Crypto-native assets decline as perpetual contracts rise

Even a beginner can sense that the crypto industry is undergoing a generational shift.

Over the past decade, the most critical capability in the crypto space has been asset issuance—launching a blockchain, a token, a governance token, and an economic model, then promoting it to the market through narratives, airdrops, liquidity incentives, and community consensus, passing the buck.

We once boldly hypothesized that blockchain would create an entirely new asset system: new currencies, new financial protocols, new gaming assets, new social networks, and even new forms of organizations.

However, these native assets are now heading toward a slow death, making every attempt to buy the dip feel like trying to stop a cart with your arms.

The old assets—U.S. stocks, U.S. Treasuries, gold, oil, indices—draw away liquidity and attention.

The main players on-chain have changed; native assets are being ignored, while mapped assets are thriving.

In every bear market, people say “ETH is done,” “no one buys altcoins anymore,” “no one uses DeFi,” but why does ETH at $2,000 feel more绝望 than ETH once at $200?

Because what lies behind the complaints is no longer fluctuations in price cycles or shifts in narrative themes, but a migration of industry function—the crypto industry is transitioning from being a “new asset factory” to becoming a “global asset channel.”

Stablecoins are the earliest and most successful example. The widespread adoption of USDT and USDC clearly does not represent cryptocurrency surpassing the dollar, but rather the crypto industry finding a more efficient on-chain way for the dollar to circulate.

Over the past decade, countless projects have proclaimed the goal of creating a new monetary system, but only stablecoins have been widely adopted by users around the globe. Beyond us speculative traders, ordinary users aren’t obsessed with discovering a new global currency—they simply want the dollar to move faster, cost less, and be less restricted by time or geography.

Looking back, the fate of crypto-native assets had already been decided in advance.

The ultimate large-scale validation of blockchain is not as a store of value, not as governance, nor any kind of complicated financial innovation, but rather the original peer-to-peer transfers and global settlement—Satoshi Nakamoto lives on.

Beyond Bitcoin, the store-of-value function of other cryptocurrencies has been disproven; these assets exhibit extreme volatility, minimal cash flow, ambiguous governance, and demand driven entirely by speculation.

After all the twists and turns, the market has returned to the fundamental functions of blockchain: transfers, settlements, cross-border flows, collateralization, and trading.

The awkwardness of native crypto assets—also known as memecoins—becomes clear within this logic.

When hot money floods in, we compare assets within the crypto space and pick one we like to go all in. We compare blockchains by TPS, DeFi protocols by TVL, and memes by community hype. Everyone is swimming in the same narrative pool, with few real-world anchors—each story has room for imagination, and as long as it’s packaged grandly enough, a new token can pre-emptively inflate its valuation by a decade.

But now, the internal narrative is exhausted, and the wealth effect from outside is widespread—covering one’s ears while stealing a bell is no longer effective.

On one side, real-world assets like U.S. stocks, gold, and oil are brought together on a single on-chain trading interface; on the other, AI has entered everyone’s lives in a way that feels almost like science fiction becoming reality.

Once, the crypto world excelled at telling stories about the future, gaining valuation premiums through a sense of futurism—talking about new networks, new finance, new organizations, and new production relations. But years later, the narrative remains confined to whitepapers, roadmaps, funding news, and token prices. Meanwhile, beyond powerful narratives, AI has become a tool available at a moment’s notice on everyone’s computers and phones.

Previously, a altcoin only needed to tell a more compelling story than another altcoin; now, it must contend with two types of external competitors: traditional assets with actual cash flow, asset backing, and global pricing systems, and new tech-cycle AI projects that combine future narratives with real-world products.

These worthless tokens with no revenue, no demand, and no value capture look truly out of place beside NVIDIA, Micron, oil, and AI applications.

The recently frequently discussed "Ethereum issue" should also be viewed within this framework.

Ethereum is not only facing short-term pressures on its roadmap and liquidity—it is also confronting the complete erosion of the "native asset worldview" it once represented.

While traditional mapped assets enter the blockchain, AI dominates the global tech narrative.

Ethereum remains a critical infrastructure for on-chain finance and asset issuance, but without the faith and ideological support of its native crypto ecosystem and worldview, ETH's ability to capture value from its own ecosystem is severely limited. Users can pay on Base, trade on Arbitrum, transfer assets between rollups, and even trade U.S. stocks on-chain—but they certainly don’t need to hold ETH to do so.

The same is true for DeFi. Its original grand narrative was to rebuild the financial system, but very few real, lasting needs have actually taken root.

Users don’t need an entire on-chain banking system—they need cheaper dollar transfers, faster settlement, deeper liquidity, and price volatility to trade. Lending, DEXs, and yield aggregation still exist, but they’re increasingly becoming part of the infrastructure, no longer able to independently drive the industry’s imagination. The “financial Legos” narrative is a relic of the previous cycle.

In the crypto space, we must admit that on-chain finance doesn't need to reinvent NVIDIA, nor does it need to reinvent the dollar—and of course, we don't have the capability to do so anyway.

We just need to work to make these assets more freely transferable, tradable, collateralizable, shortable, leveraged, and combinable into new financial structures.

So when people say the crypto market is dead, they mean the era of relying on the continuous expansion of native assets has come to an end.

No one dares to claim that the crypto industry will disrupt traditional finance anymore; now, practitioners are busy equipping traditional finance with a new transport layer. Stocks are still stocks, but through new infrastructure, they can now offer 24/7 trading, global liquidity, on-chain settlement, permissionless access, and composability. The industry is fully focused on building a new API for the old world.

Actually, listing US stocks on-chain, RWA, or on-chain perpetual contracts are nothing new.

This industry didn't just today think of bringing traditional assets on-chain, nor did it just today think of trading everything with perpetual contracts.

