Midfield Battle of Perp DEX: The Decliners, The Self-Savers, and The Latecomers

Author: Zhou, ChainCatcher

Last week, Hyperliquid's trading volume reached approximately $15 billion, with commodity-related contracts such as crude oil, gold, and silver becoming the main drivers.

As oil prices fluctuated sharply, the daily trading volume of crude oil perpetual contracts on Hyperliquid surpassed $2.2 billion, second only to Bitcoin.

With the situation in Iran escalating and the Strait of Hormuz in crisis, CME closed over the weekend, leading global traders to flock to an on-chain decentralized exchange for price discovery.

Meanwhile, GMX Labs, which once held nearly a quarter of the decentralized perpetual contract market, is publicly recruiting a CEO, acknowledging that the early founder-driven model is no longer sustainable and seeking to transition to a traditional leadership structure.

One is capitalizing on the overflow demand from traditional finance, while the other is still rebuilding its foundation.

Why Did GMX and dYdX Fail?

Looking closely at GMX Labs' announcement, the candidate pool for CEO includes individuals from DeFi, CeFi, traditional finance, and the tech industry, with a base salary of $150,000 to $200,000 paid in stablecoins, and performance directly linked to protocol fee growth. This proposal passed with 96.42% approval in the DAO governance vote.

A decentralized protocol, with overwhelming community consensus, has decided to introduce a traditional professional manager. This indicates that the community has realized that the original makeshift model can no longer hold up, and the solution they could think of is to align more closely with traditional corporate management.

dYdX's situation is even more dire. At the beginning of 2023, dYdX held a 73% share of the decentralized perpetual contract market, almost monopolizing it; by the end of 2024, this figure had dropped to single digits, with its token price plummeting over 90%.

Today, the news about both protocols in the media is not about product updates or market share, but rather token buybacks. When a protocol focuses its main efforts on maintaining token value rather than gaining market share, its strategic focus has fundamentally shifted.

The decline of GMX and dYdX is due to complex reasons.

First is the starting point issue. A report from OKX Ventures shows that in 2021, dYdX pushed its daily trading volume to about $9 billion through trading mining, briefly surpassing Coinbase. This figure was inflated by token incentives, with users inflating volumes to earn rewards rather than engaging in real trading.

The more serious consequence is not the false data itself, but that the team responded to the false user feedback as if it were real product signals, leading the iteration direction astray from the very beginning.

Secondly, there is the architectural issue. GMX employs a multi-asset liquidity pool combined with oracle pricing. This design was reasonable in 2021 when order books could not operate effectively on the Ethereum chain; the AMM model was a viable choice.

However, this architecture has a quantifiable ceiling, with the total open contract size that the protocol can support being about five times the TVL, which caps the upper limit of trading volume.

LPs in this model are naturally at an information disadvantage, acting as the collective counterparty for all traders, yet lacking the ability to actively manage risk. Professional market makers are unwilling to enter under these conditions, resulting in permanently limited liquidity depth.

dYdX recognized the direction of order books and decided to migrate to a self-built application chain on Cosmos. The technical judgment was correct, but execution encountered problems. After the migration, users needed to adapt to new wallets and cross-chain asset bridging, significantly increasing friction costs. More critically, in the v4 version, protocol fees flowed to validators instead of token holders, resulting in a zero perception of growth dividends for the community.

The third point concerns the judgment of decisive points. GMX bet on the liquidity model, while dYdX bet on a self-built chain, but there are only two real decisive points in this track: performance and the density of the market maker ecosystem.

OKX Ventures pointed out that most perpetual DEXs merely shift centralized risks from the custody layer to the less visible execution and clearing layers, treating decentralization as a narrative rather than a genuine product issue to solve.

dYdX's shift to synthetic stock perpetual contracts and opening to U.S. users is a way to exchange compliance for survival space, avoiding direct competition. GMX's recruitment of a CEO is an attempt to compensate for strategic misjudgments through organizational upgrades. These are all correct self-rescue actions, but they are still addressing the results rather than the causes.

