Is Arkham also going to do Perp DEX? On November 6, the news of '$ARKM soon launching its derivatives trading platform' caused a brief surge, breaking through $2.1, with a 24-hour increase of over 20%. Arkham itself did not originate from DeFi; the project's initial positioning was as an artificial intelligence on-chain analysis tool. Arkham uses AI to collect, classify, and display a large amount of on-chain data through the Arkham panel, providing data that was previously only accessible to blockchain analysts and enthusiasts, thereby increasing the transparency of on-chain data. It is important to note that although the newly announced perpetuals exchange and Arkham Intel exchange are both exchanges, they are entirely different matters.
AI seems to be a universal vest, applicable everywhere. While Arkham's entry into the DeFi track based on its AI data platform certainly has its inherent advantages, why is it transforming to Perp?
Why is everyone getting into Perp?
On one hand, market liquidity has shifted from centralized exchanges like CEX to on-chain. Retail investors holding previously listed altcoins are still stuck, while the true altcoin season has begun on-chain. Altcoins on exchanges are still going through 'reverse hundred-fold' movements; even though Bitcoin has reached a new high of $75,000, these altcoins are still capped at previous highs. In contrast, new tokens on Solana like Jin Dog and others are constantly emerging, and even Binance has had to list these native meme tokens. Wherever there is a wealth creation effect, there is liquidity.
On the other hand, CEX not only has slow coin listings and imposes trading restrictions in different regions, but most importantly, it has launched a series of 'VC tokens' with severely unfair chip structures. Recently, the CEO of the cryptocurrency investment consulting firm Moonrock Capital stated on Twitter that, 'Binance requires a potential project to provide 15% of its total token supply to ensure its listing on a centralized exchange, which accounts for 15% of the total token supply, valued at about $50 million to $100 million.' As a result, major KOLs on Twitter initiated discussions on coin listing fees.
Regardless of how the coin listing fees are, a vicious cycle has formed in the eyes of many retail investors, where 'VC-project-CEX' collude to list coins, create sell-offs, and trap retail investors. Thus, compared to the stagnant waters of secondary listing tokens, users are forced to embrace on-chain, where at least the ecological position of retail investors is relatively fair. As the old saying goes, 'fair, fair, or xxx fair.' To some extent, CEX's 'self-inflicted wounds' have given these on-chain players room to grow.
Who are the major players in the market?
The current Perp DEX space seems to be getting as crowded as Ethereum L2. Besides well-known leading projects like dydx, Hyperliquid, and Jupiter, there are also a dozen or so Perp DEXs barely maintaining lifelines. Due to the lack of liquidity, it has now largely devolved into a tool for speculative arbitrage. I will analyze them one by one in order of market share.
Hyperliquid
Hyperliquid stands out among many Perp DEXs and is undoubtedly the market leader from various data dimensions. It currently occupies about 25% of the entire Perp DEX market share.
Hyperliquid not only has a solid foundation but also has improved trading performance. In May this year, it introduced the HyperBFT algorithm for optimization, increasing trading speed to the level of 10-20 WTPS. At the same time, Hyperliquid chose to build a low-latency, high-throughput Perp DEX application chain.
Moreover, Hyperliquid's operations are quite clever. When Hyperliquid launched its spot function, it airdropped meme token PURR to the platform's early users. While many CEXs had yet to react to on-chain meme tokens, Hyperliquid had already 'taken the initiative' to launch the corresponding spot.
However, Hyperliquid has not issued a token, so it has little voice in the Chinese community. Most of the attention comes from the English community's 'value discovery'.
Jupiter
As the leading DEX aggregator on Solana, Jupiter naturally inherits the massive traffic on Solana. Jupiter will find the best price routes among all major DEXs and AMMs on Solana, capable of minimizing slippage and trading fees, thereby improving trading efficiency for users. Although Jupiter offers various functions such as spot trading, DCA investment, and limit order trading, the most popular remains Perp trading. Among them, the perpetual contract trading supports half of its fee revenue.
Jupiter's native token $JUP is also very popular and loved by the community. JUP holders can stake for voting dividends, and JUP has potential for price appreciation, allowing holders to benefit both ways. With a solid foundation and positive community reputation, Jupiter occupies about 10% of the market share.
SynFutures V3
SynFutures was initially deployed on the Ethereum Layer 2 Blast, but as Blast faced community criticism and significant ecological loss due to its overly inflated 'Pinduoduo' points, SynFutures 'moved' to the Base chain in July this year. Currently, SynFutures has become the largest on-chain derivatives trading platform on Base. With Bitcoin breaking $80,000, the market is gradually recovering. The trading volume and TVL of SynFutures V3 have also begun to hit new highs.
