Thanks for the constructive concerns, I´m happy to give you my thoughts on it.
From my experience, there is quite some overlap of traders in crypto that trade just about any market. And it makes sense because trading multiple markets and multiple strategies means diversification, thus smoother returns.
The prime targets are not the pure defi natives but the more generalized traders. Therefore the idea to partner with some of these interdisciplinary market makers / trading corps. And to be honest, for the pure crypto traders we have/add enough markets anyways. So by adding Forex we can also diversify and expand our customer base.
In my opinion there are several reasons why Forex volume on SNX is low and is bound to stay low.
- High gas fees per trade. Layer2 SNX is even younger than PERP so most trading is still done on L1. Confirmation times and gas costs are preventing any profitable short term Forex trading. PERP has super fast and gasless execution.
- Transaction fees of 0.3% is actually a lot. In EUR/USD pair this equals to roughly 36 pips. Centralized brokers usually take 3-5 pips. PERP would be at 12 pips with current fee table - way more competitive. (could we implement an individual fee plan for different markets? Would be amazing if we just take 0.03% commission in Forex in order to compete even with centralized brokers… Imagine the volume!)
- Leverage. SNX doesn´t allow for highly leveraged positions (yet) like PERP does. This is absolutely essential for Forex trading so you cannot compare the two. I´m surprised that SNX has any forex volume at all. It can only come from long term currency hedges because everything else is prohibitive expensive, slow and capital intensive.
I just checked the overall volume on SNX and I´m amazed. They only have around 30m daily volume. We are already topping this - a clear sign of better product market fit. So let´s not shy away to build the bridge to TradFi.