Variational Omni daily volume breaks 1 billion! 0 transaction fees yet earns 300% annually reveals the secret.

Variational Omni is a decentralized perpetual contract platform on the Arbitrum network, with a 24-hour trading volume surpassing 1 billion USD for the first time on Sunday. The platform's RFQ system aggregates liquidity from multiple sources, offering zero fees, low spreads, and fast execution across hundreds of markets, with an open interest of 165 million USD.

Columbia's Double Genius Starts a New Venture from Qu Capital to Genesis

(Source: Variational)

The two core founders of Variational Omni, Lucas Schuermann and Edward, trace their campus collaboration back to Columbia University. Founder and CTO Lucas studied at Columbia University's School of Engineering, graduating in 2019 as an Egleston Scholar, an honor typically awarded to the top 1% of students in the entire school, while simultaneously pursuing a degree in Computer Science and Mathematics at the undergraduate level.

The head of quantitative research, Edward, also comes from Columbia University, majoring in Applied Mathematics. Academically, he is grounded in Bayesian statistics, but his actual research focus has gradually shifted towards quantitative trading. In 2017, after meeting at Columbia, they co-founded Qu Capital, a small quantitative investment and research firm registered in New York, specializing in uncovering inefficiencies in the digital asset market. Their technical route is “self-developed high-speed trading infrastructure”: more stable exchange connections, smarter smart order routing, and more refined execution tools.

This “small but specialized” boutique team was acquired by Genesis Trading on September 19, 2019, marking Genesis's first external acquisition, with the valuation undisclosed. Among the three co-founders of Qu Capital, Lucas and Edward subsequently joined Genesis in core technical and quantitative positions. Genesis Trading was founded in 2013 and is part of Barry Silbert's Digital Currency Group (DCG), being one of the earliest Bitcoin OTC market makers serving institutional clients.

However, after the FTX collapse, Genesis took a sharp turn for the worse. In 2022, Genesis's substantial exposure to Three Arrows Capital (3AC) and FTX triggered a liquidity crisis, leading to its lending division applying for bankruptcy protection on January 19, 2023. In May 2024, the court approved a liquidation plan, expected to return about $3 billion to customers. The combination of concentrated exposure and settlement risk raises the question of how it magnifies into systemic shocks during extreme market conditions. For Lucas and Edward, who experienced all of this firsthand, this is a problem that needs to be addressed and serves as the source of Variational Omni's design philosophy.

After leaving Genesis in 2021, Lucas and Edward co-founded Variational, continuously iterating in machine learning, quantitative market making, and decentralized derivatives design. In 2024, Variational officially completed a $10.3 million seed round financing, led by Bain Capital Crypto and Peak XV Partners, with participation from Dragonfly Capital.

0 Fee Backed Spread Profit Model

(Source: Variational)

Variational Omni has fundamentally changed the business model of Perp DEX, turning itself into the only market maker, profiting by internally digesting all market making revenues. When you initiate a quote on the platform, their OLP (Omni Liquidity Provider) will give you a quote, which includes the bid-ask spread. The spread you pay is their source of income, rather than any transaction fee.

In the past, DEXs had to pay external market makers to provide liquidity while also charging traders fees to maintain operations. Variational Omni is clever because it acts as its own market maker, keeping all the spread profits in its own pocket, which allows it to offer users zero fees. This is somewhat similar to Payment for Order Flow in stock trading, but it is more transparent and efficient when moved on-chain.

The profit formula of OLP seems uncomplicated: Net Income = User Payment Spread - External Hedging Costs. When you open a position on Variational Omni, OLP immediately performs a reverse trade on on-chain DEXs like CEX or Hyperliquid to hedge against risk. Due to the Variational team's institutional-level volume and VIP rate advantage, its hedging costs are typically only 0-2 basis points, significantly lower than the 4-6 pips charged to users, thereby ensuring a stable profit margin.

According to data released by the platform, OLP achieved an annualized return of over 300% during the period from April to July 2025. This astonishing return rate mainly comes from three factors: the relatively small initial treasury size, rapid growth in volume, and efficient hedging strategies. However, whether such returns can be sustained is a question. As the treasury size increases, market competition intensifies, or in the face of extreme market conditions, the hedging costs may exceed the income from the price differences.

Therefore, Variational Omni has implemented a series of risk control mechanisms, such as the Last-Look rejection mechanism (which allows for quote rejection during extreme volatility), independent settlement pools to isolate risks (where risks from different markets do not cross-contaminate), and an algorithmic dynamic hedging system (which adjusts hedging strategies based on market conditions).

515 Token Automatic Listing and Loss Return Mechanism

(Source: Hyperliquid)

The automated Listing Engine of Variational Omni is one of its killer features. Traditional DEXs need to coordinate with external market makers and wait for liquidity providers to market new assets, a process that often takes several days or even weeks. In contrast, Variational Omni eliminates coordination delays through internal market making via OLP, allowing new assets to receive liquidity support immediately once they pass automated review.

The system's intelligent security review mechanism greatly reduces the risks of malicious contracts such as “honey pot Perp” through automatic contract bytecode analysis and distribution analysis, allowing the platform to securely support a large number of long-tail assets. As of now, Variational Omni supports 515 tradable tokens, making it essentially the Perp DEX with the most listed tokens. In comparison, Hyperliquid supports around 200 tokens, and GMX supports even fewer.

At the same time, Variational Omni has designed a complete on-offline closed-loop mechanism, continuously monitoring asset indicators. When assets fall below the maintenance indicator, automatic delisting will be triggered, closing positions and delisting at the EWMA settlement price to avoid zombie contracts occupying resources for an extended period. This automated management is particularly important at the scale of 515 tokens.

The unique benefit for users is the loss refund mechanism. When users close a losing position on the Variational Omni platform, the system automatically triggers a random lottery program, giving users up to a 5% chance to immediately receive a 100% refund in USDC. These funds come directly from the spread profits of OLP, with one-sixth of OLP's spread income allocated to a dedicated Loss Refund Pool smart contract. Once the VAR token is officially issued, the platform plans to use 30% of the protocol revenue for token buybacks and burns, creating a complete value capture cycle.