On November 6, SynFutures launched the industry's first issuance platform focused on the derivatives market, Perp Launchpad, on Base. Project parties only need to provide initial liquidity using their project tokens to launch the corresponding perpetual contract market. At the same time, SynFutures established a $1 million Perp Launchpad incentive program, providing award support for new projects through trading competitions, market promotion, and community activities.
dydx
As a project frequently mentioned by people, dydx was seen as a hundred-fold token by many KOLs at the beginning of the bull market. However, both its fundamental performance and the price of its token DYDX have been disappointing. Consequently, many early players in the community have turned to FUD dydx, which can be said to be 'deep love leads to harsh criticism'. dydx's market share barely maintains around 6-7%, already at the end of the mainstream tier.
As the first project to emerge in Perp DEX, dydx saw its TVL peak at nearly $1.2 billion in 2022. However, after the market entered a deep bear phase, it has been unable to recover, even during the mid-bull cycle of 2024. Despite the recent hot on-chain market, its TVL continues to decline. Only when it announced pump plans did the token DYDX rise 20%, barely benefiting from this meme wave. On October 10, dydx founder Antonio Juliano announced his return and reassumed the role of dyadx CEO, followed by layoffs and restructuring. The market is also looking forward to the founder's return and reforms to lead dydx out of its current predicament.
Arkham
Arkham perpetuals exchange will offer users 0 fees for limit spot and contract trading (i.e., Maker). For market order trading (i.e., Taker), the fee reduction will be determined based on their holding of $ARKM and trading volume. If users choose to pay fees with ARKM, they will receive a 25% fee discount. Users can earn points by trading on the Arkham perpetuals exchange. VIP users who open an account can increase their total points by 10%, and the points on Arkham Intel exchange will still be valid.
However, Arkham's operation model for perpetuals is no different from other perpetual exchanges. It attracts initial users through points or fee discount models, but these users merely treat the perpetual DEX as a mining tool and do not represent real effective traffic. Let's take a look at Aevo, the shining star of perpetuals in March this year.
After Aevo announced its airdrop details in March this year, its TVL and trading volume reached their peak. Subsequently, TVL continued to decline, and trading volume began to plummet on a weekly basis, with actual trading volume down by 80% after one month. From a data perspective, most participants in Aevo's trading were on-chain 'freebie hunters', with real users being exceedingly scarce. After losing the attraction of token airdrops, the inflated traffic data was ruthlessly punctured by the market. Ironically, its token price also fell by nearly 90% after the airdrop.
The points program and fee reductions can certainly attract a large number of users in the early stages of the platform, but how to retain 'real users' relying on 'real products' and 'real business' after such 'mining-like' activities end, avoiding the steep decline in various data that Aevo faced, is the challenge that Arkham perp will face next.
What is the current state of the perp market?
Although Perp DEXs are also trying various product innovations, not only offering spot, lending, betting, and per-launch products, but also incorporating order books and auctions in liquidity design, and even putting effort into UI and memes, however, the path for perp DEX is not so smooth. Even leading Hyperliquid finds it difficult to compete with Binance. According to Dune data, Hyperliquid's trading volume accounts for only 1/9 of Binance's spot trading volume.
In the current decentralized perpetual contract space, almost every L1 and L2 supports its own Perp DEX in order to complete the 'DeFi full package'.
However, the decentralization of public chains leads to fragmented liquidity. Under the same roof, how can there be complete eggs? This is true for public chains and for Perp as well. Dispersed liquidity makes it difficult to achieve scale efficiency. If inter-chain liquidity can be interconnected, then Perp can enjoy sufficient liquidity like CEX, and only then will the entire Perp DEX market welcome a true leader. The multichain universe's configuration seems to shackled the ceiling of Perp's development like iron chains.
On the other hand, the audience of Perp DEX is mostly risk-takers. The advantages of Perp compared to CEX are fast coin listing, a variety of coins, and flexible products, which have a natural attraction for high-risk speculative groups. Therefore, the target audience is inherently smaller than that of CEX. Moreover, centralized exchanges like OKX, Bybit, and Bitget are also continuously getting involved in the pre-market segmentation, competing for market share with Perp DEX. On the road to securing a seat at CEX and competing for market voice, Perp DEX has a long way to go.
