This is a segment from the 0xResearch newsletter. To read full editions, subscribe. In light of all the hype around real-world assets (RWAs) of late, I thought it’d be interesting to look at Ostium. Ostium is a perps DEX on Arbitrum that lets you trade RWAs onchain. It’s not a new project: The team raised $3.5 million in a round led by General Catalyst and LocalGlobe in October 2023, and went live last year. What is new, however, is its recently-launched points program, which has propelled TVL up tenfold from $5.5 million to $53.6 million. Source: DefiLlama What sets Ostium apart from competitor perps DEXs is its ability to long or short popular market indices (S&P500, Nikkei 225, Dow), commodities (gold, silver, copper, crude oil) or forex (GBP, EUR, JYP) – with up to 100-200x leverage. Unlike tokenized RWAs, tradable assets on Ostium are synthetic assets, so they’re not actually backed by actual collateral. Instead, asset prices are tracked by oracles. A custom-made pull-based oracle system was built for RWAs, and Chainlink Data Streams are used for crypto assets. Despite its RWA niche, actively-traded assets on Ostium are generally varied. On its highest trading volume day (April 16), crypto assets formed the largest percentage of assets traded (53%), foreign exchange was 22%, commodities was 18%, and indices was 7%. Source: Dune In the last seven days, Ostium has generated $938 million in trading volume, which translates to about $411k in fees. For context, total trading volume on all Arbitrum DEXs was ~$3.6 billion in the last seven days, based on DefiLlama. Is Ostium the next Hyperliquid? Both began as perps DEXs on Arbitrum. But here’s where they differ. Ostium uses a two-tiered liquidity layer structure consisting of a “liquidity buffer” and a market making vault. This market making vault works similar to Hyperliquid’s HLP vault, where the relationship between liquidity providers and the platform’s traders is of an adversarial nature, i.e. if traders win, LPs lose and vice versa. (This is the same vault that Hyperliquid recently, controversially bailed out in the JELLYJELLY memecoin debacle.) Ostium’s two-tiered design, however, is meant to thwart this zero-sum relationship. Its “liquidity buffer” allows LPs to benefit from growth in trading volume and open interest instead of only trader losses. This way, Ostium LPs and traders are in a win-win relationship (see docs for a fuller explanation). Ostium’s OLP vault is currently offering an above average 28.69% APY on USDC deposits to compensate for the risk of LPs potentially having to act as a counterparty.