. This mechanism has been validated by the market over the years and is sustainable.

DEX May Follow CEX's Competitive Path, Leadership Changes Become the Norm

9. ChainCatcher: Perps DEXs generally face skepticism regarding their decentralization, being questioned as CEXs in disguise. How do you view this market skepticism? How will you balance trading efficiency with decentralized security in the future?

Justin: The industry expects Uniswap's fully on-chain model, which locks and executes funds through smart contracts. However, due to the high complexity of contracts and the large number of transactions, this model can affect user experience.

Solutions like Hyperliquid choose to build their own blockchain, which may raise questions about the level of decentralization, but allows for independent control over on-chain TPS and execution rules, enabling deep customization.

We believe that the future development path should be gradual; decentralization itself is a dynamic process. If we demand perfect decentralized trading from the initial stage, it may require hundreds of millions of dollars in investment, which is unrealistic without a user and business foundation.

This is actually similar to product development; you cannot develop based on every user demand, or else the product will become bloated. As a product manager, you need to find a balance between decentralization and user experience.

A more feasible path is to start from a point that considers both, accumulating users while continuously advancing decentralized development. As revenue scales up, investments in on-chain node incentives and underlying chain performance can gradually increase, thereby steadily improving the level of decentralization while enhancing key metrics like TPS.

10. ChainCatcher: Recently, with the rise of Perps DEXs, StandX's TVL has surpassed $140 million. How do you consider the community incentive issues that users are concerned about?

Justin: Giving back to the community is core. So far, we have never conducted any financing. We feel that early VC involvement may not be particularly valuable. Moreover, the team has funded itself, leaving us with significant operational space. Without external investors, we do not face the pressure of investor sell-offs, which means we can return more benefits to the community. Our goal is to distribute tokens or rewards to true contributors and genuine trading users.

11. ChainCatcher: What is StandX's long-term vision? How do you view the ultimate landscape of the Perps DEX track?

Justin: The long-term goal is definitely to become the preferred choice for users seeking decentralized trading.

The competition in the DEX track has actually just begun. Currently, Hyperliquid's leading advantage is not as solid as Binance's position in the CEX field. Based on our experience at Binance, Hyperliquid's current development stage is roughly equivalent to Binance's rise in 2017, when Binance primarily penetrated the core English-speaking crypto community but still had a large untapped market.

More importantly, if we acknowledge that "trading is migrating from CEX to DEX" is a future trend, then this process has not truly started yet. Currently, the vast majority of users and trading volume are still concentrated in CEXs, which means the DEX track has enormous potential but also indicates that the competitive landscape is far from being established.

DEXs themselves also face many risks, and similar black swan events like the Mt. Gox incident could occur in the future. Therefore, the current leaders' positions are not secure, and frequent changes in the leading players in the future are entirely possible.

We firmly believe that DEXs align with the long-term direction of the decentralized spirit of cryptocurrencies. This track can accommodate numerous participants, and competition will be enduring and dynamic.

Looking back at Binance's development history, even during the explosive period in 2017, it did not immediately create an absolute gap with OKX and Huobi; the title of "the three major exchanges" lasted for quite some time. Binance did not win by relying on a single killer feature but gradually established a leading advantage by making a series of key decisions in ongoing competition.

The development path of DEXs is likely to follow this pattern, gradually establishing advantages through continuous optimization and strategic layout in long-term competition.

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