While all eyes in the cryptocurrency market are glued to the impacts of Donald Trump being re-elected on coin prices and general sentiments, exciting developments are happening just under the radar.
Over the past several years, the cryptocurrency derivatives market has offered more experienced traders a new way to interact with the ecosystem through more complex, and more rewarding investment strategies. However, the sector’s rise within the wider blockchain arena has been more gradual given its appeal mainly remained focused on traders who already came from a financial and investment background.
For many crypto newcomers, the concept of cryptocurrency futures and options just seemed to be out of their grasp when they were still learning the ropes of a new financial ecosystem.
That being said, some projects were able to gain a share of the derivatives space, mainly Deribit, a cryptocurrency options and futures exchange for Bitcoin and Ethereum. Since launching in 2016, the exchange became well known and regarded as being an early mover in a space that few were paying that much attention to, especially after launching a perpetuals program. And because of that first-mover advantage, the exchange went mostly unchallenged while competitors were hard to encounter.
Now, the competition is heating up significantly.
As the cryptocurrency market broadens its reach to new audiences and even institutions that used to be uninterested or cautious of the space, a greater influx of traders are looking for ways to differentiate their digital asset portfolios. This positions the cryptocurrency derivatives market to welcome both new and experienced traders to experiment.
Enter Thalex, a cryptocurrency derivatives exchange that specializes in offering stablecoin-settled options. Recently, the exchange launched its Market Velocity Program, or “MVP”, to galvanize its active user community to deepen their participation across its derivatives offerings. The program is aimed at active Thalex users to recognize and incentivize their continued activity on the exchange—offering USDt rewards that are allocated based on a participant’s share of trading fees paid.
The incentive Thalex offers is significant, with roughly $250,000 to distribute as a volume rebate among traders in a highly competitive monthly reward pool. If we’re comparing numbers, this monthly reward pool exceeds Deribit’s $200,000 winter competition.
Some might say that incentive programs are dubiously successful in driving active participation in relatively niche sectors. But for Thalex, the program is paying off. Since launching on October 17th, the MVP initiative rocketed Thalex’s trading volume to $30 million in just one week. And with the program set to continue until March 31st, there is plenty of room for the trading volume to continue climbing.
By taking big swings through its incentive program, Thalex demonstrates how bold moves are critical to maintaining competition and gaining a foothold in an emerging market. Reactivating user communities is also an essential component here. It’s easy to get new people to sign up for a platform they will ultimately never use, but creating opportunities to recognize the existing community helps solidify their continued support and long-term usage.
When early adopters of a certain product or technology feel a tangible reward or recognition of their standing in the community, they feel more valued and likelier to continue using whatever the product or service provides. In adopting this mentality, the Thalex team also highlights the importance of staying power and longevity in an industry that can feel cutthroat or unwelcoming to competition.
Incentive programs will always exist in one form or another. When implemented correctly, like in the MVP initiative, companies like Thalex show how they can help a project and sector grow simultaneously.