1. Vision

The decentralized finance landscape has grown significantly since “DEFI Summer” in 2020, yet fundamental challenges persist around a fragmented user experience, capital efficiency, and scalability in comparison with CEFI incumbents. Over the past year, Paradex has been quietly building a comprehensive DEFI network designed to bridge the gap between CEFI and DEFI and usher in the next wave of on chain adoption. “The Paradex Network” is comprised of three core components:

• Exchange
• Native Yield Bearing Synthetic Dollar
• Blockchain

Paradex Exchange

The exchange combines three core financial primitives into a single decentralized exchange and UX: Exchange, Asset Management, Borrow/Lend.

• Exchange: Paradex is building the first DEX that will feature a product suite comparable to that of CEFI exchanges. The exchange infrastructure is built to support trading any instrument — Perpetual Futures, Perpetual Options, and Spot — on any cryptocurrency, all from a single account using any asset as collateral. Traders will be able to seamlessly switch between isolated, cross, and portfolio margin modes to maximize capital efficiency of their collateral. Every design choice to date has been in service of this end goal.
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• ‍Decentralized Asset Management: Paradex Vaults are a powerful DeFi primitive introducing a new standard for on-chain asset management, through programmable, multi-strategy portfolios. Vaults give users access to advanced yield-generating strategies ranging from active trading to passive index exposure via Vault Traded Funds (VTFs), making sophisticated crypto investing more accessible. Every vault depositor receives an LP token for their share in the vault. This LP token can be withdrawn to L1 (coming Q1 2025) and composed with other Defi primitives such as Pendle, Morpho and Aave. In the near future, tokens from certain delta-neutral protocol vaults will be usable as collateral - either for deposits into other vaults or directly on the exchange (note that not all protocol vaults will be delta-neutral)
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• ‍Borrow/Lend Markets (Q1 2025): Paradex’s integrated money markets will allow traders to borrow and lend seamlessly from their unified trading account, using their entire portfolio as collateral — without ever leaving the platform or unwinding positions. Traders can leverage their positions through borrowing or generate passive income by lending idle assets.

DIME’s future utility will include acceptance as payment for trading fees, fee discounts, staking and liquidity mining rewards, and participation in governance / voting.

Native Yield Bearing Synthetic Dollar (XUSD)

Shortly after the launch of spot markets (Q1 2025), Paradex will introduce XUSD, a delta-neutral, native synthetic dollar powered by Paradex vaults, that unlocks yield for all depositors. XUSD’s yield will be derived from the futures basis on Paradex and it can be used as collateral to trade and/or deposit into vaults and lending pools, enabling users to stack yield from multiple sources. XUSD will address a key inefficiency in DeFi trading today: the opportunity cost of locked collateral.

Paradex Chain

The Paradex Chain is a high-performance Layer 2 blockchain built on Ethereum designed to enhance throughput while preserving the security and decentralization of Ethereum. Built on the Starknet Stack and powered by trustless, quantum-resistant zk-STARKs and Native Account Abstraction, Paradex Chain processes up to 1,000 transactions per second (TPS), with ongoing optimizations aiming for significantly higher throughput in the coming months. L2 block finality is achieved in 2–3 seconds with full security finality anchored to Ethereum on an ongoing basis through zk-proof verifications.

The Paradex Chain runs on a native programming language called Cairo, designed to facilitate the development of scalable smart contracts optimized for zero-knowledge proofs. The Paradex Chain will soon open to external developers, its first step toward becoming public and permissionless, enabling the creation of dApps that are provable and share state with the DEX, unlocking unprecedented scalability for the decentralized ecosystem.

DIME will be the native gas token powering the open-financial system on the Paradex Chain.

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2. Community Airdrop — 20% Genesis Allocation

Airdrop

Recognizing that thriving ecosystems are built over time, we’ve allocated 20% of token supply to a Community Airdrop that spans multiple XP seasons and will be based on a user’s XP. The XP mechanism is designed to reduce gaming of the rewards system, minimize distribution to sybil actors, and maximize rewards for genuine users that drive meaningful activity.

The Community Airdrop, spanning all seasons, is currently planned for the end of Season 2. Our goal is to ensure a fair distribution that rewards deep, long-term engagement across the entire community. Community Airdrop tokens will be fully unlocked.

Note that the Season 2 end date and airdrop timing may shift based on market conditions and product traction. Core contributors are strictly excluded from the airdrop.

