Mars Protocol has taken a bold step by entering the perpetual futures arena and expanding the breadth of its offerings. Its plans for copy trading are outstanding and are projected to lead to great success in the future. This is an exciting time for the protocol. However, it is worrisome given the speed of development and overall risk aversion.
Copy trading was a novel idea that would have garnered attention and excitement had it been released after the perps competition concluded and trading went live. Who wouldn’t want to put their money behind a successful trader, particularly those traders that ranked on the leaderboards. Yet, we’re still waiting for this feature while other protocols, like Vector.fun, have beaten Mars to the punch with great success.
Perps markets are very lucrative due to trading fees. But Mars perps has little volume and almost non-existent fee revenue according to Defi Llama. Perps listings are anemic, with only a few assets listed that each take a governance vote before going live. The bigger names in perps list popular tokens like $Trump (or other meme coins) almost immediately after their launch. Also, decentralization and governance shouldn’t be an obstacle for listing new tokens. Nor should risk management prevent Mars from quickly listing and listing more tokens. Dydx has a method for listing and supplying liquidity for new perps markets without formal governance votes. Mars could do the same and team members have already voiced ideas on how risk could be managed with segregated liquidity.
Before, Mars was just a borrow-lend protocol confined to the Cosmos ecosystem with little competition. Now, Mars is competing across all chains because perps are synthetic assets that are not confined to a particular chain. Mars is now competing with the likes of Hyperliquid, which is very successful, very profitable, and quick to responded to changes in the market with new listings.
Mars developers are very concerned with risk management and avoiding protocol losses. While it’s good to be focused and concerned about risk management, it seems like Mars is more conservative than other protocols. Perhaps there’s a bit of PTSD from Terra/Luna, but this shouldn’t impede improvement and advancement of the protocol. Like Mars, Drift almost perished post FTX, but it survived and endured. Also like Mars, it is highly focused on risk management. However, this hasn’t stopped it from taking risks and pushing the envelope.
Mars fragments its liquidity between Neutron and Osmosis. Although token transfer is easy through IBC, there is no interoperability or aggregated liquidity between those two chains, making deposited assets less efficient. This needs to be addressed. Mars is the most successful borrow-lend protocol in the Cosmos ecosystem. Now, in order to survive and remain relevant in the quickly evolving crypto landscape, it needs to be competitive outside of Cosmos. It should be able to leverage that liquidity to grow in size and to support greater perps volume. Mars can no longer be complacent. Larger money markets in other ecosystems are expanding to different chains. Aave is moving beyond the EVM onto Solana and Aptos. Mars needs to expand and evolve to remain relevant.
Let’s not worry about trivial things like token burn and giving revenue to token holders. Although many people view these as paramount issues, in the larger scheme of Mars’s future, they are not. Mars needs to transform itself into an outstanding product that people want to use and is competitive with other money markets and perps DEXs.
The developers have shown dedication to the protocol even during sentiment lows when it seemed crypto was over. I know it’s a lot to ask but can we move quicker and take some risks. In order to survive and remain relevant, Mars must take some calculated risks during these fast-moving times. A little audaciousness, or even recklessness, can go a long way as we enter wider adoption and greater prosperity within the crypto ecosystem.
I write this to spark conversation from the developers and the community on how Mars can progress and grow. I hope the team can commit to a more aggressive timeline with greater risk, and the community can back them up with fervent support and proselytizing to others about Mars. Although it may be a bit cliché, I thought I’d close with a quote:
“Only those who will risk going too far can possibly find out how far they can go.”
– T. S. Eliot
This is Mars after all. We’ve already traveled far, but we can go farther.