Key Takeaways

Historic Milestone: Decentralized perpetual futures have achieved a trading volume of over $1 trillion monthly, matching traditional derivatives markets for the first time.
Cheaper and Faster Trading: With ultra-low fees on Layer-2 networks and abundant stablecoin liquidity, DeFi offerings are now more cost-effective and efficient than those on centralized exchanges.

Decentralized perpetual futures have quietly surpassed $1 trillion in monthly trading volume, marking a record month for on-chain derivatives and indicating that a portion of crypto leverage is shifting from centralized exchanges. Data from DeFiLlama reveals that decentralized perpetual markets reached $1.05 trillion in volume as of October, with more than a week left in the month.

DeFi perps monthly volume

Source: DeFiLlama

On a daily basis, DeFi perpetuals see nearly $45.7 billion in turnover, while on-chain open interest has climbed to $16 billion, suggesting sustained trading activity rather than mere speculative spikes.

Institutional Flows Driven by Hyperliquid and Lighter

The surge in activity is primarily led by Hyperliquid, a customized Layer-1 derivatives ecosystem that has handled over $316 billion in monthly volume, surpassing the combined Bitcoin futures trades of Coinbase and Kraken during the same timeframe. Following closely is Lighter, which is built on Arbitrum and recorded a volume of $259 billion. Aster, despite a significant drop in activity due to scrutiny around self-matched trades, maintained $178 billion in volume.

Instead of a multitude of fragmented decentralized exchanges (DEXs), a select group of high-performance perpetual trading venues is emerging as the backbone of on-chain leverage markets.

Increasing Volatility Fuels DeFi Appeal

The rise in October coincides with a marked increase in market volatility. Bitcoin’s realized volatility has surpassed 45%, elevating funding rates and attracting traders to platforms that promise faster execution and lower collateral requirements. In tandem, stablecoin settlement volumes have continued to grow, exceeding $1.25 trillion year-to-date, providing DeFi perpetual markets with substantial collateral pools to accommodate major directional positions.

Moreover, gas costs on Ethereum’s Layer-2 networks have fallen to fractions of a cent following the Dencun upgrade. For example, a 100x trade on Lighter incurs execution fees of under $0.01, a stark contrast to the $20 to $45 fees experienced during peak conditions on centralized exchanges in 2021-2022.

Distrust in Centralized Exchanges Enhances the Shift

The transition towards DeFi is also propelled by increasing distrust and operational challenges associated with centralized platforms. The recent downtime of exchanges due to AWS issues, along with heightened scrutiny focusing on Binance and offshore derivatives brokers, has intensified concerns. Following the exposure and delisting of Aster’s inflated volume activity, liquidity shifted within 48 hours—an instant response that would have taken weeks in 2022.

Will Institutional Flows Follow?

If the current trends continue, decentralized perpetual venues may soon rival or even exceed centralized derivatives in terms of both liquidity and speed, marking a potential new frontier for competition. The outcome of this transition will help determine whether this surge represents merely a cyclical upswing or signals a fundamental shift in the core of crypto trading.