Perp DEX's sustainability is in doubt: Hyperliquid and Aster have randomness.

Author: Haotian; Source: X, @tmel0211

To be honest, I don't think that just based on indicators such as Hyperliquid's successful model, Aster's wealth creation effect through pump, and Lighter's farm craze, we can determine the sustainability of the Perp DEX narrative. The reasons are as follows:

1. The success of Hyperliquid has a certain element of chance; just like my previous analyses in the three Perp articles, the rise of Hyperliquid essentially represents a “mutation” under the ongoing tug-of-war between DEX and CEX. It does not signify the victory of DEX, nor does it indicate the failure of CEX, but rather a compromise innovation.

The success of HL is attributed to a perfect combination of multiple factors, including the ongoing trust crisis in CEX, the breakthrough of using dedicated trading chains to overcome the limitations of previous general chains for trading applications, and the gradual wealth creation effect of a non-VC community airdrop.

This successful model is hard to replicate. Especially the “first-mover advantage + network effect” moat cannot be solved by simply copying the product model. HL took 2 years to go from 0 to 70% market share; now, who still has this window of opportunity?

2. The extremely short-term wealth effect of Aster seemingly relies only on the calls from the unbeatable CZ and the community's expectation of being Binance's favorite, but the essence behind this is the resource tilt of the exchange and the operations of the market makers behind it.

There are many strategic considerations of exchanges and interpretations of attracting liquidity through phenomenon-level product packaging here, and there are many KOLs in the market who can analyze it more enticingly, so I won't elaborate further.

There is one core question: if a product's performance has not been fully validated by the market, what can support a short-term increase of dozens of times? Long-term data indicators such as OI open interest, TVL stability, and Revenue data can withstand pressure, but the key is that the growth flywheel of “transaction fees + buybacks” is the beginning of supporting all this.

Applying this to $ASTER, there are VC, KOL selling pressure after the round, potential selling pressure from BNB holders after Binance spot, and the demand for dark pool trading has not been validated by the market. Whether the transaction fees will continue to be repurchased remains uncertain. In this way, is defining it as the next Hyperliquid too hasty?

3. Other emerging Perp DEXs have indeed raised expectations for technical innovation, although they have not been effectively validated. However, from a data perspective, it is clear that they are currently exaggerated by the market's farming expectations. For example, Lighter continues to attract TVL and trading volume data with zero fees, and many people shill that it has surpassed Hyperliquid and similar platforms.

This actually exposes the problem: how long can the trading volume relying on subsidies and various farm airdrop expectations last? What will happen once the airdrops do not meet expectations? What if the technical narrative cannot withstand scrutiny? What truly determines its market position must be the continuous “transaction fees + buybacks,” and it must be able to maintain a long-term balance and a win-win situation among the interests of market makers, traders, and ordinary traders.

These all require a long time, or rather, a complete market cycle of testing to be valid; at least for now, it is not possible to make a premature judgment.

4) What worries me the most is that everyone only sees the threat Hyperliquid poses to Binance, while ignoring its collateral effects on other L1 and L2 Perp DEXs.

The new “trading chain” positioning of Hyperliquid verifies the necessity of specialized optimizations at the chain level for trading experience. However, what about the general-purpose chains that rely on trading applications? After all, both attention and liquidity are limited, and the rise of a batch of new trading chains will inevitably have a direct impact on the ecosystems of other public chains.

Don't forget that the prosperity of the DeFi market relies on the comprehensive activation of market “innovation power” and “liquidity” through modularity and composability. If a single trading chain model like Hyperliquid can seize market share from CEX, it would definitely be a monumental achievement. However, if the replicas are just cycling through, merely taking market share from other L1 and L2 Perp DEXs, and a large portion of the emerging Perp DEXs are still backed by CEX exchanges, then does the arrival of this market prosperity align with everyone's original intention of the “decentralization revolution”?

Of course, you might say that forcing exchanges to evolve is also a form of progress, and I do not deny that. There is nothing wrong with the innovative evolution of HL, and there is also nothing wrong with the conflicts driven by exchanges in the Perp DEX (new force CEX). I also look forward to the revival of more genuine on-chain Perp DEX markets; isn’t everyone’s prosperity the same? Retail investors just want to get a piece of the action. OK, I hope you understand all of this and be a smart little retail investor.