KiloEx: The Journey to Becoming a Killer DEX

목차

1. Introduction

2. KiloEx, a next-generation perpetual exchange offering efficient liquidity utilization and a direct user reward structure
2-1. Hybrid Vault – An innovative liquidity system delivering efficient capital deployment
2-2. UX Seamless UX: Convenient gas fee settlement and one-click trading that lower entry barriers
2-3. Reward mechanism and tokenomics: Designing a real profit structure

3. Why the Future of KiloEx Looks Promising 
3-1. The potential of the BSC ecosystem and KiloEx as its direct beneficiary
3-2. Maximizing UX and platform participation via expanded reward design

4. Closing Thoughts – Expected to Emerge as the Core Infrastructure for the On-Chain Derivatives Ecosystem

 

 

1. Introduction

In the early 1800s, Chicago—located in northeastern Illinois—was nothing more than a small rural town. However, the opening of a canal connected it to the eastern United States, turning Chicago into the gathering point for major grains (such as corn, wheat, and oats) grown in the American Midwest. These commodities were then transported via the Mississippi River and the Great Lakes waterways to the East and South. Thanks to these geographic advantages, Chicago quickly transformed into a bustling marketplace where farmers, merchants, and consumers converged, and it soon emerged as the epicenter of the American agricultural economy.

As agriculture and transportation markets grew, however, the volatility of grain prices became a significant issue. During harvest seasons, oversupply would cause prices to plummet, while in off-seasons, scarcity would drive prices sharply upward. Moreover, crop yields were heavily influenced by unpredictable factors like weather and natural disasters, making it extremely difficult for farmers to predict the selling price of their harvests in advance. Conversely, merchants found it challenging to forecast the purchase price of grains arriving months later. This entanglement of price uncertainty, supply risk, and contract breaches rendered agricultural trading highly inefficient.

Source: Wikipedia (View of a canal in Rockport, New York)

To address these problems, the Chicago Board of Trade (CBOT) was established in 1848. CBOT introduced a standardized futures contract system that clearly defined the quantity, quality, and delivery schedule of commodities, ensuring that trades occurred on a reputable exchange. A futures contract is an agreement to buy or sell an asset at a predetermined price on a specified future date. The simple concept of “locking in a price now and delivering later” provided both farmers and merchants with tangible solutions by offering price stability and predictability.

Over time, the futures market evolved to serve two main roles. One role is as a hedging tool—allowing farmers and merchants to protect themselves from future price fluctuations. The other role is speculative, as investors can leverage their predictions of future prices to potentially secure high returns. Thus, the traditional futures market began as an institutional solution to reduce price uncertainty, and over time it expanded into a diverse array of asset classes as financialization progressed.

The reason for recounting the history of the futures market in this introduction is that it is now being reimagined with blockchain technology. In the volatile and speculative crypto market, there has always been a steady demand for derivatives that provide leverage and risk hedging. This has led to attempts to implement decentralized solutions. Unlike traditional markets, on-chain perpetual futures markets—characterized by their no-expiration structure, smart contract-based automation, and brokerless trading—are emerging. Readers interested in learning more about the implementation of futures trading on the blockchain are encouraged to refer to Section 1-1 of “SynFutures v3, Unleashing Derivatives for Everyone.”

KiloEx is a project that has emerged amidst this evolving landscape. It is garnering attention for its high user experience and capital efficiency. The KiloEx team is composed of professionals from global crypto exchanges such as Binance and OKX, endowing them with extensive experience in operating futures exchanges. Moreover, KiloEx positions itself as the leading futures exchange within the BSC ecosystem—a market with the 5th highest crypto market capitalization, significant user numbers, and ample capital. In this report, we explore how the traditional concept of futures trading is being reinterpreted on the blockchain and assess the potential of KiloEx within this market.

