01 SRM Grant Proposal

Hi everyone,

I’m Stratos from 01 Exchange and I’m introducing a $SRM grant proposal that aims to incentivize increased liquidity and trading on top of Serum derivatives (perpetual futures)—a so far untapped market for Serum.

What’s 01 Exchange?

01 is the first derivatives exchange (perpetual futures and power perpetuals) composed over Serum, and that generates fees directly for Serum. 01 is capable of supporting up to 50 different collaterals, all cross-collateralized, and up to 100 different markets, all cross-margined. 01 is also the first to introduce orderbook-based power perpetuals into the crypto space.

Serum Spot vs Perps

Serum has undoubtedly built the most powerful spot liquidity engine across the entirety of DeFi, generating over $98M in spot volume alone just this last 24h. However, the Serum ecosystem is missing a huge derivatives market. In fact, FTX generates 5x more volume on their derivatives trading than their spot trading. The derivatives space is an incredibly large untapped market for Serum, and we hope to change that with our 01 Serum derivatives proposal.

01 Proposal

Our proposal’s goal is to tap into the large derivatives market by incentivizing and increasing liquidity and trading on 01’s Serum derivatives.

The proposal seeks to utilize 10m $SRM for LP emissions on top of a unique AMM model (similar to Raydium and Atrix’s for Serum spot) but on top of the 01 Serum Perpetuals orderbook—we call this AMM the ZAMM. Passive liquidity providers can stake and earn $SRM, while providing tighter spreads and deeper liquidity through automated xyk order placing directly on the book. This passive liquidity will also attract increased active liquidity through arbitrage opportunities.

That’s a pretty large grant request!

  • Any plans to open source your code?
  • Will this be +EV for serum or will it just lead to a load of arbitrage volume?

For context Atrix has been arbitraged quite aggressively lately and this doesn’t seem like a +EV outcome for the serum incentives they were provided with. Note that Atrix is almost entirely maker volume here and arbitrageurs on mango are almost entirely takers https://twitter.com/projectserum/status/1504328555001438211?s=21

1 Like

Yes, we want to open source our code. Working right now on getting more external audits.

This mechanism should actually bring a lot more liquidity to the exchange and create a lot tighter spreads.

Here is the on-chain proposal: