Nado's on-chain perpetual contract market share rises to 1.45%, hitting a six-month high; how is the decentralized derivatives landscape evolving?
Author: Alea Research
Compiled by: TechFlow
TechFlow Summary: The decentralized perpetual contract sector has long been regarded as the most lucrative and fiercely competitive battleground on-chain. Alongside firmly dominant players like Hyperliquid and the mature veteran protocol dYdX, major emerging ecosystems and top-tier exchanges are also scrambling to establish their own dedicated liquidity strongholds. Among them, Nado, a core native derivatives DEX on Kraken’s Ethereum Layer 2 network Ink, is quietly launching its offensive, leveraging its integrated cross-margin account design that unifies spot trading, perpetual contracts, and lending.
In its latest research report, renowned on-chain data and economic model think tank Alea Research conducted an extremely detailed quantitative analysis of Nado’s core operational data for Q3 2026. Data shows that after hitting a trough in July, Nado staged a strong rebound in September, with its on-chain perpetual contract market share jumping to 1.45%, marking its highest level since March. Meanwhile, its quarterly perpetual contract trading volume reached $18.7 billion, while the turnover rate of its NLP market-making pool soared from $19 per dollar per month in Q2 to $89.
However, beneath the data-driven euphoria lies underlying concern. Despite a significant recovery in trading volume, Nado’s open interest market share nearly halved, indicating insufficient liquidity retention and position stickiness. Facing comprehensive encirclement from Robinhood partner Lighter, Aster, and the cross-asset platform trade.xyz, can Nado’s introduced market maker quoting mechanism and fee reduction strategy continue to take effect? TechFlow has fully compiled this data-intensive heavyweight research report.
Since its launch in November last year on Kraken’s Ethereum L2 network Ink, July was the most subdued full month in Nado’s operational performance to date.
Yet merely two months later, September dramatically evolved into the busiest month in the platform’s history.
Looking back at the entire quarter, the significant dip in July pulled Nado’s overall quarterly market share down to 1.08%, roughly matching the 1.10% level seen in Q2.
However, in the monthly statistics for September, its on-chain perpetual contract market share rebounded strongly to 1.45%, breaking its highest historical peak since March this year.
Chart: Monthly trend curve of Nado’s on-chain perpetual contract market share since its launch in November 2025
At the infrastructure level, Nado operates a unified cross-margin account system on the Ink network that integrates spot trading, perpetual contracts, and lending/shorting.
By comparison, industry leader Hyperliquid similarly offers a unified account on its dedicated L1 chain, while dYdX opts to maintain a single-perpetual-contract architecture on its Cosmos appchain.
Key Takeaways
In September, Nado’s market share in total on-chain decentralized perpetual contract trading volume rose to 1.45%, achieving a near-doubling rebound compared to 0.77% in July.
Despite a substantial rebound in monthly trading volume, Nado’s share in open interest declined, with its quarterly average dropping to 0.81% in Q3, nearly halving from 1.46% in Q2.
Due to a significant increase in market turnover, every $1 of capital in the NLP market-making pool supported up to $89 in monthly trading volume during Q3, far surpassing the $19 seen in Q2.
After deducting liquidity rebates paid to market makers, Nado recorded net fee income of $2.13 million in Q3, a decline from $3.17 million in Q2.
The platform proactively lowered its taker fees on August 17, a measure that helped stabilize the annualized net yield rate around 23% of total open interest.
Chart: Quarterly comparison of Nado’s core operational data for Q3
Market Context: Bitcoin Gains 43% in Q3
Trading activity across the broader crypto derivatives market closely correlates with the price trends of underlying flagship assets.
Bitcoin spot prices rallied steadily from a close of $58,500 on June 30 to $83,600 on September 30, accumulating a quarterly gain of 43%.
However, most of this upward momentum concentrated around mid-August. Within just a few days, the market underwent a violent short squeeze cascade.
Chart: Bitcoin spot price trend and cross-market derivative liquidation volatility curve in Q3
Riding this market pulse, Nado set a single-day trading record of $769 million on August 21, precisely two days after the short squeeze event.
Trading Volume & Open Interest: Monthly Volume Nearly Tripled
Dragged down by sluggish performance in July, Nado accumulated $18.7 billion in perpetual contract trading volume for the entire quarter, a slight 7.0% contraction from Q2.
Nevertheless, month-over-month trends reveal a clear accelerating uptrend in platform volume.
Chart: Nado's monthly perpetual contract trading volume and distribution across all asset categories
The platform-wide average open interest stood at $37.3 million in Q3. Compared to the volatile swings in Q2, positions in Q3 exhibited more moderate and restrained behavior.
Chart: Daily total open interest trajectory and changes in position retention for Nado
In terms of capital efficiency, each $1 of open interest turned over an average of 5.4 times daily in Q3, significantly higher than the 4.3 times in Q2, indicating a marked acceleration in trader entry and exit frequency.
Market Share Divergence: Volume Recovery vs. Halving Open Interest Share
Examining market share dimensions reveals a stark dichotomy for Nado: recovering trading volume share alongside a halved open interest share.
On the trading volume front, Nado’s on-chain market share recaptured lost ground in August and steadily climbed to 1.45% in September.
Chart: Dynamic evolution of market share for mainstream on-chain derivative protocols by trading volume
Conversely, regarding positions, its share declined from an average of 1.46% in Q2 to 0.81% in Q3.
This divergence is attributed to the stronger gravitational pull of competing camps—led by Hyperliquid, Lighter, Aster, and dYdX—in absorbing large-scale long-term deposited capital.
Chart: Distribution landscape of cross-market open interest across leading DEXs
Notably, Lighter, which connected to the Robinhood partnership liquidity channel on July 1, experienced explosive expansion from mid-August to late September, continuously eroding incumbent market shares.
Perpetual Contract Performance: Crypto Asset Perpetual Volume Tripling
Perpetual contract business forms Nado’s core foundation, with the platform currently covering 75 distinct trading pairs spanning cryptocurrencies, stock indices, gold, and forex.
In the crypto-native contract segment, Nado’s volume surged from an extremely low baseline in July to an astonishing threefold increase by September.
Chart: Structural breakdown of perpetual contract trading volume between crypto-native assets and Real World Assets (RWAs)
Meanwhile, competition in the tokenized US equity perpetual contract arena remains particularly fierce. trade.xyz on the Hyperliquid platform raked in a staggering volume exceeding $100 billion in July alone.
Spot & Lending Markets: Capital Utilization Steadily Rising
Beyond derivative matching, Nado also provides seamlessly integrated lending market services for users.
Data shows that lending volume averaged 17.0% of total deposited assets in Q3, a steady increase from 14.1% in Q2.
Chart: Dynamic trends of total borrowings and capital utilization rate in Nado’s spot lending pools
The efficient circulation of lending capital provides crucial liquidity support for traders looking to amplify leverage and conduct cross-currency collateralization during volatile market conditions.
NLP Market-Making Pool: Explosive Surge in Capital Turnover
Nado’s underlying order book liquidity is directly guaranteed by quotes from its proprietary NLP market-making pool.
Liquidity providers deposit USDT into the NLP pool, and smart contracts automatically algorithmically place orders on the book to provide liquidity and capture market-making yields.
Chart: Curve of NLP market-making pool asset size and daily trading turnover multiplier
In Q3, although some liquidity providers executed net redemptions, the operational efficiency of retained capital reached remarkably high levels.
Each $1 within the pool facilitated up to $89 in monthly matched volume in September, thoroughly validating the high capital efficiency of its order book algorithm.
Protocol Revenue Structure: High Turnover Sustains Net Fee Levels
After excluding rebate subsidies paid to resting-limit market makers, Nado recorded net fee income of $2.13 million in Q3.
The platform implemented a fee reform on August 17, uniformly lowering taker fees from the original 2.18 basis points to 1.81 basis points.
Chart: Quarterly breakdown of Nado’s historical total fees, maker rebates, and protocol net revenue
Although fees were reduced, the surge in turnover largely offset the per-unit revenue loss from the fee cuts.
Chart: Comparison of platform nominal vs. actual fees before and after the maker rebate policy
Throughout the quarter, weekly rewards distributed to traders accounted for approximately 27% of net income, maintaining a relatively prudent balance between sustaining growth momentum and controlling inflationary costs.
Future Evolution: Reward Caps, Market Maker Quotes, and Regulated Derivatives
Entering Q4, the Nado team continues rapid iteration on product architecture and economic models.
In early October, the team announced a modest adjustment of the weekly incentive reward cap from $100,000 to $90,000, signaling a strategic move to further tighten subsidies and pivot toward organic profitability.
Simultaneously, the platform formally submitted a proposal on October 7 to introduce a new mechanism featuring dealer quotes from market makers, designed to provide better execution depth for large-volume trades.
In the regulated derivatives space, with Kalshi applying to list US equity perpetual contracts and major institutions accelerating their entry, the competitive landscape across the market is being elevated to a higher dimension.
Scenario Analysis & Future Revenue Outlook
For Nado’s financial trajectory in Q4, the core variable hinges on the dynamic interplay between trading volume and blended fee rates.
Chart: Net profit sensitivity scenario simulation for Nado in Q4 under varying assumptions on trading volume and fee rates
Sensitivity analysis indicates that under the current fee model, a mere 0.1 basis point adjustment in the average fee impacts final profits even more significantly than hundreds of millions in incremental trading volume.
Leveraging the robust regulatory backing of the Kraken ecosystem and the vision of a unified account spanning all assets, whether Nado can withstand competitive pressures and achieve a qualitative leap in Q4 will serve as a critical window for observing the evolution of L2 derivatives.