 

2. KiloEx, a next-generation perpetual exchange offering efficient liquidity utilization and a direct user reward structure

Before diving into KiloEx itself, it is important to briefly review the structural characteristics of perpetual futures exchanges. Futures exchanges can be structurally classified into four types based on capital efficiency, pricing mechanisms, and slippage management:

• Order Book Model: Similar to traditional financial exchanges, this model directly matches buy and sell orders. It offers minimal slippage and precise price discovery with high capital efficiency; however, it may struggle with low-liquidity assets and requires high network performance. dYdX and HyperLiquid are examples of this approach.
• vAMM Model: This model forms prices via a fixed formula (X*Y=K) within a liquidity pool. In the context of futures—where actual asset delivery is not involved—the vAMM serves merely as a virtual curve for price discovery. It provides a decentralized trading environment and requires lower network performance compared to the order book model, though it may be vulnerable to slippage and can experience price discrepancies with external markets due to the impossibility of risk-free arbitrage. Perpetual Protocol and Drift employ this method.
• Hybrid Model: Developed to overcome the limitations of earlier models, this approach combines AMM and order book methods to balance capital efficiency with price stability. It primarily operates on an order book basis, but when liquidity is insufficient, it leverages an AMM to concentrate liquidity within a certain price range. However, integrating multiple structures increases system complexity and technical implementation challenges. SynFutures is a representative example of this model.
• Liquidity Pool Model: In this model, prices are obtained via an oracle and trades are executed at a fixed price, with the liquidity pool automatically assuming the counterparty risk for traders. While slippage is limited due to reliance on external oracles, the pool faces significant risk based on trader profits and losses. GMX and KiloEx are examples of this approach.

2-1. Hybrid Vault – An innovative liquidity system delivering efficient capital deployment

KiloEx operates not by matching orders on an order book, but through a liquidity pool model in which the funds deposited in the Vault serve as the counterparty for traders. When a user opens a long position, the Vault takes on exposure in the opposite (short) direction. In this setup, the asset’s price is determined via an oracle service, and users can transact directly with the Vault without experiencing slippage. Liquidity providers share in the profits or losses of traders, functioning not merely as passive depositors earning fees but as active market participants.

While this structure is efficient, it carries a risk: if traders collectively realize gains, the assets locked in the Vault could experience rapid losses. To mitigate this risk, KiloEx has designed a Dual-Pool structure that splits the Vault into a Base Pool and a Buffer Pool.

• The Base Pool is composed of the liquidity deposited by users along with a portion of platform fees, forming the foundation for stable LP earnings.
• The Buffer Pool separately accumulates traders’ profit-and-loss (PnL) and funding fees. When traders incur losses, funds accumulate in the Buffer Pool; conversely, when traders profit, payouts are drawn from this pool.

The Buffer Pool acts as a cushion to delay risk exposure to the Base Pool. In the short term, losses are absorbed by the Buffer Pool first; only if it is depleted does the Base Pool face risk. Additionally, to safeguard against sudden market shifts, any funds in excess of a set threshold in the Buffer Pool are automatically reallocated to the Base Pool, further enhancing liquidity stability.

A core feature of KiloEx is its Hybrid Vault. This system allows for the mixed deposit of various chain-based assets (such as USDT, USDC, FDUSD, STONE, stETH, slisBNB, etc.), which facilitates liquidity acquisition. Each asset is managed with its own Loan-to-Value (LTV) ratio and health factor, allowing for flexible risk management. Furthermore, some assets are linked to external partners—such as Binance’s launch pool—which offer APY Boost features to provide additional rewards to users.

In summary, KiloEx’s Hybrid Vault is not merely a “pool” for collecting assets. It is an effective on-chain liquidity system that:

1. Integrates in real time with trader transactions,
2. Provides flexible risk management based on mixed assets, and
3. Interfaces with external incentive programs.

However, in the case of the liquidity pool model, it is exposed to risks such as oracle issues and hacking. Investors should be aware of these risks before making deposits.

