Phoenix Trade Records All-Time High in Daily Volume as Perceived Favoritism Divides Solana Community

Solana’s budding perpetual futures race is generating more tweets than trades, with community members and builders airing their frustrations over perceived favoritism towards Phoenix Trade.

Critics argue that ecosystem leaders like Solana Labs co-founder Anatoly Yakovenko are over-promoting venues like Phoenix. Meanwhile, supporters claim that “all teams don’t deserve attention from the Foundation”, and resources should go towards teams that help the Solana Layer-1 succeed.

Perhaps buoyed by the open discussion of the virtues and flaws of its protocol, Phoenix Trade recorded a new all-time high in daily volume, signalling a steady growth trajectory since the launch of its private beta.

Solana Leaders Under Fire for Promoting Ecosystem Products

Solana community members are once again divided by the social media behavior of the network’s leadership. With Solana’s perpetual futures sector still trailing far behind rival chains, co-founder Anatoly Yakovenko and other high-profile ecosystem leaders have lent their support to Phoenix Trade, an emerging perps DEX.

Widespread support for Phoenix Trade has struck a sour note among Solana network participants and builders, who claim that leadership is biased towards certain products over others. 

Conversely, experts justify Solana leadership’s support on the grounds that Phoenix represents Solana’s first true perps venue. Where competitors like Pacifica and GMTrade, Solana’s leading perps venues by trading volume, rely on offchain or oracle-dependent execution, Phoenix operates entirely on Solana’s Layer-1. 

As a result, the fully onchain venue generates more onchain activity and brings economic value to the network in a way that its competitors do not.

Multicoin Capital Co-Founder: “The Solana Foundation Should Not Be Neutral”

The discourse has reignited debate on the Solana Foundation’s role within the ecosystem. While many have argued that the Foundation, using its various distribution channels and influence, should remain neutral, ecosystem leaders assert that the non-profit organization should only support the best teams.

Builders from the chain have further downplayed the influence the Solana Foundation has on the success of ecosystem projects. 

Commentators noted that many of Solana’s biggest applications, like Jupiter, Pumpfun, and Phantom have succeeded without significant investment and distribution from Solana leadership.

Phoenix Trade Records $4.3M in Daily Volume, a New All-Time High

With traders from across the crypto industry all fixating on the newest entrant to the perps race, Phoenix is enjoying a steady uptick in volume. 

Amidst the theatrics of public debate, Phoenix’s daily trading volume rose to $4.3M, recording a new all-time high for the emerging venue.

Outside of Phoenix, Solana’s perps sector is showing renewed signs of life. Trading data from the network’s leading venues suggests that daily trading volumes climbed past 2.5B on May 11, placing Solana second among all chains for the first time in 48 weeks.

GMTrade currently leads the market, accounting for 71% of the chain’s total perps volume. However, this volume is likely inflated by an ongoing incentives campaign designed to reward traders who generate volume on the platform.

For Phoenix, an emerging product still in its infancy, attracting meaningful volume is something of a chicken-and-egg problem. Despite its technical prowess, critics argue that Phoenix is inhibited by low volumes and thin order book liquidity, which can cause slippage on large trades. Serious traders require volume and liquidity depth, which can only be provided by having a sizable cohort of traders already using the venue.

Historically, incentives campaigns and airdrop promises have been the go-to user-acquisition strategy for emerging perps exchanges. Attracting retail liquidity effectively solves the cold start problem, laying a foundation of retail liquidity that attracts activity from market makers. 

Phoenix has communicated several times that it does not intend to launch a native token, which has so far discouraged retail traders from deploying capital on the venue.

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