Technological Innovations and Market Competition of Perp DEX: A Discussion on the Opportunities and Challenges of On-Chain Perpetual Contract Exchanges
Decentralized Perpetual Contract Exchanges (Perp DEX) have become one of the most vibrant areas in the DeFi ecosystem. Not only have annual trading volumes reached new highs, but innovative platform strategies and products are also emerging incessantly. On-chain researcher Jason Zha deeply analyzes the development context, platform competition, and future potential of Perp DEX, revealing key trends in the on-chain derivatives market.
From dYdX to Hyperliquid: The Evolution of Perp DEX
The origins of Perp DEX can be traced back to 2019 when dYdX pioneered an on-chain order book-based perpetual contract trading model, laying the foundation for the decentralized derivatives market. Subsequently, GMX introduced a Liquidity Pool structure, and the controversial Hyperliquid, with its HLP Vault takeover mechanism, rapidly rose through innovative technology, further enriching market forms. These platforms have stimulated significant on-chain liquidity and user participation through AMM, Vault, arbitrage, and hedging strategies.
Hyperliquid adjusted the BTC and ETH leverage limits after HLP issues, emphasizing the market competitiveness of data transparency.
Diverse Strategies and Ecological Expansion: High APR and Arbitrage Opportunities Attract Capital Influx
Jason Zha points out that the prosperity of Perp DEX is inseparable from complex and innovative financial strategies. For example, Jupiter JLP’s Delta Neutral hedging strategy once provided an annualized return exceeding 100%, attracting numerous investors. Additionally, platforms like Drift and taoli.tools offer strategy modules and automation tools, empowering users to activate arbitrage and risk control, further strengthening the overall ecosystem.
Market Status: Hyperliquid Dominates, Competitors Lag Behind
Dune data shows that by 2025, the average weekly trading volume of Perp DEX will reach $8 billion, still far below the approximately $300 billion of CEX platforms like Binance, but exhibiting strong growth momentum.
(Deep Insights)
Jason Zha further summarizes the characteristics of various platforms:
dYdX: Professional trader-oriented, using an order book model, stable fee income.
GMX: Emphasizes decentralization and liquidity provider rewards, liquidity pool mechanism.
Hyperliquid: Market leader, high depth and liquidity structure attracting users, but with potential centralization risks.
Jupiter: High APR and strategy flexibility, appealing to yield-oriented users.
Fee Income Reveals Potential: Is Perp DEX a “Money Printing Machine”?
Jason Zha also compiled last year’s data, showcasing the impressive fee income performance of Perp DEX platforms:
GMX: Estimated fee income of about $100 million in 2024, totaling over $400 million since product launch.
Hyperliquid: Estimated to generate $250 million in 2024, with cumulative revenue around $295 million, reaching $45 million in the first quarter of 2025.
dYdX: Estimated fee income of $50 million in 2024, with cumulative revenue of about $85.2 million.
These figures indicate that despite being smaller than CEX platforms, Perp DEX still possesses strong potential in profitability and user stickiness.
(Annual Report of dYdX: DEX Derivative Trading Volume Expected to Reach $3.48 Trillion in 2025, U.S. Regulations as a Major Driving Force)
Existing Challenges: Perp DEX Lacks Long-term Competitive Advantages
Even in a booming market, many observers point out potential risks:
Lack of long-term moats, making it susceptible to intense competition.
If platforms fail to continuously align with actual DeFi needs, they may lose their core value.
On the other hand, Jason Zha also notes that the role of Perp DEX as the foundation for on-chain financial strategies is becoming increasingly clear, with the potential to launch more programmable and modular products in the future, allowing for more immediate and effective value capture.
The Mainstream Path of Perp DEX
In the long term, Perp DEX, as an important part of DeFi infrastructure, is attracting the attention of global traders and developers due to its transparency, user-controlled funds, and rapid deployment capabilities of innovative financial tools. However, without building lasting differentiation through technical barriers, user habits, capital networks, and governance mechanisms, it will ultimately fall into an endless competition of “mechanisms, fees, and subsidies.” As the ecosystem matures, Perp DEX is expected to continue expanding its market influence after 2025, pushing blockchain derivatives into mainstream financial visibility.
Risk Warning
Cryptocurrency investment carries high risks, and its prices may fluctuate dramatically, leading to the potential loss of all principal. Please assess the risks cautiously.