Due to the structural nature of the liquidity pool model, positions can only be formed up to the amount of assets locked in the Vault. Thus, the scale of liquidity significantly impacts the overall trading environment. For a futures exchange to achieve sustainable growth, it is essential to provide clear and sufficient rewards to liquidity providers, thereby designing a virtuous cycle where increased trading leads to higher revenues. In this context, KiloEx’s Hybrid Vault alleviates some of the chronic limitations inherent in liquidity pool models and represents a design with the potential to drive platform growth. Recent increases in TVL serve as a signal that this structure is functioning effectively.

2-2. Seamless UX: Convenient gas fee settlement and one-click trading that lower entry barriers

The on-chain derivatives market has advanced rapidly on the technical front, yet significant challenges remain in terms of user experience (UX). Most DEXs present high entry barriers due to requirements like wallet connections, multisignature approvals, slow transaction speeds, and the need to pay gas fees. For beginners, even basic questions—such as “What is gas?”, “Which token should I prepare?”, or “Why must I keep signing?”—can deter entry.

KiloEx has recognized these issues and introduced Fast Trading mode to bring the speed and intuitiveness of centralized exchanges (CEXs) on-chain. Fast Trading offers the following features:

• Convenient Gas Fee Settlement: Operating on the ERC-2771 meta-transaction model, Fast Trading allows users to sign transaction messages without broadcasting directly to the network. Instead, a Relayer and Trusted Forwarder handle the actual execution and gas fee payment. As a result, users don’t need to hold separate gas tokens or pay gas fees for each trade—the fees are later automatically settled from collateral assets (such as USDT or USDC). This streamlined structure simplifies the user experience while preserving on-chain security and transparency.
• One-Click Trading: At the heart of Fast Trading is the combination of a dedicated one-click trading wallet and a meta-transaction framework. Users create a 4-digit PIN only once and sign it with their wallet. The locally generated exclusive EOA key is then used by the 1CT Wallet, enabling subsequent transactions to occur automatically without additional wallet signatures. In essence, users can open a trading position with just a single click, dramatically enhancing speed and ease compared to traditional methods.
• Self-Custody: Fast Trading does not require users to transfer assets to a separate custody wallet. Users retain full control of their assets in their personal wallets and can revoke Fast Trading wallet permissions at any time.

UI/UX similar to that of centralized exchanges (Source: KiloEx)

2-3. Reward mechanism and tokenomics: Designing a real profit structure

KiloEx’s reward system goes beyond simple token distribution. At its core are the base token, $KILO, and a deposit token, $xKILO, which is convertible on a 1:1 basis. These two tokens complement each other and form the foundation of KiloEx’s profit distribution and incentive design.

Users deposit $KILO to receive non-transferable $xKILO. Holders of $xKILO are regularly allocated 30% of all revenues generated on the platform (including fees from opening/closing positions, funding fees, and copy trading earnings) in real assets (e.g., USDT). More than just a reward mechanism, $xKILO serves as the center of decision-making and profit-sharing within the KiloEx ecosystem.

To convert $xKILO back to $KILO, users must set a vesting period ranging from a minimum of 15 days to a maximum of 80 days. During this period, 50% of the total amount is automatically staked in a pool, allowing users to receive additional $xKILO and USDT rewards in real time. Notably, users can independently choose their vesting period and exchange ratio, enabling strategic decisions between securing short-term liquidity and maximizing long-term rewards. The token distribution reflects a long-term perspective as well: KiloEx’s total token supply is 1 billion, with 27% allocated for ecosystem rewards, 20% for the team, and 10% distributed via airdrops.

This incentive design not only outlines token rewards but also provides users with meaningful, tangible profits and encourages long-term participation. The method of distributing profits in real assets, combined with the integration of vesting and automatic staking, and a conversion mechanism that prioritizes user autonomy, demonstrates that KiloEx has built a unique position in both technological innovation and economic design.

