understanding-logx-in-one-read

Introduction

Perpetual contracts, which surged in 2022, are the derivatives with the largest trading volume in the market. Since the FTX’s collapse last year, the market size of on-chain exchanges has expanded, and the users and fund base of decentralized Perp DEXs have also been increasing.

Ethereum’s high Gas fees and underlying performance limitations have restricted the development of perpetual contract trading platforms. With the continuous improvement of Layer2 infrastructure, more perpetual contract trading platforms are choosing to build on Layer2. Looking solely at the Perp DEX track, protocols such as dYdX, GMX, and Gains Network have occupied a specific market size, and the track pattern is still undetermined, with fierce competition. LogX is committed to aggregating multiple Perp DEXs to solve the problem of fund dispersion for investors. This article focuses on the LogX protocol, analyzing its product features and technical architecture, and analyzing the current development status.

What is LogX?

LogX is a multi-chain deployed perpetual contract aggregation platform on multiple networks such as Manta, Linea, Arbitrum, and Optimism. The product’s overall design is not significantly different from other Perp DEXs, with the core focus on aggregation to address the issue of user fund dispersion.

The team is from India and completed a seed round of financing in September 2020, raising $6.1 million in funding support. The product was officially launched in May 2023, and in August of the same year, it was announced that an airdrop incentive program would be launched. A recent tweet stated that 12% of LogX tokens would be airdropped, and the tokens are expected to be officially launched in the second or third quarter. The token airdrop incentive has attracted many users and funds to the platform, leading to a continuous increase in trading volume.

Product Experience

The official LogX website supports 176 assets, including 139 crypto asset trading pairs, with a maximum leverage of up to 50x. The product’s overall design is not significantly different from other perpetual contract protocols. On the right side of the page, users can choose to open long, short, market, or limit orders. After inputting relevant parameters such as collateral assets and leverage based on their risk preferences, users can choose to open positions, and the platform also provides real-time information on account transaction history and position changes.

The position status table at the bottom of the page allows users to adjust and close partial positions at any time based on their actual needs.

Image Source: https://app.logx.trade/#BTC

LogX is a perpetual contract aggregator. The platform has integrated Mux Protocol, GMX, Gain Network, and HyperLiquid and will seek the best execution price for users across these platforms. The platform charges traders a fee of 0.1% of the position size, deducted from the user’s collateral. The funding fee for opening contracts depends on the size and utilization rate of the funding pool and is accumulated every 60 seconds.

Technical Architecture

As a perpetual contract trading platform, the core design of LogX lies in its role as an aggregator. The official technical architecture of LogX is illustrated in the following diagram:

Image Source:

https://logx-1.gitbook.io/logx-docs/logx-aggregator/technical-guide/architecture

The diagram shows that after users send a trade request, it is routed to the Proxy Factory contract by the corresponding Transfer contract. The Transfer contract is an upgradable proxy contract that can transfer and upgrade user requests to another implementation contract. For each unique user address, collateral token, and position direction, the Proxy Factory contract creates a User Position Contract, which interacts directly with the Exchange Contract. These Exchange Contracts are contracts interfacing with various perpetual contract exchanges, enabling quote, order, and execution functionalities. Additionally, the Proxy Factory has an upgrade feature, where only a specific administrator can interact directly with the Proxy Factory to update the addresses of the implementation contracts it references.

Users using LogX do not need to open different positions on multiple exchanges. LogX aggregates multiple exchanges on one platform, solving the problem of managing dispersed positions for users. However, if it integrates exchanges with its chains, it still faces challenges in effectively addressing capital efficiency issues.

Economic Model

The team announced a LOGX token airdrop incentive plan in August 2023, but the token has not been officially launched yet. The team recently tweeted that the airdrop plan will be launched on March 5, with 12% of the total supply allocated to the Pre-TGE airdrop plan. The LOGX token is expected to be launched in the second or third quarter.

Development Status

Since LogX announced its token airdrop incentive plan, it has attracted users and funds, leading to a continuous increase in Total Value Locked (TVL). Currently, the total locked value is approximately around 15 million USD. Despite the airdrop incentives, LogX still cannot compete with mainstream perpetual contract trading platforms on the market, and there is still a certain gap.

Image Source：https://defillama.com/protocol/logx

Recently, the team posted a tweet clarifying that the token airdrop incentive plan has boosted trading volume. Currently, LogX’s trading volume has surpassed 4.3 billion USD, with a 24-hour trading volume close to 80 million USD, and the total number of users has exceeded 100,000. It is important to note that this trading volume does not represent real demand but rather market behavior stimulated by the airdrop. The overall development pattern lacks sustainability, and the protocol will face the risk of user attrition and a sudden decrease in funds once the airdrop activity ends.

Image Source：https://app.logx.trade/dashboard

Conclusion

LogX is a platform that aggregates perpetual contract trading deployed across multiple chains. Currently, it has integrated four Perp DEX platforms, providing users with optimal solutions from various underlying contract trades. While the project still lags behind mainstream Perp DEX platforms, it has attracted some users and funds through airdrop incentives. However, it’s important to note that this activity is driven by speculative trading rather than genuine demand, posing a risk of user attrition once the airdrop ends.