Decentralized Perpetuals Exchanges (DEXs): A Comprehensive Guide To The Future Of Crypto Trading

Perpetual swap trading has been a niche within the decentralized finance sector that has been gaining momentum in recent years.

The new era of decentralized exchanges (DEXs) is expected to natively offer options for automated contracts with no expiration date and no third-party intervention, with a strong focus on self-custody of funds by users.

Thus, since their inception, Perpetual DEXs have rapidly evolved to offer continuous and unrestricted opportunities for non-custodial, transparent and secure trading of digital assets.

This crucial sector has seen significant evolution since the last DeFi Summer, and competition among platforms has never been fiercer.

Platforms such as dYdX, operating on its own chain, or Zeus Exchange, built on the eco-friendly 5ire Chain and with its mainnet launch expected in 2025, are just a few options available for everyday users and advanced traders seeking the best cost-benefit ratio.

But how do established giants in the decentralised perpetual exchange space compare with emerging platforms? This article explores the diverse options available for trading perpetual contracts in DeFi without intermediaries.

Metrics on the Rise

Decentralised perpetual trading stands out because users can trade crypto assets with high leverage and no expiry date. Unlike traditional futures contracts, perpetual swaps have no maturity date, allowing users to keep positions open for as long as they wish.

According to data from Artemis, $508.1 billion in trading volume was recorded among the top perpetual protocols over the past three months. Hyperliquid, Jupiter, dYdX, GMX, and Drift Protocol lead the rankings in a sector already boasting hundreds of protocol variations for perpetual swaps.

Hyperliquid dominates trading volume in the last quarter, capturing 54.3% of the sector total, with a 215% increase in the past three months. Hyperliquid also tops the ranking for daily traders at 22,549 (49.3% of top perpetual protocols).

Meanwhile, in recent hours, Jupiter surpassed Hyperliquid to become number one in TVL, reaching $2,473.7 million, representing a 108% increase in the past three months.

Some key metrics summarising the sector's growth in recent months include:

• Trading Volume: Hyperliquid ranks #1 in daily trading volume at $224.9 million.
• Traders: Hyperliquid leads with 5,851k daily traders.
• TVL: Jupiter surpassed Hyperliquid, now at $2,473.7 million.
• Gas Paid: GMX is #1 in daily gas fees, totalling $2.3k.
• Protocol Fees: Aave leads with $2.4 million in fees over the last 24 hours.

Decentralised Perpetuals Exchanges (DEXs) review

Perpetual DEXs combine the best of decentralised exchanges and perpetual contracts. They enable non-custodial and permissionless trading by leveraging blockchain networks to facilitate continuous and automatic digital asset exchanges without needing buyer-seller matching.

Some platforms, like Aave, offer hybrid solutions, while others, such as Zeus Exchange, are fully decentralised. This means any user can access the DEX, and funds remain in the user's wallet. All operations are automated via smart contracts, ensuring users maintain full control over their funds.

Perpetual DEXs use automated market makers (AMMs) to facilitate transactions, allowing traders to instantly buy or sell any amount of an asset. This is made possible by the deep liquidity pools these exchanges rely on, which minimise price deterioration for liquidity providers and reduce slippage risks for traders.

Key Features of Perpetual DEXs

In general, perpetual DEXs offer traders the following significant advantages:

• Uninterrupted Perpetual Swaps: Trading is available 24/7.
• High Leverage: Traders can speculate on future asset prices with leverage up to 100x.
• No Expiry: Unlike traditional exchanges, traders can keep positions open indefinitely.
• Decentralisation and Non-Custodial: Platforms like Zeus Exchange operate without intermediaries, ensuring users retain full control over their funds through smart contracts.
• Deep Liquidity: This enables traders to enter and exit positions as frequently as desired.
• Anonymity: Some platforms do not enforce KYC requirements, offering traders a high degree of privacy.
• Low Transaction Fees: Especially on blockchain-efficient solutions like 5ire Chain.

 Top Decentralized Perpetual Exchanges in the Crypto Space

1. dYdX

• Blockchain: Ethereum, StarkWare (Layer-2). dYdX is a decentralised exchange focused on perpetual contracts, offering advanced features like leverage and margin trading.
• Key Features:
  • A decentralized exchange focused on margin and perpetual contracts.
  • Offers advanced trading features like leverage, shorting, and spot trading.
  • Powered by StarkWare's Layer-2 solution, making it faster and cheaper than Ethereum-based DEXs.
• Advantages:
  • Advanced trading options that appeal to experienced traders.
  • Low fees and fast transaction speeds on Layer-2.
• Disadvantages:
  • Limited to specific trading products (margin, futures, and options).
  • Not as beginner-friendly as other DEXs.

