Author: jay
Compiled by: Jiahuan, ChainCatcher
Perpetual contracts ("perps") are futures contracts that never settle. As a crypto-native innovation, they experienced an explosion on-chain in 2025. Today, they have become one of the largest markets in the crypto space, covering traditional assets with trading volumes reaching trillions of dollars.
Last year, the trading volume of perpetual contracts settled by top centralized exchanges reached $86.2 trillion (a 47% year-on-year increase), while the growth of on-chain perpetual contracts was even more astonishing: leading decentralized exchanges (DEX) reached a trading volume of $6.7 trillion (a 346% year-on-year increase). Currently, DEX trading volume accounts for about 7.8% of centralized exchange (CEX) volume, whereas just over a year ago, this proportion was only around 2.5%. [Note: While a few US-regulated centralized platforms offer US investors products similar to perpetual contracts, all centralized and decentralized exchanges restrict US investors from trading true perpetual contracts.]
But more importantly, perpetual contracts are gradually shedding their image as a marginal crypto-native primitive and beginning to demonstrate the transformative power to reshape trading behavior and market structure fundamentally.
So, what is driving the popularity of perpetual contracts? Why now? The following will explore why global traders are increasingly favoring perpetual contracts, the scale of the market opportunity, and the opportunities seen by builders.
A Brief History and Evolution of Perpetual Contracts
The idea itself is actually older than the crypto industry. Theoretically, perpetual contracts existed as early as 1993, when Nobel laureate Robert Shiller proposed perpetual futures contracts, initially conceived as a tool to hedge against real estate value risks. But it wasn't until 2016, with the rise of BitMEX and XBTUSD (the longest-running Bitcoin perpetual swap contract), that perpetual contracts became popular in the crypto space.
A decade later, modern exchanges now offer perpetual contracts covering stocks, indices, commodities, interest rates, startup valuations, and even the price of Nvidia's H100 GPUs.
For years, perpetual contracts have been a multi-billion dollar revenue engine for centralized exchanges. As retail demand for leverage has grown, perpetual contracts have become the primary venue for short-term price discovery, liquidity, and trading activity—in many large Asian CEXs, their volume is multiple times that of spot trading.
What changed in the past year and a half is that decentralized perpetual exchanges began to meaningfully eat into the perpetual market share of CEXs. With the structural advantage of self-custody, perpetual DEXs are rapidly closing the gap with CEXs in terms of liquidity, performance, and features for active traders.
With the breakthrough success of perpetual DEXs like Hyperliquid, leading crypto wallets and applications began to support perpetual contracts and launched high-quality trading experiences, reaching millions of users. In the second half of 2025, the front-end for perpetual DEXs exploded—ranging from casual mobile apps to complex multi-venue trading terminals.
Hyperliquid, in particular, pushed the boundaries of what a DEX can offer through HIP-3 (Builder-Deployed Perpetuals). This mechanism allows anyone to permissionlessly launch a perpetual market on the exchange. With HIP-3, builders can list almost any asset and earn a 50% fee share while managing their own oracles and risk parameters.
At the same time, new entrants and competitors like Avantis, Lighter, Ostium, and Variational have emerged or accelerated product development. Increasing competition has forced perpetual DEXs to differentiate in exchange design, market structure, asset support, and permissionlessness, and has led some platforms to find strong product-market fit in new categories like real-world asset (RWA) perpetuals.
For years, perpetual traders only speculated on crypto assets—BTC, ETH, SOL, and various long-tail altcoins. But late last year, when perpetual volume cooled significantly from recent peaks amid a broader crypto market sell-off, RWA perpetuals began to gain traction. A few perpetual DEXs listed commodities, stocks, and stock indices, expanding the universe of tradable assets to include Nvidia, Samsung, even private companies like SpaceX, and commodities like silver and palladium.
This year, the growth of RWA perpetuals has accelerated further. In recent weeks, RWAs have accounted for up to 44% of Hyperliquid's total volume, and RWA pairs have consistently become some of the highest fee-generating pairs on the exchange. On Ostium, RWAs have constituted the vast majority of the exchange's volume for months.
Decentralized exchanges have excelled at facilitating price discovery for RWAs like crude oil, especially on weekends when traditional exchanges are closed.
With the takeoff of RWA perpetuals, we see more companies developing products and businesses related to perpetual contracts. In the past 6 months alone, new exchanges, trading interfaces, market deployers, and liquidity providers have emerged.
Players flooding into this space include brand-new startups, startups pivoting to perpetuals, and some of the world's largest fintech companies integrating perpetual trading into their existing products.
All these diverse players are converging on the same opportunity: perpetual contracts have the potential to become one of the dominant trading instruments in global finance.
