Perps explained: How Hyperliquid and dYdX are powering the next phase of crypto trading

If you’ve been exploring crypto trading, you’ve probably come across the term perpetual futures contracts, often called perps. 

But what exactly are they, and how are decentralized exchanges like Hyperliquid and dYdX becoming significant players in this space?

At their core, perpetual futures are a type of derivative that lets you bet on the future price of cryptocurrencies, without actually owning them. Unlike traditional futures contracts, which expire on a set date, perpetual futures have no expiration date - they are perpetual. 

Perpetuals function by using a funding rate to keep the perpetual's price aligned with the underlying spot market price. Let’s understand with a simple analogy. 

Imagine renting a house month-to-month:

• You don’t own the house, just like when trading perps, you don’t directly own Bitcoin.
  
  
• You can stay as long as you want; just like perpetual futures, there’s no fixed end date.
  
  
• You pay a periodic funding fee, similar to paying rent, which flows between longs and shorts. If the contract price is above the real market price of Bitcoin, longs pay shorts. If it’s below, shorts pay longs. This back-and-forth helps keep the contract’s price anchored to the specific crypto asset’s actual market price.

Now, if the neighborhood becomes more desirable and housing prices rise, you benefit because you locked in your bet earlier at cheaper levels. But if prices fall, you’re still responsible for covering your side of the deal.

In short, perpetual futures give traders a flexible way to speculate on crypto prices indefinitely, without ever owning the asset.

Perpetual futures have shown an explosive track record, quickly becoming one of the most traded products in crypto. In fact, Bitcoin perpetual futures traded at three times the daily volume of spot products in Q1 2024.

How decentralized exchanges are powering the rise of perps

Perpetual futures trading has traditionally been dominated by centralized exchanges (CEXs) like Coinbase. However, a new wave of decentralized exchanges (DEXs), such as Hyperliquid and dYdX, is rapidly changing the landscape, as shown in the chart below.

On decentralized exchanges, traders can access perps directly from their wallets in a non-custodial, transparent model that removes reliance on centralized platforms. Thanks to advances in blockchain scalability and user experience, onchain perp trading is now fast, cheap, and user-friendly, driving a growing shift of traders on-chain and positioning decentralized perps as a key engine of crypto’s next growth phase.

In 2025, the trading volume of decentralized perpetuals on DEXs reached a staggering $2.6 trillion, surging 138% year-over-year and regularly topping tens of billions in daily volume across leading platforms. 

To see this growth in action, let’s look at the performance of two leading players: Hyperliquid and dYdX.

Hyperliquid

Hyperliquid has quickly emerged as the leading decentralized exchange for perpetual futures, offering deep liquidity, low fees, and massive trading volume. Since 2020, onchain perp platforms have processed about $7.5 trillion in cumulative volume, with Hyperliquid alone contributing $2.5 trillion since its 2023 launch. Today, it processes over $8 billion in daily volume and dominates 80% of the decentralized perps market. By building the core infrastructure for blockchain-based markets, Hyperliquid is positioned to capture the next wave of growth in decentralized derivatives as institutional adoption accelerates.

dYdX 

dYdX is the first decentralized exchange (DEX) to offer perpetual contracts. Leveraging its early-mover advantage, the platform has facilitated over $1.5 trillion in cumulative trading volume, representing more than 20% of the $7.5 trillion transacted across decentralized perpetuals to date. The platform consistently generates around $7 billion in monthly trading volume and has had over 15,000 active traders each week for the past two years, underscoring its market leadership. 

Conclusion

DEXs are emerging as a significant force behind perpetual contracts, with their accessibility, transparency, and security fueling mainstream adoption. The integration of AI and advanced analytics will further enhance trading strategies and user experience, making DEXs more competitive with centralized platforms. Following record-breaking volumes, perpetual DEXs are poised to drive crypto’s next growth phase in 2025.