Author: Castle Labs
Compiled by Deep潮 TechFlow
DeepChain Summary: Perpetual contract trading volume is already 4.7 times that of spot, yet decentralized exchanges hold only a 13% share. Hyperliquid dominates the space with 56% of open interest, and its true advantage isn't technology—it’s enabling crude oil trading over weekends. This report breaks down the design philosophy battles between dYdX, GMX, and the new generation of players, which is crucial for understanding the next growth driver in on-chain derivatives.
This excerpt is from our research report on the perpetual futures trading ecosystem, focusing on comparing differences among perpetual futures trading venues in design, marketing, and microstructure. It highlights key growth drivers within the perpetual futures ecosystem, the underlying architectures upon which protocols are built, and the distinct market strategies employed by each.
On most major exchanges, perpetual contract trading volume is 4.7 times that of spot trading and has accounted for over 82% of the total cryptocurrency trading volume over the past 30 days.
Perpetual contracts have become one of the most important products in the crypto space because they allow users to maintain (leveraged) price exposure without holding the underlying asset.
For highly liquid crypto assets like BTC and ETH, perpetual contracts have long demonstrated their powerful potential. Now, as more asset classes begin trading on-chain, the value of this product is further amplified.
Perpetual contract trading still primarily occurs on centralized exchanges, with trading volume exceeding $4.56 trillion over the past 30 days, compared to just $614.5 billion on decentralized exchanges. This gap is even larger than in the spot market, as decentralized exchanges' trading structures are more oriented toward spot trading.
In this article, we will delve into on-chain perpetual contracts and provide additional context for the development of the entire sector.
The early landscape of perpetual contracts was dominated by players such as dYdX and GMX.
Each product has distinct features that remain clearly visible even after adjustments.
dYdX is built on the Cosmos SDK and was among the first protocols to recognize verticalized value and choose to become an application chain adopting a central limit order book.
dYdX migrated from StarkEx to its own Cosmos application chain. From a strategic perspective, this move made sense for the team, as the application chain provided greater control, higher decentralization, and self-managed infrastructure. However, for traders, this decision introduced additional friction in the form of cross-chain bridging, increased complexity in fund management, and a more cumbersome onboarding process. While cross-chain migration seems commonplace today, it was not so at the time.
In addition, the transition to the application chain has not been without technical challenges, including downtime and validator delays. Decentralized governance has also slowed product iteration and led to decisions that undermined community trust, such as shutting down the token bridge while token holders still held liquidity and assets.
GMX V1 pioneered the GLP model: an asset pool dynamically balanced with assets such as ETH, BTC, and stablecoins, serving as the counterparty to all trades on the platform.
GLP provided a decent solution for bootstrapping liquidity for perpetual contracts in the early stages, but it is not a clean long-term market structure. It concentrates assets into a single pool, making liquidity providers act as counterparties to traders and charging fees to liquidity providers. The cost is that liquidity providers bear the traders’ profits and losses, asset exposure, and inventory imbalance risks.
In short, the GLP model is difficult to scale and bundles excessive risk into a single product. Each new market added increases risk to the same liquidity pool, so open interest limits, fee structures, oracle design, and asset pool composition collectively restrict the expansion of long-tail assets. GLP was never designed to cover long-tail assets; it is suited only for mainstream and large-cap assets. This, in turn, limits demand for the offered assets, as low capital efficiency compresses demand in an increasingly competitive market.
GLP V1 suffered a $40 million hack in 2025 due to a reentrancy vulnerability, further eroding depositors' trust.
GMX eventually moved away from GLP toward the V2 and GLV models, offering greater flexibility and capital efficiency. Due to its inherent design, asset pool-based models are naturally less flexible than order book models when it comes to launching new markets and scaling horizontally.
Nevertheless, other projects have adapted and utilized this model: Hyperliquid has adopted the Hyperliquidity Provider (HLP), while Variational has adopted the Omni Liquidity Provider (OLP).