The Logic of Latecomers

When Hyperliquid launched in 2023, GMX and dYdX were still the dominant players in this track. It did not raise funds, lacked VC backing, and did not have large-scale launch events.

Early growth was slow. Without using token incentives to inflate volumes, the number of traders and market makers accumulated during the cold start period was limited, resulting in poor platform data for a long time. The profit and loss of the HLP treasury can be checked on-chain in real time, attracting those willing to put real money in, but at that time, this was not a prominent advantage.

On the technical front, founder Jeff chose to build a self-developed L1 and create a fully on-chain order book from the very beginning. The underlying logic is to allow market makers to identify different types of trading flows through a completely transparent on-chain environment, thereby adjusting pricing strategies.

This approach determined that it could not follow dYdX's path of migrating to an application chain, nor could it rely on GMX's oracle pricing, and could only rebuild from the ground up. Although this theory remains controversial in the industry today, it provided a clear main line for Hyperliquid's product direction.

In terms of traditional asset layout, HIP-3 will launch in October 2025, first accumulating a market maker ecosystem with crypto assets, then sequentially introducing gold, silver, and crude oil.

Reports indicate that when dYdX launches a permissionless traditional asset market in 2024, the daily trading volume of Tesla synthetic stocks will be $4,000, while the Turkish lira will be $0. No market makers are present, resulting in zero asset launch.

Hyperliquid's approach is to expand asset categories only after the market maker ecosystem matures, which is why it captured this wave of trading volume when the Iran crisis erupted.

According to CoinGecko data, as of March 26, based on 24-hour open contracts, Hyperliquid accounts for about 54% among the top ten perpetual DEXs, with Aster ranking second at about 15%, and Hyperliquid's scale still exceeds the total of the other nine.

Aster, ranked second, and Hyperliquid entered the market almost simultaneously; why did Hyperliquid surpass Aster later?

Aster CEO Leonard stated in an interview, "When dYdX appeared, we began trying to build our own thing on-chain, and the first version of Aster came out, which is Apollo X. Since then, perpetual contract DEXs have gone through several cycles, with projects like GMX representing an era. We have always tried to create what the market truly needs, which is how Aster came to be."

From his words, it is evident that Aster's path is gradual. Starting from the AMM model, it iteratively added an order book and then addressed the limitations of transparent markets with privacy order features. Each step responds to market feedback, and each step is a reasonable product decision.

In simple terms, it has always followed the evolution of the track rather than defining the evolution of the track.

Don't Release Your Product Too Early

In the crypto industry, the speed of technological paradigm shifts is too fast; incremental iteration means you are always chasing the decisive points of a previous era.

There are always people in this track searching for answers, and it is still the case now.

The crypto industry is currently not favored, with a large number of talents and capital withdrawing. But precisely because people are leaving, the technological window will not be quickly filled, giving builders more time. Each iteration of infrastructure, the maturity of L2, the feasibility of application chains, and the operability of on-chain order books will open up new possibilities for products.

First-mover advantage in this industry is much weaker than in traditional industries, which is both a risk for old players and a real opportunity for new players. Especially in an era where AI tools are leveling productivity gaps, homogeneous competition is intensifying, and just-right products are becoming increasingly difficult to establish.

When summarizing the entrepreneurial lessons of the past year, the founder of Particle quoted a statement from Google founder Sergey Brin at Stanford: "Don't release your product too early." What he means is that once you signal too early, you are tied to a delivery timeline, leaving no time to truly complete what needs to be done.

Therefore, the real issue in entrepreneurship is not how fast you run, but rather clarifying where the endgame of this track lies.

Conclusion

The recruitment of a CEO by GMX may seem minor, but it might be looked back upon as a footnote at some point.

The entrepreneurial dividend period for the first generation of perpetual DEXs has ended; the era of makeshift teams, founder-driven initiatives, and rapid iterations has reached a point where professional management is needed.

New windows are elsewhere, just as Hyperliquid captured this wave of geopolitical trading with commodity contracts, decentralized exchanges are transitioning from internal competition within the crypto industry to a genuine alternative to traditional financial infrastructure; this direction has only just begun.