Kwenta’s decision to integrate with Perennial on Arbitrum was rooted in a combination of technical excellence and strategic alignment. Perennial approached Kwenta with a proposal to integrate their perpetual futures offering alongside Kwenta’s existing Synthetix-based markets. The proposal was accepted by community governance based on the technical analysis performed by Kwenta’s Core Contributors. Perennial’s low-lift integration framework, enabled by their SDK, and their initiative to secure trading incentives from the Arbitrum DAO made Perennial an appropriate fit for a first integration. Kwenta recognized the potential in Perennial, seeing them as a significant, yet underappreciated force in DeFi.
The goals for the integration were ambitious. This was Kwenta’s first venture into adding a new integrator beyond Synthetix, and expectations were high. Kwenta sought to maintain the seamless user experience they were known for, but with the added complexity of supporting a new liquidity provider. The Perennial SDK was crucial for maintaining flexibility and ease of updates. The launch aimed to capitalize on ARB rewards to attract traders and offer a UX competitive with centralized exchanges, pushing Kwenta’s UX forward and providing a simpler, more efficient trading experience.
The proposal was passed in February 2024, and the integration went live in late June 2024. As of September 2024, the integration has been operational for approximately three months.
Implementation Process
There were some technical challenges before Kwenta could integrate a second liquidity provider. Kwenta’s codebase required a comprehensive refactor to allow for modularity, making it capable of supporting multiple liquidity providers. The new SDK built by Perennial needed regular updates as the two teams worked together, uncovering areas for optimization and improvement.
Despite these challenges, the collaboration between Kwenta and Perennial was remarkably productive. There was continuous communication, and the relationship was refreshing, with Perennial’s team showing enthusiasm to build a fruitful partnership.
Key Features of the Integration
Perennial’s integration brought a unique set of features to Kwenta’s platform. Its leveraged market-making offers capital efficiency for liquidity providers and improved risk isolation compared to competitors. Perennial’s dynamic fees, which account for gas costs, enabled Kwenta to build a gasless one-click trading feature, providing a seamless experience for users. This entire process remains on-chain, creating a more streamlined and competitive trading environment on Kwenta.
These features complemented Kwenta’s existing offerings by enhancing the user experience and setting new benchmarks for what the platform could deliver. The integration expanded the potential for future partnerships with liquidity providers offering innovative perpetual products, pushing Kwenta’s UX forward and inspiring future developments.
Performance Metrics
The success of Kwenta’s Perennial integration can be seen through 2 key performance metrics: volume, and fees generated.
For detailed performance metrics, see the Kwenta Metrics Dune Dashboard.
Volume Among Kwenta Integrations
The integration of Perennial brought about significant changes in trading volume on Kwenta's platform. Following its launch on Kwenta in late June 2024, Perennial's weekly trading volume quickly ramped up, reaching a peak of $114.45 million by mid-August. August saw an average of $84.2 million in weekly volume, while September averaged $58.1 million, marking Perennial as a substantial contributor to Kwenta's overall performance. While Kwenta’s peak volumes still occured during a few very popular weeks of Synthetix Perps v2 trading, post-Perennial volume remained both consistent and strong, reaching overall peaks of over $500m in weekly volume.
During its peak week in relative strength, Perennial contributed 32% of Kwenta's total trading volume and consistently accounted for 30-40% of weekly volume throughout September. Although SNX v2 remains historically popular, Perennial’s consistent weekly volumes exceeding $60 million in early September made Perennial the most popular Kwenta integration during this month during an overall downturn in the derivatives market.
Volume Compared with the Broader Market
Kwenta’s overall market share remained stable and substantial, often accounting for 60-80% of market share during the period from June to August 2024, a strong indicator of resilience and competitive positioning. The integration elevated Kwenta’s status to an aggregator, increasing its visibility and appeal to a broader range of traders.
For detailed derivatives aggregator stats, see the DefiLlama Derivatives Aggregator Dashboard
Perennial, meanwhile, saw a drastic increase in trading volume, with its average weekly volume rising from about $10 million before the integration to consistently over $40 million afterward. This four- to tenfold increase in volume underscores the significant impact Kwenta’s integration had on Perennial’s market performance.
For detailed perennial stats, see the DefiLlama Perennial Dashboard
Fee Generation
Kwenta stakers also benefited from the integration through fee generation. In June 2024, stakers began receiving fees from Perennial trades, and by September, Perennial had become the dominant fee contributor, accounting for 90.8% of staker fee capture. This diversified the fee sources for Kwenta stakers and increased overall fee generation, with total monthly staker fees growing by 13.5% after Perennial’s integration.
New integration proposals with Gains and GMX show how a growing demand for frontends has emerged among DeFi liquidity providers, and a market rate for traffic is beginning to emerge, defining the B2B relationships between liquidity providers and frontend builders.
The Trading Experience
The primary goal of Kwenta’s Perps Marketplace is to provide users with simple, powerful access to novel markets and features, deep liquidity, and optimal pricing. Success means providing intuitive access to practical tools.
UX
Feedback from traders and the community highlighted the success of the integration. Traders appreciated the speed, simplicity, and reliability of the Perennial-powered platform, with the one-click trading feature being particularly well-received. Testimonials from users underscored the platform’s low fees, straightforward liquidation mechanisms, and consistent performance. While liquidity constraints were noted, leading to high funding rates, this was expected for a newer perpetual futures platform.
Key features such as a complete SDK, native limit orders, dynamic fees which enable gasless trading, delegated trading, and active support from the Perennial team ensured a seamless integration with a high degree of reliability for users. In particular, gasless 1 click trading and improved reliability for limit orders received the most positive feedback, and set a standard for future integrations which will allow Kwenta to work with any onchain perps provider to build a more CEX-like experience.
Market Offerings
The integration of Perennial allowed Kwenta to expand its asset offerings to include traditional finance pairs such as Gold, EUR, JPY, and GBP, attracting a wider range of traders. Perennial’s unique leveraged market making makes spinning up new markets with high risk profiles easier since liquidity is not shared from a single pool across every market, and demand can be instantly met by a single market maker allocating liquidity to a given market.
This allows Kwenta to offer markets not seen even on other popular DeFi perps exchanges, such as power perps and may allow markets on NFT floor prices and other long tail markets in the future. For a current list of all available markets, see the markets page on Kwenta and select Arbitrum as the active network.
What it All Means
The integration of Perennial into Kwenta has been a resounding success. Both platforms have benefited immensely, with substantial volume growth and improved user experience. The integration has solidified Kwenta’s market position, diversified fee streams for stakers, and expanded asset offerings. Although ARB rewards contributed to the initial success, Perennial’s consistent performance since the launch suggests that the platform will continue to play a crucial role in Kwenta’s future.
Perennial is set to expand to the Base chain and launch a V2 perps product featuring a hybrid AMM-order book model, which promises to further enhance capital efficiency. Kwenta remains committed to supporting Perennial’s upgrades and anticipates that Perennial will continue to drive a substantial portion of its volume in the future.
Likewise, a focus on improving the experience of navigating between liquidity providers and expanding offerings on Arbitrum should significantly ease the frictions Kwenta users experience when taking advantage of integrations like Perennial. Providing users simple tools for moving margin between markets should allow more users to take advantage of unique offerings from Perennial.
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