Pivot Global is proud to announce our investment in Adrena, a peer-to-pool perpetual trading platform on Solana. The protocol operates on a two-token model featuring $ADX (the governance token) and $ALP (the LP token). $ADX grants users voting rights to govern the platform through the Adrena DAO and also entitles them to a 20% share of the platform's revenue. Meanwhile, $ALP represents the multi-asset pool and earns 70% of the platform's revenue. The remaining 10% will be directed to a fund used to buyback $ADX.

As outlined in our previous article, the market potential for perpetual trading on Solana is significant, driven by several key factors. Firstly, Solana's spot trading volume has seen remarkable growth recently, taking top spot and exceeding Ethereum’s monthly volume for the first time in July 2024. Solana’s perpetual trading volume has also experienced a significant uptick from $3.9B in January 2024 to $26B in July 2024. Despite this, Solana's perpetual trading volume remains behind other ecosystems such as Arbitrum and Hyperliquid. This disparity suggests that Solana's perpetual trading market has substantial room for growth.

Why Adrena?

Adrena is also poised to capture market share from and capitalize on the popularity of GMX-style perpetual trading within the Solana ecosystem. This is evident as Jupiter Perps currently holds the highest volume for Solana perpetual volume, and Flashtrade has also gained significant traction shortly after its launch. Adrena distinguishes itself by being the only perpetual protocol on Solana that returns 100% of its revenue back to the community. ADX is also one of the few tokens within the Solana ecosystem that has actual value accrual to it. This unique value proposition is likely to attract more users and liquidity providers looking for maximum returns on their participation.

The success of GMX on Arbitrum has catalyzed the development of an ecosystem of DeFi protocols, such as Pendle and JonesDAO. These protocols, built on top of GMX, demonstrate the potential for a similar ecosystem to emerge on Solana. For instance, Adrena could enable lending protocols that utilize ALP as collateral for stablecoin issuance. Platforms like Kamino and Mrgn are well-positioned to facilitate this, allowing for significant growth in Adrena’s liquidity pools by providing users with the ability to loop their positions. In the long term, a product akin to abracadabra.money could be developed to leverage ALP and other yield-bearing tokens. Additionally, there is potential for a Pendle-like product that separates yield from ALP and ADX. 

We are thrilled to be able to back the Adrena team which is led by a group of well-respected anonymous Solana native builders who were core contributors to the Solana Perpetuals program - an open-source implementation of a non-custodial decentralized exchange that supports leveraged trading in a variety of assets which has since been used by Jupiter and Flashtrade. Additionally, Adrena is also supported by more than 100+ diverse community contributors in Solana like Joe McCann from Asymmetric, llmoi & Richard from Tensor, Sol Big Brain, r89, Santiago Santos, 3nes and more.

If you are interested to participate as a trader or liquidity provider, please check out https://www.adrena.xyz/