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The Funding: Why perp DEXs are getting VC attention now

The Funding: Why perp DEXs are getting VC attention now

The BlockThe Block2025/10/04 16:00
By:By Yogita Khatri

Quick Take This is an excerpt from the 36th edition of The Funding sent to our subscribers on Oct. 5. The Funding is a fortnightly newsletter written by Yogita Khatri, The Block’s longest-serving editorial member. To subscribe to the free newsletter, click here.

The Funding: Why perp DEXs are getting VC attention now image 0

Perpetual futures, or perps as they’re better known, have long been crypto’s most traded product. Yet decentralized exchanges struggled to gain real traction until Hyperliquid. Earlier platforms like dYdX proved what was possible, but Hyperliquid changed the game — matching centralized exchanges on speed and liquidity without taking VC money. That success has reignited interest across the space, with newer players like Lighter and Bulk now raising funds and putting perp DEXs back in the spotlight.

Hyperliquid’s rise was no accident. The project built a genuinely comparable experience to centralized trading — combining deep liquidity, high-frequency execution, and active community participation, investors said. "Hyperliquid’s breakthrough was building its own specialized Layer 1, an 'appchain,' designed for a single purpose: speed. When your product is speed, you can't have a slow foundation. Add to that a fantastic GTM [go-to-market strategy] that bootstrapped early liquidity, and you have yourself a winner," said Diogo Mónica, general partner at Haun Ventures. Earlier perp DEXs like dYdX and GMX, he added, hit roadblocks because they mimicked CEXs without overcoming onchain limitations such as "shallow liquidity pools, clunky user interfaces, and execution lags." (Haun Ventures recently invested in Lighter.)

Where the revived interest is coming from

VC interest in perp DEXs isn’t new — but it’s heating up again as volumes and revenues surge. As I recently wrote , investors are now focused on backing revenue-generating startups, and exchanges happen to be among crypto’s most profitable businesses. "Most VCs have just caught on to how massive the pot of gold at the end of the perp DEX rainbow can be," said Anirudh Pai, partner at Robot Ventures, which recently co-led Bulk’s $8 million seed round.

With the inflow of institutional capital expected, VCs are betting on who will capture that flow, said Kobie McGlashan, co-founder and CEO of Bulk. "I’m of the firm belief that whoever does…will become the first trillion-dollar company in crypto," he said.

Beyond revenue potential, narrative rotation is also driving interest. The "degen capital" that chased memecoins and prediction markets is moving toward perps now that the former categories have cooled off, said Boris Revsin, general partner and managing director of Tribe Capital. He added that the infrastructure stack itself has matured — faster execution layers, more reliable oracles, cheaper settlement. "The space finally has proof a DEX can scale to billions — that unlocks venture appetite in a way we didn’t see last cycle," Revsin said.

Still, the question is where growth will come from for new players. Revsin expects a “musical chairs” phase, with new DEXs competing for the same onchain traders through bigger incentives and better user interface before they meaningfully dent CEX share. Over time, though, DEXs like Hyperliquid and Lighter are expected to draw users from centralized venues as the market becomes more onchain and traders demand permissionless products, investors said.

Risks, challenges, and staying power

The path forward is far from easy. The biggest challenges for new perp DEXs revolve around distribution, liquidity aggregation, and differentiation. Many new players rely on token rewards or airdrops — once incentives end, activity fades. "The challenge for new entrants is building a base that’s not 100% mercenary — you need a real reason for traders to stick around after rewards dry up," Revsin said.

That pressure has already surfaced in the current crop of projects. Aster, backed by YZi Labs (formerly Binance Labs) and endorsed by Binance co-founder and former CEO Changpeng "CZ" Zhao, has recently reported higher volumes than Hyperliquid but faces widespread wash-trading speculation . Data provider DeFiLlama has since delisted Aster. "I consider Perp DEXs among the purest forms of 'show me the incentives and I will show you the outcome,' that exists in markets today," said Bobby Jacowleff, liquid investor at 6th Man Ventures, adding, "Aster's volumes may be as close to 100% inorganic as we've seen on any perp DEX at any time."

"The only reason I wouldn't confidently say volumes go to 0 on the airdrop is due to Aster obfuscating the data required to ascertain how many traders are on the platform," Jacowleff said. Aster did not immediately respond to a request for comment. (6th Man Ventures holds Hyperliquid's HYPE token).

Technical and security risks also loom large for perp DEXs in general. "Like any other onchain project, the largest risk is going to be the hack or loss of user funds due to technical errors in the smart contracts," said Hanson Birringer, managing director and head of U.S. sales at crypto trading firm Flowdesk. He added that, depending on decentralization levels, users may also face oracle or pricing manipulation risks “that are much harder to roll back” than on centralized exchanges.

Over the long run, the perp DEXs that endure will combine liquidity, sustainable tokenomics, and strong communities. Revsin said survivors will “act like platforms, not just exchanges,” generating real fees and ecosystem pull and "not just token bribes." For Jacowleff, success comes down to “who changes the tax bracket of the largest number of organic users” — meaning who delivers genuine economic upside.

Deal flow and what’s next

Perp DEX fundraising momentum is increasing. “At least a couple of new perp DEXs a week are popping up,” said Mónica of Haun Ventures. "There will definitely be more raises from the VCs that don't already have at least one bet and feel like they've missed out."

Jed Breed, founder and general partner of Breed VC, agreed that pitch flow is rising but said most projects are still “not super differentiated,” adding that “beating Hyperliquid at this point is quite challenging.” (Breed VC does not hold HYPE).

For now, that may be the clearest takeaway: perp DEXs are back in the spotlight, but few can match Hyperliquid’s blend of speed, liquidity, and community. The next winner will need more than incentives to stand out — they’ll need to redefine what decentralized trading can be.

TOP OF THE CHARTS

Perps continue dominance across CEXs and DEXs

Perpetual futures DEX volumes have surged in 2025, topping $1 trillion in September — the highest on record. Aster and Hyperliquid now dominate on-chain derivatives activity, though Aster’s rise has sparked some wash-trading speculation. On centralized exchanges, futures volumes — largely perpetuals — reached $5.6 trillion last month, led by Binance and OKX.

So far in 2025, perpetuals account for 75% of total CEX trading volume, generating nearly $49 trillion — far ahead of $14.8 trillion in spot and $1.3 trillion in options, compared with 72% in 2024, according to data compiled by my colleague Simon Cousaert. On DEXs, perpetuals have grown from 50% of total volume last year to 56% this year, with cumulative onchain perps reaching $4.7 trillion versus $3.6 trillion in spot trades. The data underscores how perpetuals have become the core driver of market liquidity across both CEX and DEX ecosystems.

To subscribe to the free The Funding newsletter, click  here .


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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