However, there are some limitations in this tokenomics structure. In terms of initial circulation and community allocation, it may seem relatively conservative compared to projects like HyperLiquid that prioritize community-centric distribution. Moreover, while the conversion mechanism between $KILO and $xKILO effectively promotes long-term engagement, the fact that assets are locked for a set period could present an entry barrier for new users. Overcoming these challenges—whether through improved onboarding strategies or structural mechanisms that encourage continuous engagement—remains an ongoing task.

 

3. Why the Future of KiloEx Looks Promising

KiloEx is showing impressive on-chain performance. In early 2024, its TVL was around $10 million, but by April 1 it had surged to approximately $47 million—a 4.7× increase—placing it at 11th among global futures exchanges.

Source: DeFiLlama

Moreover, its average daily trading volume has consistently hovered around $100 million, demonstrating that the protocol is driven by ongoing user activity rather than just one-off inflow events. These figures indicate that KiloEx has simultaneously secured market credibility, strong user loyalty, and scalable growth potential.

Source: DeFiLlama

3-1. The potential of the BSC ecosystem and KiloEx as its direct beneficiary

Every blockchain ecosystem has a flagship futures exchange that represents its potential, and the growth prospects of these exchanges are generally closely tied to the expansion and activity within the chain itself. In fact, when examining the top futures exchanges by TVL, most operate on major chains such as Solana, Ethereum, and Arbitrum. Projects like Jupiter (Solana), Ethereal (Ethereum), Drift (Solana), and GMX (Arbitrum) serve as prime examples—demonstrating that the potential of a futures exchange is ultimately influenced by the size and vibrancy of its underlying chain.

What is particularly notable is that KiloEx has established itself as a futures exchange operating within the BSC ecosystem, actively leveraging the user base and capital of BSC. As of April 1, BSC boasts a TVL of approximately $5.17 billion, with an overwhelming on-chain presence—around 7 billion cumulative transactions and about 530 million wallet addresses. According to Token Terminal, BSC has also ranked 4th in blockchain network revenue over the past 180 days, trailing only Solana. Furthermore, the BSC ecosystem is tightly connected to Binance’s extensive user base, resulting in significantly lower entry barriers compared to app-chain-based DEXs, particularly in terms of wallet setup, network switching, and learning curves.

In addition, KiloEx isn’t just benefiting from the ecosystem—it also enjoys a unique position as a project supported by Binance Labs. KiloEx was recognized as the “Most Valuable Project” in the 6th MVB Incubation Program in 2022, and it subsequently secured investments from Binance Labs, earning accolades for its product quality, execution ability, and market insight. This connection with ecosystem-centric VCs not only highlights its technical compatibility but also establishes a robust long-term growth foundation.

Source: DeFiLlama

KiloEx is also aggressively expanding its user base and liquidity pools beyond the BSC ecosystem by pursuing multi-chain expansion. This approach reduces dependency on any single chain while offering flexible, optimized services tailored to the trading communities and liquidity characteristics of each chain. In particular, the rapid scalability observed on Layer 2 solutions such as opBNB and Base demonstrates KiloEx’s technical agility and its ability to execute a multi-chain strategy effectively.

As a result, KiloEx has secured a stable starting point based on the core utility of the BSC, while simultaneously diversifying its growth drivers—spreading user acquisition, liquidity, and partnership benefits across multiple chains. This structure positions KiloEx to capture new inflow opportunities from various chains and plays a critical role in achieving both decentralized governance and expanded liquidity.

Networks Supported by KiloEx (Source: KiloEx)

3-2. Maximizing UX and platform participation via expanded reward design

KiloEx extends beyond simple trading incentives by gamifying user participation and encouraging diverse activities within the ecosystem. Its design is a strategic incentive system that not only drives one-off events but also supports continuous growth and long-term user retention.

