Polynomial Finance: Leading the Charge in DeFi Trading

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TLDR;

  • Polynomial Finance is a front-end integrator that combines the benefits of Synthetix Perps, providing a clear and user-friendly trading interface for perps, spot, and more.
  • Polynomial Perps hosts 36 trading pairs, offering the lowest on-chain trading fees in the industry thanks to Synthetix Perps.
  • Polynomial Finance stands out due to its smart contract wallets, limit order functionalities, trading competitions, and a clean, user-friendly interface.
  • The protocol has opted into the Synthetix Optimism Trading Incentives Program, which rewards traders with OP tokens during a 20-week event. Rewards distributed are proportional to the trading fees paid by users.
  • Polynomial is currently running a trading season event until September 4th. This event allows traders to earn unique NFTs and increase their $OP rewards by up to 30%.

The decentralized finance landscape is experiencing an incredible expansion, leading to an amplified demand for reliable, efficient, and user-friendly trading platforms.  Polynomial has already achieved over $200m in cumulative volume, marking them one of the key front-end integrators for Synthetix Perps. With their focus on innovation and making things easy for traders, Polynomial is ready to use the changing DeFi world to make transactions even simpler and more efficient.

What are Synthetix Perps?

Synthetix Perps are gaining prominence as a popular choice for on-chain traders, recently hitting over $17bn+ in cumulative volume. Synthetix Perps offers an efficient trading environment, enabling traders to use utilize various trading strategies. They allow traders to hedge against market swings, take positions on assets without owning them directly, utilize leverage in their trading strategies, exploit arbitrage opportunities, and diversify their portfolios.

Synthetix Perps significantly reduces fees and enhances scalability, capital efficiency, and overall user experience. The launch of an innovative off-chain oracle system, with oracles from Pyth Network, has cut Perps trading fees to just 2-15 basis points across cryptocurrency, forex, and commodity assets.

Traders can access Synthetix Perps through Polynomial Finance, which uses Synthetix's liquidity to enable Perps trading. Synthetix Perps has also improved the market-making process with its new exchange engine that efficiently matches buyers and sellers. It introduces beneficial features for risk management and offers incentives to arbitrage traders, encouraging a neutral market state.

What is Polynomial Finance?

Polynomial Finance is a decentralized derivatives exchange that harnesses the Synthetix protocol on Optimism. Offering traders leverage up to 50x, Polynomial Finance stands out from other derivative exchanges with a smoother user interface and lower fees. In essence, Polynomial Finance provides a versatile, efficient, cost-effective decentralized trading platform.

In addition to the derivatives exchange, Polynomial Finance operates Polynomial Swap, a tool designed to streamline the swapping experience on Optimism. It allows for quick trading, particularly of synthetic assets, by using various AMMs for routing non-synthetic assets.

Trading Opportunities on Polynomial Finance

At the heart of Polynomial Finance are Synthetix Perps. Much like traditional futures contracts, perpetual futures enable traders to speculate on the price movements of underlying assets. However, they stand apart with no fixed expiration date, using a funding mechanism to align the contract price with the underlying spot price.

Traders on Polynomial Finance can take long or short positions depending on their market expectations. Polynomial Finance allows traders to navigate the volatile and fast-paced decentralized trading environment. It simplifies complex trading strategies, making different types of traders more accessible. Whether you are betting on price increases with a long position or capitalizing on declines with a short position, Polynomial Finance equips traders with the tools they need to thrive.

The Advantages of Polynomial Finance

Polynomial Finance stands out in the DeFI space thanks to various distinctive features that place it a step ahead of other front-end providers, allowing traders to trade via USDC and sUSD.

Smart Contract Wallets

One of the key advantages is the usage of smart contract wallets. Unlike an Externally Owned Account (EOA), a smart contract wallet is managed by a contract account and is governed by predefined rules programmed into a smart contract. By offering smart contract wallets, Polynomial provides users with a higher level of control and security for their assets, making deposits more seamless and secure. The usage of smart contract wallets unifies the trading experience and reduces the number of transactions users must complete. Furthermore, it is possible to add multiple authorities to the smart contract wallet, allowing traders to trade from additional addresses, or trade on the go with a mobile wallet.