2. Zeus Exchange

• Blockchain: Built on the 5ire Chain, Zeus Exchange benefits from a fast, secure, and eco-friendly blockchain, ensuring fast transaction speeds, scalability, and lower energy consumption for decentralized trading.
• Key Features:
  • Swaps: Instant cryptocurrency exchange.
  • Earn: Revenue generation through liquidity mining.
  • Perpetual Trading: Margin trading with up to 50x leverage.
  • Airdrops: Fair, transparent rewards using Soulbound Tokens (SBTs).
  • Referral Program & Tournaments: Earning opportunities through referrals and trading contests.

• Advantages:
  • Low Fees: Competitive transaction fees compared to centralized exchanges.
  • Institutional Tools in DeFi: Advanced trading tools accessible to retail traders.
  • Security: Non-custodial fund storage and integration with the secure 5ire Chain blockchain.
  • Innovative Reward System: Fair airdrops are distributed based on user activity, ensuring transparency and avoiding manipulation.
• Disadvantages:
  • Limited token pairs.
  • Growing but smaller user base.

3. GMX

• Blockchain: Operates on Arbitrum and Avalanche. GMX offers perpetual trading with up to 50x leverage and low fees.
• Key Features:
  • A decentralized exchange focused on transaction efficiency.
  • It offers advanced trading features with leverage up to 50x, offering perpetual contracts for various cryptocurrencies.
  • GMX exchange uses Chailink's Decentralized Oracle Network (DON) to provide price feeds to the spot and perpetual contract trading protocols.
• Advantages:
  • The platform aims to offer zero price impacts and has a swapping interface that is easy to use.
  • Low fees and fast transaction speeds on Layer-2 solutions
• Disadvantages:
  • Limited trading pairs supported
  • The GLP pool faces the risk of depletion if most traders consistently profit.

4. Jupiter Perp

• Blockchain: Jupiter is a decentralized exchange (DEX) aggregator on the Solana blockchain that offers perpetual trading and other DeFi features
• Key Features:
  • Jupiter offers perpetual futures, which are a type of trading option available on the platform. Jupiter perps is a LP-based perpetual exchange based on oracle prices
  • It includes advanced features such as limit orders, dollar-cost averaging (DCA), and complex token swaps.
  • Offers 5 tokens: SOL, ETH, WBTC, USDC, and USDT.
• Advantages:
  • Powered by Solana, Jupiter Perps offers rapid transactions and minimal fees
  • leverage 100x
  • Unlike the traditional order-book model, utilised by the majority of perp exchanges offchain, Jupiter's perp exchange leverages a novel LP-to-trader model.
• Disadvantages:
  • The platform is built on the Solana blockchain. While Solana has shown promise, it has experienced periods of network instability in the past, which could impact the availability and performance of Jupiter Perps.
  • Slowdown in the speed of new pool deployment.

5. Hyperliquid

• Blockchain: Hyperliquid operates on its proprietary Layer 1 blockchain.
• Key Features:
  • Utilizes a real-time order book system for efficient matching of buyers and sellers, providing a trading experience similar to centralized exchanges.
  • Achieves block confirmation times of less than one second, enabling rapid trade execution.
  • Provides a trading experience comparable to centralized exchanges, with features like gasless trading for certain operations and reduced wallet approvals.
• Advantages:
  • Users maintain complete control over their funds, with instant withdrawal capabilities.
  • Offers up to 50x leverage, catering to traders seeking significant exposure.
  • Supports over 130 assets for trading, providing a diverse range of options for traders.
• Disadvantages:
  • Currently supports USDC deposits via Arbitrum only, lacking broader multi-chain integration.
  • As a relatively new platform, Hyperliquid’s proprietary Layer 1 blockchain may not be as extensively tested as more established blockchains like Ethereum.
  • Certain regions are IP-blocked, potentially limiting access for some users

Other Noteworthy DEX Platforms

1. Vega Protocol

• Blockchain: Vega operates on its own purpose-built proof-of-stake blockchain, designed specifically for trading derivatives. 
• Key Features:
  • Users maintain control over their funds without intermediaries.
  • Offers a fully decentralized order book for efficient trade matching.
  • The protocol and software are open source, promoting transparency.
• Advantages:
  • Purpose-built for trading, offering low latency and high scalability.
  • Utilizes mechanisms to prevent front-running, ensuring fair access to the order book.
  • Rewards liquidity providers fairly from fee revenue.
• Disadvantages:
  • As a specialized platform, it may have a steeper learning curve for new users.
  • As a relatively new protocol, it may face challenges in achieving widespread adoption.