Listing

Listing of the token will occur on Paradex shortly after the Community Airdrop. This will complete the SuperDEX vision where users will be able to trade perpetual futures, perpetual options and spot from a single unified account using any crypto asset as collateral.

Tokenomics

The total token supply will be distributed as follows with 57.6% allocated to the community

• 20.0% for Community Airdrop
• 26.6% for Ongoing Community Rewards (post Airdrop)
• 5.0% for Liquidity Programs
• 6.0% for Foundation Budget
• 25.1% for Core Contributors
• 3.9% for Future Core Contributors and Advisors
• 13.4% for Paradigm shareholders

Update: Following the publication of this blog post, final allocations were slightly adjusted with 0.1% shifted from Paradigm Shareholders to Future Core Contributors and Advisors.

Team Unlocks — Performance & Time Based

Historically, aligning teams and communities in crypto has been a challenge. The Paradex team plans on changing that by introducing a community-aligned, performance-based unlock mechanism — designed to demonstrate their long-term commitment and alignment with the community.

80% of the team allocation will be governed by Performance Based Unlocks, while the remaining 20% will follow a time-based schedule. The team is also subject to vesting schedules that will complete in 2027 and 2028. Paradex plans to share details of the performance-based unlock mechanism they are designing with the community prior to the initial listing to ensure full transparency.

Paradigm Shareholder Unlocks

Paradex was incubated by @tradeparadigm, the largest institutional liquidity network for crypto options. Paradigm facilitates over $1B daily trading volume (>$520B in lifetime volume), capturing 30% of the global crypto options market. This unique incubation approach meant that Paradex didn’t need to raise venture capital while providing the team immediate access to deep industry expertise, technical and capital resources needed to focus solely on building a superior product.

Paradigm shareholders, which include many of the largest trading firms in the world, have received a 13.4% allocation of the total supply. They will be active participants in the Paradex Network — both as traders and as contributors to its growing ecosystem.

Update: Paradigm Shareholder lock ups have been revised since the release of this blogpost. Please refer to the “DIME Tokenomics Update: Maximizing Long-Term Community Alignment” post for full details.

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3. The Road Ahead

Paradex’s 2025 development roadmap is structured around three fundamental pillars:

Full Decentralization

The Paradex Network currently operates as a Stage 0 Rollup as defined by L2BEAT. During this transitory period, critical security primitives like validity proofs from our zk-stack, components such as transaction sequencing, upgrades, and infrastructure still rely on centralized control. Paradex is committed to transforming the Paradex Network into a fully decentralized ecosystem, built on a public and permissionless blockchain, with no central components and by delegating governance matters to the community. This will be a multi-stage process, first moving to a Stage 1 Rollup and eventually to a Stage 2 Rollup later in 2025. Concurrently, Paradex will open-source all components of the Paradex Network’s stack — including the web app, risk engine, chain, backend stack, APIs and opening the Paradex Chain to external developers in 2025.

Core Infrastructure (Bridging and Oracles)

Cross-chain Interoperability is a central part of the long term vision for the Paradex Network. An upcoming Hyperlane integration will enhance bridging capabilities and cross-chain interoperability significantly. Next, the implementation of fast withdrawals, isolated margin capabilities, and an internal spot oracle system to enable instant asset listings, will make the flagship exchange more responsive to market opportunities in real time.

User Experience & Privacy

The exchange will soon expand its product suite to include Perpetual Options and Spot Margin Trading, and add multi-collateral support to enable users to leverage stablecoins, crypto, and synthetic dollars as margin in their account. Next, an integration with Paradigm will significantly improve liquidity by introducing an intent-based RFQ protocol, while a partnership with Privy will enable streamlined social login capabilities. Soon, vault improvements will support multi-strategy capabilities and structured product vaults, featuring advanced options strategies such as Covered Call Vaults, Straddles, and Strangles. Finally, the implementation of zk-based position privacy will ensure user positions remain private, a critical feature for the long-term scalability of on-chain finance.

Since beta mainnet launch in February, Paradex has processed over $50 billion in trading volume. While this early adoption is encouraging, the continued dominance of centralized exchanges underscores both the challenge and opportunity ahead: to build truly accessible and decentralized financial infrastructure. The DIME genesis event is just the beginning. Our vision is for DIME to power an open financial system across the multi-chain universe, with the Paradex Chain at its epicenter. The launch of DIME is just the beginning — a small step toward a larger mission of building a permissionless, on-chain financial system.

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Stay Shizo ;)