The potential market size for perpetual contracts has always been large. However, early models were unable to effectively scale liquidity, making it difficult to compete with centralized exchanges, so most users still choose to trade perpetual contracts on centralized exchanges.
This landscape remains unchanged today, but the share of perpetual contract trading on decentralized exchanges has grown from 4% in 2024 to over 13%.
The current peak occurred in December 2025, when the share of perpetual contract trading volume on decentralized exchanges reached over 14.25% of total trading volume.
This macro perspective only tells half the story—and may even seem disappointing. But looking closely at the perpetual futures market, we see sustained growth, especially in 2025.
Although many catalysts drove this growth, the chart above shows trading volume beginning to rise at the end of 2024, aligning with the launch and success of Hyperliquid. We will detail this in the next section.
The latest wave of growth since 2026 can be attributed to a combination of factors: the rise of real-world assets (RWA) enabling trading via perpetual contracts, and the emergence of numerous trading platforms such as Lighter, Variational, Extended, Entropy, and many others mentioned in this report. In fact, following Hyperliquid, more than 261 decentralized perpetual contract exchanges have since launched.
Currently, Hyperliquid continues to lead the perpetual swaps decentralized exchange market with over 56% of the total open interest share, followed by Aster (9.7%), Variational (6.2%), and Lighter (5.7%).
As previously mentioned, this sector was initially dominated by dYdX, followed by GMX. Since Hyperliquid's launch, it has maintained the leading market share, with only a brief period in November 2025 when Lighter briefly surpassed it.
End-of-2025 remains the historical monthly trading volume peak for perpetual contracts, with a slowdown occurring after entering 2026.
The shift in the leading position reflects broader changes in the perpetual contracts market, particularly in terms of support for the listing and trading of real-world assets.
One of Hyperliquid’s most distinctive features—and a key reason it has garnered widespread attention beyond the crypto space—is the role Tradexyz plays in driving asset listings. Tradexyz enables assets that were previously untradeable on-chain to be traded 24/7; at its peak, this segment accounted for 50% of the platform’s total trading volume.
A classic example is crude oil (CL). During the Iran crisis, the United States launched an attack on Iran over a weekend when traditional trading venues were closed. Tradexyz became the only place where crude oil could be traded.
We have prepared a comprehensive microstructure analysis comparing the CL market on Tradexyz with that on CME. Over three weeks, the CL market evolved from a new market into a mature trading venue where traditional financial participants can hedge their exposures.
For us, this is one of the clearest ways to demonstrate the utility of on-chain RWA trading and drive adoption. As a result, many funds, such as Abraxas, have now become devoted users of RWA trading on Tradexyz.
Part of Tradexyz’s success lies in its ability to enable 24/7 trading of RWA assets by defining boundaries. These mechanisms limit price fluctuations to within ± (1 / maximum leverage) of the reference price during non-trading hours.
In the initial weeks of testing the boundaries, the CL market actually reached the 5% limit, at which point trading halted over the weekend. Today, this approach has been battle-tested, and Tradexyz uses re-anchoring to ensure continuous price discovery: once an asset’s price hits a trigger condition (e.g., near a boundary), it can re-anchor and set a new boundary based on that price.
In addition to making previously inaccessible assets available to retail investors, RWA offers an intriguing alternative for traditional financial institutions.
This becomes evident when we examine the top ten assets by perpetual contract trading volume as of September 10, 2026. Seven of the top ten assets are RWA, led by the Nasdaq 100 Index and gold, which together recorded over $1.4 billion in 24-hour trading volume and more than $850 million in open interest.
Therefore, we believe that perpetual contracts have evolved from venues offering leveraged exposure to underlying assets to platforms providing price exposure to assets that were previously inaccessible.
As a result, RWA has become a key component of the perpetual contracts marketing strategy, which we will explore in the relevant section.