2. Perpetual Protocol

• Blockchain: Perpetual Protocol is built on the Ethereum blockchain, utilizing Layer 2 scaling solutions for improved performance.
• Key Features:
  • Facilitates on-chain perpetual contract trading with guaranteed liquidity.
  • Allows traders to take leveraged positions.
  • PERP token holders can stake tokens to earn rewards.
  • Token holders participate in governance decisions.
• Advantages:
  • vAMM ensures liquidity without requiring traditional order books.
  • Layer 2 integration reduces transaction costs.
  • All transactions are on-chain, providing transparency.
• Disadvantages:
  • May support fewer trading pairs compared to centralized exchanges.
  • As with all DeFi platforms, there are inherent risks associated with smart contracts.

3. Aevo

• Blockchain: Aevo is built on a custom Layer 2 solution, enhancing Ethereum’s capabilities for derivatives trading.
• Key Features:
  • Offers low-latency trading experiences similar to centralized exchanges.
  • Supports a wide range of derivative products, including options and futures.
  • Designed for both novice and experienced traders.
  • Implements robust security protocols to protect user funds.
• Advantages:
  • Layer 2 integration allows for high transaction throughput.
  • Reduced gas fees compared to on-chain transactions.
  • Offers a variety of derivative instruments.
• Disadvantages:
  • Custom Layer 2 solutions may introduce elements of centralization.
  • As a newer platform, it may face initial liquidity challenges.
  • Hybrid model, which means that users do not have full control of their funds.

4. Lynx Protocol

• Blockchain: Lynx Protocol operates on the Solana blockchain, leveraging its high-speed and low-cost infrastructure.
• Key Features:
  • Allows users to utilize multiple assets as collateral.
  • Offers significant leverage options for traders.
  • Certain operations are gasless, enhancing user experience.
  • Facilitates trading across different blockchain networks.
• Advantages:
  • Solana’s infrastructure ensures rapid transaction processing.
  • Minimizes fees for traders.
  • Supports a variety of assets for collateralization.
• Disadvantages:
  • Solana has experienced outages that could impact platform performance.
  • As an emerging protocol, it may need time to build a substantial user base.

5. ApolloX

• Blockchain: ApolloX is built on the Binance Smart Chain (BSC), offering efficient and low-cost transactions.
• Key Features:
  • Provides high leverage options for perpetual contracts.
  • Designed to cater to both beginners and professional traders.
  • Users can earn rewards by providing liquidity.
  • Incentivizes user growth through a structured referral system.
• Advantages:
  • Attractive for traders seeking significant exposure.
  • Multichain ecosystem: BNB Chain, Ethereum, Arbitrum One, ZkSync Era and Base.
• Disadvantages:
  • No investment schemes
  • No yielding earnings from trading.

Conclusion: Choosing the Right Perpetual DEXs

With so many options in the industry, it’s normal to wonder: Which platform should I use if I want to trade swap perpetuals in a decentralized way? While the answer isn’t easy, given the intense competition and the emergence of many PerpDEXs with improved and more advanced features than those we knew four years ago during the DeFi boom, there are several criteria you can consider to make the best decision that fits your needs.

Factors such as liquidity and user experience are key, but others, perhaps less obvious, like transaction fees or token variety, might be the first elements to consider for more experienced traders. Let's look at some of the features you should consider when selecting a DEX:

• Liquidity: One of the headaches for traders when frequently using a DEX is undoubtedly slippage during the token swap process. Higher liquidity reduces slippage, ensuring that trades execute at expected prices.
  
• Transaction Fees: Just as important—and a major headache for many platforms and users during the last DeFi Summer—were the gas fees users had to pay when executing transactions on decentralized platforms, especially those native to Ethereum. Now, highly efficient solutions like 5ire Chain address this issue for thousands of users who need to execute trades on decentralized platforms, such as Zeus Exchange. Remember, depending on the blockchain used, fees can vary significantly.
  
• Token Variety: Whether you need to exchange stablecoins for ERC-20 tokens or access Bitcoin with low fees outside its main network, some platforms support a wide range of tokens, like Hyperliquid.
  
• Advanced Trading Features: The variety of decentralized platforms for token exchanges offer features focused on providing the best trading experience for both new and experienced users, adjusting to the needs of both types of traders, as seen in platforms like Zeus Exchange and dYdX. Other platforms are more suited for beginners and intermediate traders.
  
• User Experience: As mentioned above, depending on your level of experience with DEXs, you can use user-friendly interfaces like Hyperliquid or Zeus if you’re a beginner, while experienced traders may prefer platforms like Zeus or dYdX for their advanced features.

Regardless of the platform you choose to trade on, the use of versatile and user-friendly interfaces, regardless of one’s knowledge of decentralized options, has helped bring in a new wave of users from outside the cryptocurrency sector, fulfilling the original mission of empowering the end user to manage their finances without the need for centralized intermediaries that may put their funds at risk.

Transparency and innovation in the DeFi sector have allowed the deployment of more competitive platforms in a key industry sector that serves as an entry point for both beginners and advanced traders seeking to take advantage of the opportunities offered by decentralized finance.