Hey folks, last week Zaros, one of Arbitrum’s newest perpetual DEXes launched their highly anticipated testnet, which roughly in 24 hours from time of writing, will start a trading competition that will help you earn Zaros points which will make you eligible to earn their token $ZRS upon its release.
What is Zaros?
I’ve written about Zaros in the past, but as a quick recap, Zaros is a new perpDEX on Arbitrum that seeks to incorporate liquid-restaked $ETH derivatives (LRTs), most notably $eETH (Ether.fi’s LRT) as part of their liquidity pool reservoir.
With currently more than $12 billion dollars worth of $ETH that’s being re-staked, for those that are holding onto liquid-re-staked derivates, Zaros offers the opportunity to earn additional yields on top of the already lucrative returns that $ETH re-stakers are currently earning , which according to their docs is 70% of the platform’s trading fees.
Increasing Capital Efficiency: In comparison to bigger TVL perpDEXes, chances are that there’s less utilization of the counter-party vault’s assets. In other words, you could have 100s of millions of dollars in liquidity held on the platform, yet only a fraction of it that probably gets used — a low utilization rate that results in smaller yields for liquidity suppliers. GMX for instance, who has one of the highest TVLs across all perpDEXes for all chains, has a Volume-to-TVL ratio of 0.18, meaning that very little of the value that’s held of GMX is actually being utilized in any trades, whereas Hyperliquid offers almost 3x’s the returns for $HLP holders at a Volume-to-TVL ratio of 5.08:
By allowing users to use re-staked $ETH for liquidity, suppliers can be less concerned about how high or low the platform’s utilization rate may be — either way LP holders will still be earning real yields both from validator yields and Eigenlayer points.
How risky is it to supply liquidity for a perpDEX?: Apart from general DeFi smart contract risk, there’s always a risk of providing liquidity for a PerpDEX, but it’s a pretty lucrative proposition as nearly 90% of traders end up losing money.
Trading Competition
As I mentioned before, in about a day, Zaros’ testnet will be open up for a trading competition, where users can compete in order to earn more Zaros points. Currently there are 4 ways in which you can earn points:
The testnet is now live for everyone, but had you been able to get an alpha key or been a project supporter earlier, you could have been eligible for one of the following multipliers:
However, even if you aren’t eligible for one of the multipliers, it’s still important to note that you’re still early, especially considering that trading has not been made yet live, and won’t be until the trading competition starts on 3/14/24.
Conclusion
As the first perpDEX that’s incorporating LRTs for their liquidity pools, I imagine that many other perpDEXes will begin to follow suit, especially if it becomes clear that it’s a profitable place to park your re-staked $ETH.
Interested in supplying some $ETH on Zaros to leverage more returns? Consider supporting this blog and use my referral link with ether.fi to re-stake your $ETH and to get some $eETH. Also, if you’re interested in signing up for the trading competition, or else simply wanting to earn some Zaros points yourself, consider using my testnet referral link when signing up and creating an account.
And as always thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