Hyperliquid's boost effect
One of the key catalysts for perpetual contracts has been the rise of Hyperliquid. Its airdrop-style TGE strategy, along with its transition from a perpetual contracts exchange to a full-fledged ecosystem, aims to become the "AWS of liquidity," reigniting demand for building these primitives and creating a blueprint others can follow.
What matters isn't just Hyperliquid's trading volume growth—it has redefined the positioning of on-chain perpetual contract trading venues. Before Hyperliquid, on-chain perpetual DEXs were largely seen as front-end trading platforms: on-chain versions of CEX perpetuals with lower custody risk but inferior execution, weaker user experience, and thinner liquidity.
After Hyperliquid, this category has evolved into something closer to a full-fledged trading platform.
Hyperliquid has redefined traders' expectations for on-chain perpetual contract platforms by integrating multiple traditionally fragmented components into one unified system:
HyperCore, a high-performance trading layer for spot and perpetual futures markets.
HyperEVM, the native builder environment around this exchange.
HIP-3 enables builders to deploy new perpetual futures markets, advancing the listing mechanism toward a permissionless market model.
HIP-4 introduces outcome markets, applicable to prediction markets and option-like instruments.
Builder code that enables external frontends to route order flow to Hyperliquid and monetize this distribution channel.
HLP, Hyperliquid's Liquidity Provider Vault, enables passive funds to participate in market making.
RWA frontends (such as TradeXYZ) leverage Hyperliquid's infrastructure to bring stocks and other off-chain exposures into the same trading environment.
Each element contributes to Hyperliquid’s success; together, they place HYPE at the core of these growth vectors, enabling the platform to surpass previous perpetual futures platforms.
HyperCore delivers a core exchange experience for traders: order book trading, fast execution, deep liquidity, and a streamlined interface. HLP provides native liquidity primitives for the platform. HyperEVM offers an ecosystem for builders to construct around. HIP-3 turns market creation into a product and revenue stream. HIP-4 introduces outcome markets. Builder code transforms wallets and apps into distribution partners. TradeXYZ demonstrates how to leverage this tech stack to bring traditional financial assets onto the same trading interface.
These modules enable users to maintain portfolio margin across the platform, allowing them to execute more sophisticated strategies such as simultaneously holding spot and perpetual exposure to both crypto assets and RWA assets, depositing liquidity, and hedging event risks. Last week, Hyperliquid also launched a manual lending feature, allowing anyone to supply HYPE or BTC to borrow USDC and USDT.
In its early growth phase, Hyperliquid followed a model similar to previous perpetual futures platforms: launching reward programs and large airdrops to incentivize users with skin in the game and help build an initial base of loyal traders.
However, unlike many projects, the TGE is just the beginning of Hyperliquid’s growth journey.
Its core lies in high consistency across all levels of the protocol and ecosystem.
This is reflected in its cumulative revenue of over $1.24 billion.
Contrary to common belief, not all revenue comes from perpetual contracts. In fact, spot markets, auctions, priority burns, and HyperEVM gas fees all contribute to revenue, with $HYPE始终处于增长的核心。
Here is how each module contributes.
HLP was strategically significant for the initial launch of HyperCore across multiple dimensions. HLP is Hyperliquid’s market-making vault, where users can deposit funds and run passive strategies.
It played a key role in market liquidity during its early launch and provided an additional retention loop for users who prefer passive strategies over active trading.
HLP provides an initial native liquidity layer, so Hyperliquid does not need to rely on external market makers or external funds.
In several ways, HLP differs from GMX’s GLP model. HLP is more active than a static liquidity basket, reinforcing Hyperliquid’s positioning as a frontend where users can execute diverse strategies.
Ultimately, Hypercore and market-making activities grew to such an extent that HLP was no longer a foundational component and was gradually phased out, although it appears to have seen a resurgence since mid-August 2026, with plans underway to transfer idle HLP USDC into lending to prevent funds from sitting idle.
Using HLP is not without challenges. One such example is the JELLY event in March 2025, when a trader attempted to squeeze the Hyperliquid market by driving up the spot token price while simultaneously holding both short and long positions in the asset. We will discuss this event in greater detail in subsequent sections.