Advanced Orders

Advanced Orders V2 on Polynomial Trade enhances trading with high speed, precision, and improved user experience. The platform's standout feature is the ability to place stop loss, take profit, limit, and stop orders, offering traders better risk management and potential profit optimization. All these are made possible while leveraging real-time, decentralized market data from Pyth Network, leading to more effective trading on Synthetix-supported perpetual contract platforms.

Clean and Intuitive User Interface

Polynomial also prides itself on its clean and user-friendly interface, which makes trading easier and more accessible. The protocol displays annual percentage yields (APYs) for arbitrage trading, a unique feature that can aid users in their decision-making process and make their trading experience more profitable.

In a nutshell, Polynomial Finance brings together a host of features that simplify and enhance the trading experience. By providing smart contract wallets, limit orders, and a streamlined user interface, Polynomial Finance has carved out a competitive edge that sets it apart from other integrators in the DeFi ecosystem.

OP Rewards and Incentives - Synthetix OP Incentives Program

Polynomial has opted into the Synthetix Optimism Trading Incentives Program, which rewards active traders with OP tokens during a 20-week event. Rewards distributed are proportional to the trading fees paid by users.

A total of 5,310,000 OP will be awarded over the event duration. The weekly breakdown is as follows:

Week 1: 10,000 OP

Weeks 2-3: 100,000 OP

Weeks 4-20: 300,000 OP

Your rewards are calculated from your trading fees, with rawScore = tradeFeesPaid. Remember that OP rewards don't cover keeper fees or funding costs. All orders on Polynomial are traded as delayed and carry a fixed execution cost, currently around $5.

You can boost your score by staking SNX tokens. Here's how the multiplier works:

0-2499 SNX: 1.00x

2500-5000 SNX: 1.05x

5001-10,000 SNX: 1.075x

10,001-20,000 SNX: 1.1x

20,001 SNX: 1.15x

This staking system amplifies the benefits of participating in OP Season, making it an enticing opportunity for traders.

Polynomial Trading Season

Polynomial recently kickstarted its new trading season, promising traders an exhilarating range of opportunities to ascend in levels, earn unique NFTs, and gain as much as 30% more in $OP rewards. The trading season started at 10 PM UTC on July 4th and will wrap up at the same time on September 4th. Participants can climb through a total of seven tiers, beginning from the first level. Importantly, traders who execute limit orders and yield positive PnL will secure twice the experience points. Their $OP rewards are amplified by up to 30% as they rise in levels. Rewards are apportioned based on the level of the trader and are limited to a maximum of 50k $OP weekly.

Polynomial’s Roadmap

Polynomial Finance has a clear roadmap to enhance user experience and trading efficiency. The team is improving the limit order functionality to ensure more efficient order fills, offering high value to traders. Polynomial's goal is simple: continually refining and improving its platform, delivering a better user trading experience.

Polynomial Finance is developing Power Perpetuals, first introduced by Paradigm researchers, as part of their roadmap. These derivatives, such as ETH² and BTC², offer convexity without expiry. If the price of ETH doubles, then the ETH2 power perp quadruples. Those who take a long position on a power perpetual must pay a premium yield.

Polynomial is set to become a single destination for trading Perps and Power Perps, equipped with a new delta-hedged Automated Market Maker (AMM), providing tighter spreads, lower funding rates, and consolidating market liquidity into a single instrument. Other notable features include stablecoin collateralized short positions, automated delta-neutral strategies, and multiple markets. These are scheduled for deployment later in 2023.

Furthermore, Polynomial is developing a funding rate arbitrage functionality where a user can set up an arb with the click of a button, allowing for high yields without the complexities of setting up the positions on both sides. This innovation is expected to reshape the landscape of on-chain Perp contracts, on-chain trading, and liquidity management, incentivizing the funding rates to go down.