The 2025 October crypto market crash marks a watershed moment, and the era of "easy profits" from perpetual contracts is confirmed to be over.

A recent industry report from a leading crypto derivatives platform indicates that the severe crash in the cryptocurrency market in October 2025 is becoming a critical turning point for the entire derivatives trading ecosystem. The report suggests that this extreme market condition not only caused approximately $20 billion in market evaporation but also ended the long-standing “low risk, stable arbitrage” profit model of perpetual contracts at a structural level.

The analysis states that between October 10 and 11, the market experienced continuous declines that triggered a large-scale auto-deleveraging mechanism. The delta-neutral strategies, previously considered safe, were disrupted, forcing market makers’ hedge shorts to be liquidated, exposing them to unilateral spot risk during the downturn. This feedback loop prompted many market makers to withdraw liquidity rapidly, causing the order book depth to fall to its lowest level since 2022.

For a long time, perpetual contracts have been regarded as an important tool for earning excess returns, relying on funding rates, price spreads, and cross-market arbitrage to maintain stable profits. However, the report points out that these strategies have become highly crowded in recent years, with funding rates dropping to around 4%, rendering classic funding rate trading and spot-futures arbitrage significantly ineffective, leading to a complete reevaluation of the overall risk-reward ratio.

At the structural level, the report also notes that the trading environment is diverging. Some platforms maintain neutral matching mechanisms, while others adopt more aggressive internal counterparty models, which can trigger trust crises during extreme market conditions. This has also prompted some traders to shift toward on-chain perpetual contract products, seeking higher transparency and verifiability. However, the report warns that decentralization does not inherently equate to security.

Taking the September Plasma (XPL) token incident as an example, the report found that some pre-issued tokens, due to liquidity shortages and lack of price oracles, inadvertently provided manipulators with “liquidation pathways,” leading to precise on-chain perpetual position liquidations.

Overall, the report clearly signals that the crypto perpetual contract market is entering a new phase characterized by high volatility and low tolerance for errors. Market makers, traders, and platform operators all need to adapt to a new era that no longer relies on structural dividends but emphasizes risk management and genuine liquidity.