Take the HIP-3 market as an example. Hyperliquid is no longer the sole team determining which markets are important; builders can purchase trading codes through an auction system and deploy perpetual futures markets within the protocol framework, with fees flowing to the token.
In addition, the builder code means Hyperliquid doesn’t have to focus solely on acquiring users—it can also expand horizontally by offering its trading technology as a white-label solution, enabling others to access a perpetual contracts trading engine without building one from scratch.
Builder codes have been extremely successful, demonstrating Hyperliquid's commitment to its backend infrastructure. They have expanded Hyperliquid's distribution channels, generating over $40 billion in trading volume in the past 24 hours, accounting for 7.4% of total volume. Wallets such as Phantom and MetaMask did not build perpetual contract trading infrastructure from scratch; instead, they integrated builder codes, generating over $25 million in revenue for Phantom and over $10.5 million for MetaMask.
Recently, Hyperliquid announced the launch of HIP-4 markets, its binary outcome product, which helps the platform expand into event markets, prediction markets, and options.
To compete in this environment, perpetual contract platforms must operate and iterate faster than ever. Launching new features is not the issue.
Acquiring users is becoming increasingly difficult. The number of active traders is limited, and they are becoming more profit-driven. A trading platform needs distribution channels, liquidity, product breadth, and reasons for traders to keep coming back.
Hyperliquid’s solution is to enable the platform to operate simultaneously across multiple dimensions: trading on the core venue, building on EVM, driving traffic through builder integrations, deploying markets via HIP-3, trading outcomes via HIP-4, or accessing new asset classes through external frontends.
Among the aspects we’ve mentioned, there is an unstated but significant fact: there is a strong alignment between the platform’s success and the HYPE token. This is reflected in the programmatic buybacks—95% of all fees collected by the protocol are used to repurchase HYPE.
To date, the protocol has purchased over $1.26 billion worth of HYPE on the open market.
Hyperliquid is strongly focused on expanding its distribution channels, whether through HIP-3, builder codes, or HIP-4.
A trading venue can generate activity before a token launch. However, maintaining that activity after the obvious airdrop trading ends and profit-seeking capital departs is much more difficult.
For most exchanges, activity peaks before the airdrop, as the product's value remains uncertain. Examining Hyperliquid demonstrates how token alignment, execution, and proper distribution can create a deeper flywheel, propelling the project’s narrative far beyond the TGE.
Many protocols are attempting to replicate this model, but it remains uncertain whether they can catch up to Hyperliquid’s trajectory.
Conclusion
On-chain perpetual contracts are rapidly expanding, with open interest at historic highs. These platforms have overcome multiple design challenges, from low blockchain throughput that cannot support order books to scaling liquidity to accommodate institutional-grade volumes.
The on-chain perpetuals ecosystem has evolved, with most activity shifting from previous leaders like dYdX and GMX to Hyperliquid, Variational, and Lighter. This evolution has brought different architectural choices, with these platforms exploring and introducing a new growth lever to these markets: RWA perpetuals trading.
Platforms like TradeXYZ have not only introduced traditional financial assets but also enabled 24/7 trading, dominating active price discovery when traditional markets are closed—as we saw earlier this year during the Iranian strikes.
Most of this growth can be attributed to Hyperliquid, which controls over 56% of the on-chain open interest and has revitalized the perpetuals landscape by converting trading volume into broader token alignment and a virtuous cycle.
On-chain perpetual contracts are still in their early stages, but their growth is impossible to ignore. Hyperliquid has demonstrated that decentralized trading venues can compete with centralized exchanges on nearly every metric. Additionally, on-chain trading platforms are focusing on expanding distribution—whether through consumer-facing applications or partnerships—making their growth inevitable.
We have expanded our coverage to include more on different protocols and design approaches in the perpetual contracts space. We also conducted a microstructure analysis comparing execution quality on CEXs and DEXs. See the full report here.