The Market Opportunity for Perpetual Contracts
Stepping back to look at traditional finance (TradFi), options are one of the largest and most actively traded markets globally. They exist in currencies, stocks, indices, commodities, and ETFs, and are extremely powerful and expressive tools that enable people to trade based on many different predictions: timing, volatility, price ranges, etc.
But if you zoom in on retail trading behavior, you find a huge amount of activity concentrated in a specific category of options: short-term, leveraged, directional exposure. A prominent example is 0DTE (zero days to expiration) options—traders pay a small cost to bet on high-magnitude intraday moves.
This type of trading is one of the fastest-growing option categories. In 2025, average daily volume for 0DTE SPX (S&P 500 Index) options reached 2.3 million contracts, up 51% year-on-year, accounting for 59% of total SPX option volume. Responding to this demand, the market introduced several new daily-expiring index products, including CBTX and MBTX Bitcoin ETF index options, and options on the equal-weight Cboe Magnificent 10 Index.
So, while options have many sophisticated uses—structured hedging, volatility trading, discrete trading, convexity (referring to the asymmetric特性 of收益与风险 : your maximum loss is fixed, but potential gains are theoretically unlimited), etc.—an enormous and growing flow of retail capital is essentially just looking for short-term, leveraged directional exposure. This is precisely the need that perpetual contracts fulfill perfectly.
The trade-offs are real: options excel at defined risk and convex payoffs, and remain the default tool for expressing volatility. Traders can lose at most the premium they pay. With perpetual contracts, the entire margined position can be liquidated. But for the directional leverage that most retail traders actually want, perpetual contracts have several structural advantages:
- Always on. The latest generation of perpetual markets trade 24/7, with no trading hours or market close gaps. For a global, crypto-native user base, continuous access is an expected norm.
- No strike prices, no expiration, no rollover. With a single continuous position, traders don't have to choose parameters, manage expiries, or rebuild positions daily or weekly. They can hold for seconds, months, or theoretically forever.
- Simpler risk exposure. For perps, the primary considerations are price, collateral, and liquidation thresholds. For options, even if you're right on direction, you can lose due to time decay, implied volatility changes, and path dependence. Perps strip out this complexity. The trade is a pure expression of directional conviction.
- Capital efficiency for continuous exposure. Short-term options require paying the full premium upfront and rolling over repeatedly. Perps require margin—often a fraction of the notional value—which is typically more capital efficient for intraday to multi-day directional positions.
Options aren't going away. They have long been part of financial history and will likely remain dominant for a significant subset of trading use cases, especially those involving defined risk and more complex payoff structures. But for the huge and growing flow of capital looking for Delta-1 directional leverage, perpetual contracts have already captured trillions in volume and billions in revenue.
This raises the question: as perpetual contracts evolve from niche tool to mainstream trading primitive, where will the value accrue in the tech stack?
In traditional markets, the most valuable companies are often built on top of exchange infrastructure, not at the exchange layer itself. For example, the retail broker Robinhood has a higher market cap than its underlying exchange, Nasdaq.
Whether this pattern holds in crypto—or whether platforms like Hyperliquid, Lighter, or Ostium can accumulate sufficiently powerful network effects at the exchange layer—is one of the most interesting open questions in the space.
Regardless, builder activity is expanding rapidly. We see developer growth in the following areas:
- Customized distribution layers: Vertical or audience-specific frontends that not only present markets but also package narratives, strategies, gamification, or social hooks.
- Market creators and operators (e.g., HIP-3 deployers): Operating a popular market on Hyperliquid essentially gives a deployer a "mini-exchange" without building the most complex exchange infrastructure. Today's deployers may only be scratching the surface of the data or price feeds that could be "perp-ified" in the future.
- Specialized liquidity provision: Market makers focused on long-tail markets, event-driven order books, and cross-venue inventory management.
- Perp-specific data infrastructure: An ecosystem of community-driven dashboards, block explorers, heatmaps, and analytics tools has already emerged around positions, funding rates, liquidations, trader signals, leverage exposure, retention cohorts, etc. More mature, high-quality, real-time data will make the entire ecosystem more transparent and efficient for all participants.
Of course, there are still significant open questions and challenges, spanning distribution, liquidity depth for new trading venues, oracle reliability as asset scope expands, inevitable tail events ("10/10" events), and regulation (which currently restricts US investor access to these products). These are the expected growing pains as perpetual contracts "graduate" from the crypto-native bubble and step onto the main stage of global finance. As the perpetual ecosystem matures, the question is no longer whether perps can scale, but who will build the most valuable applications and infrastructure around them when they do.
