Research Summary
The report discusses Voodoo, a new decentralized exchange (DEX) on Base Layer 2, which offers perpetual contracts with real yields exceeding 100% on Ethereum (ETH). The platform has seen significant growth, with over 3700 users and $18M in trading volume. Voodoo differentiates itself with unique incentives, community-focused tokenomics, and a two-token model similar to GMX.
Key Takeaways
Voodoo’s Rapid Growth
- Impressive Metrics: Voodoo, a new Perp DEX on Base Layer 2, has seen significant growth with over 3700 users and $18M in trading volume. The platform has also earned nearly $10k in total fees. This growth has been achieved even before the platform’s token has been launched.
Unique Features and Incentives
- Differentiating Factors: Voodoo offers unique incentives to create a flywheel effect, up to 100x leverage on both long and short positions, and 0% slippage on all trades. The platform also boasts community-focused tokenomics, with no private sale or venture capital involvement.
Token Structure and Rewards
- Two-Token Model: Voodoo follows a similar token structure as GMX with two tokens: VMX and VLP. VMX can be locked to get esVMX, which can be staked to earn rewards. VLP can be staked after depositing ETH or USDC to earn rewards. The platform also heavily incentivizes VMX-ETH liquidity providers.
Tokenomics and Value Accrual
- Buyback and Burn Mechanism: Voodoo uses 5% of platform revenue to purchase VMX from the open market and add as liquidity for the VMX-ETH trading pair. Another 5% of revenue goes to buy and burn VMX, decreasing circulating supply and offsetting inflationary pressure. VMX emissions are adjusted periodically to target a specific APY range.
Roadmap and Future Plans
- Upcoming Developments: Voodoo plans to offer 100% APYs on ETH-USDC based on real yield alone after its initial DEX offering (IDO). The platform also plans to heavily incentivize the VMX-ETH trading pair, aiming to create a deep market for the token.
Actionable Insights
- Monitor Voodoo’s Growth: Given the rapid growth of Voodoo, it may be beneficial to keep an eye on the platform’s development and user adoption.
- Understand Voodoo’s Tokenomics: Voodoo’s unique tokenomics and incentive structure could provide interesting insights for those interested in decentralized finance (DeFi) and yield farming strategies.
- Research the Potential of Perp DEXs: As Voodoo aims to capture the growth in the perpetuals market on Base Layer 2, it could be worthwhile to explore the potential of other Perp DEXs in the market.
