The Cardinal testnet competition ran from October 29 to November 12 on Arbitrum Sepolia. Over two weeks, 864 traders took Yield Perps through every kind of BTC market, pushed $257.2 billion in notional volume, and sent us plenty of incredible feedback.

This was the first time anyone outside the team traded Yield Perps at scale, and it was the perfect battleground to see how the product would perform in the real world. Hundreds of sophisticated strategies, from hand-placed trades to API bots, went looking for the secret to a blowout win. Here’s how it went and what comes next.

The competition in numbers

• Traders: 864, with 284 trading on two or more days
• Positions opened: 24,795
• Notional volume: $257.2B, on $226.6M of margin
• Peak open interest: $1.9B notional
• Daily active traders: 96 on average
• LP net: +$2.4M in testnet funds

Activity opened strong, with 75 wallets trading on the first day—a strong sign for a small and scrappy community—and continued steadily in the first days of the competition. By November 3, word seemed to have spread beyond our core group of supporters, surpassing 100 traders in a day, and reaching about 700 traders with $84B in volume by the end of the first week.

The biggest single day was November 8, when 161 traders opened 10,280 positions and pushed $105 billion in notional volume, about 40% of the competition’s total. Open interest peaked that evening at $1.9 billion notional. This rounded out a strong second week and intense leaderboard competition, ending with $257.2B in total notional volume traded.

The winners

Winners have been finalized after a review of results to ensure a fair competition. The top three take home DRV:

• 1st place: 0x403a…46be, 10,000 DRV
• 2nd place: 0x79d0…80d1, 2,000 DRV
• 3rd place: 0x06da…1ff5, 1,000 DRV

Everyone in the top 20 also gets early access to mainnet. Places 4 through 20, in order: 0x5b56…d314, 0x3018…180c, 0x44e9…bfd1, 0x60ff…cddf, 0xd17d…5678, 0x1355…a7aa, 0x2711…a8a3, 0xbcb8…dd46, 0xca5e…a2c5, 0x7cf0…5aec, 0xcdf1…f84d, 0xdc2b…de9e, 0x2366…0d30, 0xa6ce…41c3, 0x5c69…cd92, 0xf532…6282, 0xee14…a6de.

Some of the most instructive trades didn’t come from the top of the leaderboard. On October 31, one trader caught a roughly 4.5% downward move in BTC over a day and farmed 111,000% APR. It came down to picking the direction of a trend and sizing leverage to how fast it was developing.

LP performance

Every Yield Perp has the LP pool on the other side. Over the competition, the pool profited $2.4 million in testnet funds, from entry fees and funding net of everything it paid out to traders. The winner took home $770,213 in testnet dollars. These results encouraged us the most, indicating strong profitability for LPs while still providing opportunity for big wins for talented traders.

That return came with the risk management Yield Perps are built around. From 1x to 10x, Cardinal hedged the book’s net exposure with listed options on Derive. From 25x up, the pool underwrote positions directly, with the maximum payout of every position reserved before each funding epoch began.

Fine-tuning before mainnet

Cardinal made several parameter adjustments during the competition to fine-tune payouts and keep the competition fair, bringing us valuable information about how our parameters performed and how our infrastructure would stand up to abuse. No significant issues were identified, and every small adjustment was implemented quickly, with almost no downtime for traders.

While sending a product to mainnet always requires constant monitoring and response to ensure a smooth experience for both traders and LPs, the overall result could not be more encouraging. Cardinal's product and infrastructure, including the Arbitrum Sepolia network and our LP's hedges on Derive, gave an excellent performance. Mainnet is on the way.

Community feedback

Your feedback in Discord shaped a lot of what comes next. These requests came up most often:

• Conditional close and open. A way for a position to close automatically once price moves out of its condition, so it doesn’t keep paying funding while you’re away from the screen. While Yield Perps require something beyond traditional stop-losses, these features will accompany a mainnet release.
• More assets. ETH, SOL and other markets came up again and again. As Yield Perps build, liquidity and reputation, these assets and many more can be offered by building on Derive's options market.
• Better charts. Longer price history and more timeframes, from 30 minutes up to several hours. Some improvements were already made to Cardinal's charts, including an upgrade from a line chart to candlesticks. We'll continue to build on these improvements.
• Finer leverage control. More steps between 1,000x and 5,000x, or the option to type in an exact leverage.
• Clearer costs and payoffs. More detail on funding and entry fees, and a payoff chart when you re-centre a position. Detailed data about Cardinal's markets are your trades are a top priority as we move to mainnet.
• A better API. Bot builders sent detailed reports on endpoints and funding data that helped us tighten the API during the competition. We'll continue to build more features for the increasing community of dev and AI traders.

Many of these improvements have already begun implementation, while others will be integrated into our long term product design goals. We thank all our traders for the detailed testing and feedback you provided.

What’s next

The competition showed us what Yield Perps can do with real traders on them, and where our efforts should be focused. It also gives us confidence that our next step is preparing the product for a mainnet launch. Between now and then, we’re looking to expand the product, strengthen our team, and refine everything you stress-tested over the last two weeks.

The testnet product and API are still live. Trades no longer count toward the competition, but you can keep testing strategies at cardinal.trading and building on the API, which is covered in the docs.

Make your move

Join us as we build the next generation of financial products.

• Start trading with Cardinal on Arbitrum Sepolia today.
• Join the Discord for support, feedback, and updates.
• Follow Cardinal on Twitter for news and announcements.