Several years ago, the market saw a wave of Perp DEXs, synthetic assets, on-chain stocks, and projects attempting to bring traditional assets onto the blockchain. Looking back at the designs of some early protocols, one finds that their underlying mechanisms are not fundamentally different from those of many popular projects today.

This is why some veteran traders looked down on Hyperliquid and missed out on the opportunity—Kyle Samani’s ongoing skepticism toward Hyperliquid is a classic example.

He’s not unfamiliar with this—it’s just that he saw it too early and too often, and he’s grown tired of it. Five, eight years ago or even earlier, many in the industry tried to build on-chain contract exchanges, decentralized derivatives, and full-asset trading platforms, but all of them failed.

I recently came across the article we published on Odaily in 2020 about the PerpDEX project, and to be honest, the mechanism is identical to today’s.

Screenshot of an article from 6 years ago

The issue is never about direction, always about timing.

Hyperliquid initially had a clunky experience, mediocre liquidity, and faced heavy criticism over regulatory risks, but it consistently rode the wave of change and emerged as the biggest beneficiary—leaving later entrants far behind.

The first wave was the CEX-like transformation of on-chain perps. Hyperliquid’s earliest breakthrough wasn’t just creating another on-chain Perp DEX—it made on-chain contract trading feel anything but DeFi, and instead more like a centralized exchange. Order books, low latency, APIs, rebates, ecosystem frontends, HYPE airdrops, no VCs, and community wealth effects—all combined to transform it from just another on-chain protocol into a trading hub. This stage wasn’t glamorous, but it was critical: the hardest part for any trading platform is securing that first wave of liquidity. Once traders show up, market makers follow, and only then can the platform attract larger asset volumes.

The second wave was the shift in trust after October 11. The black-box risks of centralized exchanges were once again exposed; since then, many whales have preferred to openly compete on-chain with everyone rather than be ambushed in the opaque, dark forest system where opponents’ true identities remain hidden. “Decentralization” is not just a slogan—it’s a practical need for traders to “die knowing why” during extreme market conditions.

The third wave is the volatility of macro assets such as gold and crude oil. Wars and geopolitical conflicts have pulled global markets back into a macro narrative, prompting users to seek a platform for 24-hour trading of global assets. Traditional markets are burdened by opening and closing hours, regional restrictions, and account limitations, whereas on-chain perpetual markets carry none of these constraints.

The fourth wave is the explosion of U.S. stock trading without needing further elaboration. When popular assets are placed into a 24/7, global, low-barrier perpetual market, the assets themselves attract traffic, and that traffic draws in B-side market makers and ecosystem front-ends; market makers and front-ends, in turn, enhance liquidity, setting off a snowball effect.

So understanding early doesn’t guarantee big results—we all know that back then, on-chain users were insufficient, wallet experiences weren’t mature enough, market-making infrastructure wasn’t well-developed, and asset volatility lacked sufficient external opportunities. Without wind, even building a large ship won’t take you anywhere—it’ll just sit stranded.

Finally, let’s talk about the greatest invention in crypto—perpetual contracts.

Trading spot U.S. stocks involves a full suite of complex issues, including compliance, custody, underlying asset mapping, trading hours, settlement, equity rights, dividends, and corporate actions. Each step requires interaction with the traditional financial system and can become a bottleneck.

However, for U.S. stock perpetuals, the platform only needs to create a contract pool based on price, with liquidity provided by ecosystem partners; users trade price exposure without directly holding the underlying equity.

It bypassed the heaviest part and focused on the most traded segment.

This is also precisely what makes it dangerous: Perp reduces assets to a single price symbol you can bet on, compressing complex ownership relationships into long or short positions and leverage multiples. It doesn’t care whether you own the stock or understand the company’s value—it only cares whether the price moves, and whether someone is willing to go long or short.

This is also what makes it most vibrant and captivating.

People may not truly want to own NVIDIA, but they want to trade its volatility; they may not truly want to hold gold, but they want to bet on its direction; they may not need oil, but they might seek the risk exposure that oil prices provide.

Perp has taken this demand to its extreme. It doesn’t create new assets, only new casinos; it doesn’t provide ownership, only exposure; its goal isn’t to reimagine the financial world, but to turn every asset into a “price” that can be traded 24/7.

So if we look back at the entire history of cryptocurrency in the future, the product that will truly remain is probably Perp.

From a financial perspective, it’s almost absurd. Futures have settlement dates because, historically, assets eventually need to return to the real world; perpetual contracts eliminate settlement, turning a product with a finite term into one that exists indefinitely. This is likely the ultimate revelation after the crypto space flooded the market with worthless assets.

Traditional exchanges have opening and closing times because markets need breaks; perpetual contracts eliminate downtime, keeping the market always open. Traditional finance relies on brokers, clearinghouses, and regional regulatory systems, while perpetual markets are inherently borderless.

Perpetual contracts may be the most successful and most dangerous financial innovation in crypto history, truly like a financial monster unleashed by demons. (Arthur Hayes: So what?)

Countless people have been liquidated because of it, countless fortunes have vanished because of it, and it has amplified humanity's most greedy impulses. But at the same time, it has created unprecedented liquidity and price discovery efficiency.

Looking back, years have flown by—the most successful currency in the crypto space is the US dollar, the most successful asset is Bitcoin, and the most successful application is trading. Today, the most "highly anticipated new growth" comes from the US stock market.

This is the failure of idealists, more likely the market ultimately completing its selection.

The story of having seen the vast ocean is old news; humanity’s pursuit of wealth, appetite for risk, and fascination with leverage have never changed. Today, the crypto industry is no longer obsessed with inventing new assets, but rather seeks to turn existing assets into always-on, globally accessible, permissionless trading pairs.

The crypto market is dead, Perp lives on.