Why does every blockchain suddenly need its own perp deck?
In crypto's latest infrastructure race, blockchains compete to host sustainable futures exchanges. While centralized platforms continue to dominate, many are now launching or creating decentralized derivatives markets.
Derivatives comprise the majority of today's crypto trading activity, often accounting for the entire volume. On Tuesday, according to CryptoQuant, Bitcoin (BTC) spot trading volume reached 55,230 BTC while the exchange volume reached more than 506,600 BTC.
According to Nina Rong, Development Executive at BNB Chain, Perpetual Decentralized Exchanges or perp DEXs act as the core infrastructure for traders, market makers and institutional participants as they provide access to valuable products.
“When these players move on-chain, they bring liquidity, hedging activity and arbitrage flows, which greatly increases the overall size of the onchain and strengthens the ecosystem's business environment,” she told Cointelegraph.
While several blockchains are exploring their own starting points, launching one does not translate into meaningful or sustainable business activity. Liquidity of derivatives has historically been concentrated around a few major exchanges rather than being spread evenly across platforms.
Blockchains are starting to build or spawn their own DEXs
The logic is pretty straightforward. If derivatives drive a large share of crypto trading volume, perp DEX can help you attract more trading activity to a blockchain.
“In many ways, it has become a competitive race: the chains that host the largest successful platforms are the most likely to attract and sustain the highest volume of business within their ecosystem,” Rong said.
For BNB Chain, that platform is Aster. On Thursday, it had the second-highest open interest among DEXs, according to DiFilama. Rong said the addition of Ester helped BNB maintain its market share.
Instead of waiting for an outside group to choose the network to build on, some chains are actively looking for perp DEXs. One such example is Decibel, which went live on the Aptos mainnet on February 26.
“What you're seeing in the crypto ecosystem in general is that different L1s and different blockchains are starting to think about what exactly uses block space,” said Briley Manley, head of the Decibel Foundation.
“Many L1 teams are realizing that they are in a better position to understand the mechanics of their chain and build applications on top of them,” he said.
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Whatley added that Decibel itself was not part of the recent rush to build PaperDX on the blockchain. Aptos has been growing Decibel for about a year, months before HyperLiquid, Aster and Liter battled for market dominance.
Liquidity tends to concentrate around key areas.
Launching a perp DEX does not guarantee an eternal source of liquidity. According to Stefan Lutz, CEO of BitMEX, derivatives trading has historically tended to be concentrated around a few platforms.
“All markets (variables and spot) rely on market makers and strong risk management systems. These participants often favor platforms that already have liquidity and a track record,” Lutz told Cointelegraph.
This means that in the long run, it is ineffective to identify trading positions by chain or coin. Since traders often trade in different chains and coins, we believe that consolidation is a natural process.
A similar scenario has played out in traditional financial markets over the past three decades. The shift to electronic trading in the 1990s led to a wave of exchanges and alternative platforms entering the market. Increasingly, according to research published by the Bank for International Settlements, liquidity often re-concentrates around areas with deeper order books, lower spreads and more reliable infrastructure.
The Chicago Mercantile Exchange (CME) controls most of the US futures market in TradFi. The intercontinental exchange is led by energy derivatives and the Eurex exchange is the main venue for European futures.
In crypto, most Bitcoin and Ether (ETH) derivatives trading has historically been concentrated on a few exchanges such as Binance, OKX, Bybit and Deribit. More recently, decentralized platforms such as HyperLiquid have emerged as key players in the future of perpetual motion.
Centralized exchanges still offer advantages such as order processing, risk management, currency exchange and trading infrastructure, while fully on-chain platforms are limited by block time, which leads to delays and slippage, Sidra Fariq, head of retail sales at Derbit, told Cointelegraph.
“In addition, centralized exchanges can provide more privacy, which can be important for institutional traders,” he said.
Meanwhile, proponents of onchain exchanges argue that a decentralized and integrated approach allows derivatives liquidity to be incorporated into certain ecosystems.
Related: Why Institutions Still Choose Ethereum Despite Faster Blockchains
“Your order book is blockchain-based and verifiable, and order matching follows the price-time priority set by the blockchain itself,” said Decibel Mantle.
“When you send an order, you know exactly how it's being matched and that it's actually going into the order book instead of being taken somewhere else,” he said.
The “U” shape of derivatives markets
The long-term picture may depend on whether perp DEXs vary across networks or simply repeat similar products. According to Rong of BNB Chain, networks that offer unique features can have an advantage.
“Chains win by offering unique product opportunities or unique business locations that aren't available anywhere else,” she said. But if similar platforms pop up all over the place, “the result will probably be fragmentation into multiple ecosystems rather than one central hub.”
At the same time, market volatility may eventually push liquidity into a smaller set of positions. Lutz brings together market makers and professional traders from BitMEX where they can efficiently deploy capital and manage risk across multiple assets without jumping between platforms.
“If liquidity is more spread across multiple derivatives platforms, it often leads to wider spreads and more volatile markets,” he said.
That dynamic, Lutz says, can lead to cyclical patterns for ecosystems that experiment with their own platforms.
“We expect a U-shaped technical liquidation development in each ecosystem,” he said, where new areas see high activity initially before the momentum dies down.
Continuous futures markets now influence where liquidity is generated, how traders hedge risk, and which platforms control trading activity. As blockchains compete to host those markets, initial transactions are becoming the core infrastructure for crypto ecosystems.
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