A prime example is the Airdrop Alliance Battle, which featured total prizes of approximately 440 million KRW. In this event, users formed teams—either by creating a new team as a team leader or by joining an existing one—and competed by accumulating trading volume. This team-based competitive format fostered community collaboration and spurred heightened participation and trading activity. During the event, the daily active wallet (UAW) count rose to 19,620, with a total of 122,740 transactions recorded, explosively boosting user engagement within the KiloEx ecosystem. This structure, which combines robust rewards with a community-centric competitive format, has been instrumental in achieving early user acquisition and enhancing brand recognition.

KiloEx’s reward design extends beyond one-time events. Its fee cashback voucher system reimburses a portion of the fees paid during trading in USDT the following day. VIP users benefit from higher voucher percentages, and the rebate amount increases with trading volume. This design effectively boosts satisfaction and retention among frequent traders. Additionally, the VIP Onboarding Program allows users with significant trading records from other exchanges to submit their transaction histories to KiloEx, thereby receiving equivalent VIP fee benefits—a “soft landing” strategy that helps new users acclimate without fee burdens.

Furthermore, KiloEx is actively expanding its reach beyond the platform through its Affiliates Program and VIP Onboarding Program. The Affiliates Program enables social channel operators or key opinion leaders (KOLs) to earn up to a 55% trading fee rebate by inviting users via referral links. Depending on trading volume, additional rewards in USDT and KILO are granted, incentivizing community leaders to promote KiloEx widely. Compared to other exchanges, KiloEx’s Affiliates Program is highly aggressive, making user acquisition significantly easier. For instance, GMX offers rebates of 5–15%, Binance around 20%, and OKX about 30%.

Ultimately, KiloEx encompasses:

1. Event-driven short-term user engagement (TGE Carnival),
2. A trading-centric reward structure (vouchers and cashback),
3. Sustained retention design (VIP tiers), and
4. A community-based expansion strategy (Affiliates Program).

This integrated approach expands the reward system both vertically and horizontally, making KiloEx a noteworthy case of designing an on-chain ecosystem built on genuine user participation rather than mere trading incentives.

 

4. Closing Thoughts – Expected to Emerge as the Core Infrastructure for the On-Chain Derivatives Ecosystem

The blockchain-based futures trading market is evolving beyond a mere experimental stage into an independent sector. In particular, perpetual futures are increasingly reflecting the unique volatility and leverage demand of the crypto market, as user experiences once concentrated on centralized exchanges gradually transition on-chain. KiloEx stands out in this landscape by leveraging its competitive Hybrid Vault system—which overcomes the inherent limitations of liquidity pool models—its meta-transaction-based Fast Trading, and its real asset-backed profit-sharing tokenomics. These innovations go beyond simple technical implementations, delivering tangible benefits from a user perspective.

KiloEx also benefits from its origins in the BSC ecosystem, effectively leveraging the chain’s robust user base and capital. BSC continues to be recognized as one of the top five global chains due to its low transaction fees, high TPS, and Binance-driven user acquisition channels. KiloEx has firmly established itself as a leading futures exchange within this environment, driving ecosystem growth in tandem with BSC. Moreover, its multi-chain expansion strategy further broadens both liquidity and its user base, suggesting that KiloEx is well positioned to share in the growth of the on-chain futures market.

That said, there remain challenges to address. Although KiloEx has maintained steady trading volume since its successful user-acquisition trading contest in April last year, the total number of users and transactions has been gradually declining, indicating that current trading activity is predominantly driven by a small group of whale users. Continuous strategic adjustments are needed to attract a broader, long-tail user base.

Nonetheless, based on its structural innovations and user-centric design, KiloEx has presented a sustainable growth model and established itself as a key alternative in the futures market. If liquidity expansion across multiple chains and enhanced UX for retail users continue in parallel, KiloEx is well positioned to not only evolve beyond a conventional futures exchange but also to become the core infrastructure of the on-chain derivatives ecosystem.