The Perpetual DEX Showdown

It’s not even close.

Pierce & Pierce Research | December 8, 2025

Executive Summary

The perpetual DEX sector has exploded. Monthly volumes exceeded $1 trillion in September 2025, a 530% increase from January. Yet this growth masks a brutal truth: one protocol has captured the lion's share of value creation, while legacy players have been systematically destroyed.

Hyperliquid peaked at 73-80% market share in mid-2025. Competition has since intensified: Aster's CZ-backed emergence and Lighter's institutional backing have compressed HYPE's volume share to ~32-38%. But the stickier metric tells a different story: Hyperliquid still commands 54-62% of perpetual DEX open interest, the clearest signal of where real capital is parked. At $8-10B market cap, it remains larger than the next nine investable tokens combined.

This isn't a sector report. It's a dominance assessment.

Key Findings:

• HYPE remains the sector's only Prime Asymmetry opportunity (P-Score™ 82). Volume share has compressed from 80% to ~35% as competition intensifies, but open interest dominance (54-62%) and $500M+ in cumulative buybacks demonstrate structural resilience. The November 2025 unlock revealed 42% of team tokens were immediately restaked
• dYdX fell from 73% market share (Jan 2023) to single digits. The sector's cautionary tale about incentive-dependent volume
• Aster captured significant share through aggressive incentives and CZ's public endorsement, but 90%+ token concentration in <10 wallets and extreme volume-to-OI ratios (~27:1 vs HYPE's ~4:1) disqualify it from our scoring framework (see Methodological Exclusions)
• Jupiter's perps are a rounding error in its aggregator business. The February 2026 team unlock determines whether the broader ecosystem play justifies current valuation
• GMX pioneered real yield but suffered a $42M exploit in July 2025 and has lost competitive position

Quick Scan Summary

*APEX 30d move reflects recovery from depressed levels; structural concerns detailed in token analysis section.

Data as of December 8, 2025. Sources: CoinGecko, DeFiLlama, CoinGlass

Methodological Exclusion: Aster

Before proceeding to analysis, we must address the sector's most prominent non-inclusion.

Aster launched September 17, 2025 and briefly overtook Hyperliquid in monthly volume by October, reporting $420B+ for September alone. Despite capturing significant market share, we have excluded ASTER from our P-Score™ framework for the following reasons:

1. Volume-to-OI Ratio: Aster's ~27:1 ratio versus Hyperliquid's ~4:1 suggests potential wash trading or heavily incentivized activity that may not persist
2. Token Concentration: Reports indicate 90%+ of circulating ASTER held in fewer than 10 wallets
3. Track Record: Three months of operation provides insufficient data for fundamental assessment
4. Extreme Leverage: Up to 1001x leverage creates systemic risk concerns
5. Incentive Dependency: On September 28, 2025, Aster earned $25M in daily fees vs Hyperliquid's $3.2M. That ratio suggests unsustainable incentive-driven activity

What We Know:

• CZ purchased 2M ASTER tokens publicly, driving a 10x price move within four days
• Multi-chain deployment (BNB Chain, Ethereum, Solana, Arbitrum)
• Plans for Aster Chain (ZK-based L1) announced
• Backed by YZi Labs (formerly Binance Labs)

Assessment: Until volume-to-OI ratios normalize and token distribution improves, ASTER should be treated as speculative exposure to the BNB Chain ecosystem rather than a fundamental perp DEX investment. We will revisit for Q1 2026 coverage if metrics stabilize.

The Binance Problem

Before analyzing individual tokens, we must acknowledge the structural reality: centralized exchanges process 85%+ of perpetual futures volume.

Binance alone handles $50-80 billion in daily perpetual futures. On December 8, 2025, the entire DEX sector (Hyperliquid, Aster, Lighter, Jupiter, dYdX, and dozens of others combined) processed approximately $30 billion.

This creates the investability gap:

*Higher ratios can indicate unsustainable incentivized volume or wash trading; lower ratios suggest organic activity relative to valuation.

The gap between #1 (HYPE at $8.18B) and #3 (JUP at $722M) is 11x. The gap between HYPE and the median perp DEX token is closer to 80x.

This concentration reflects market reality: Hyperliquid solved the DEX performance problem. Everyone else is competing for what remains.

Why CEXs Still Dominate

1. Latency: Binance executes in milliseconds; most DEXs face blockchain confirmation delays
2. Liquidity: CEX order books are deeper, spreads tighter
3. UX: One-click trading without wallet management
4. Regulatory arbitrage: CEXs have navigated compliance; DEXs face uncertainty

Why DEXs Are Gaining

1. Self-custody: No counterparty risk (FTX taught this lesson)
2. Transparency: On-chain settlement, verifiable reserves
3. Innovation: Permissionless listing, novel products
4. Hyperliquid proved it's possible: Sub-second finality, 200K TPS, CEX-level spreads

What Actually Matters: Fee Capture

The single most important differentiator among perp DEX tokens is how protocol revenue flows to token holders. Everything else (volume, TVL, user counts) matters only insofar as it generates fees that accrue to the token.

The hierarchy is clear: Direct buyback/burn mechanisms (HYPE, APEX) create tighter coupling between protocol success and token value than staking rewards or governance rights. When evaluating any perp DEX token, start here.

Scoring Methodology

The P-Score™ framework evaluates perp DEX tokens across six weighted categories:

Signal Classifications

• 🟢 Prime Asymmetry (70+): Strong fundamentals, favorable risk/reward
• 🟡 Active Monitor (60-69): Mixed signals, requires catalysts
• 🟠 Structural Concerns (<60): Fundamental issues limit upside

P-Score™ Matrix

Token Analysis

🟢 Prime Asymmetry: Hyperliquid (HYPE)

P-Score™: 82 | Price: $30.15 | Market Cap: $8.18B

Investment Thesis: Hyperliquid achieved what no other DEX has: CEX-level performance on-chain. Its volume share has compressed from 80% (August 2025) to ~35% amid fierce competition from Aster and Lighter. But the stickier metric, open interest, tells a different story: HYPE still commands 54-62% of perp DEX OI, indicating where real capital remains parked. The fee-to-buyback model ($500M+ cumulative) creates genuine deflationary pressure, and the token represents concentrated exposure to the DEX perps thesis without the execution risk present in competitors.

Key Metrics

• 24h Volume: $6.22B (Rank #3 by protocol)
• Open Interest: $1.52B
• Circulating Supply: 336.68M / 999.53M (33.7%)
• YTD Performance: +26.07%
• 30d Performance: -28.75%

Fee Mechanism

Hyperliquid's fee mechanism operates through three channels:

1. Perpetual Trading Fees: Primary revenue source; the vast majority of HLP fees flow to the Assistance Fund
2. HIP-1 Auction Fees: 100% used for HYPE buybacks
3. Spot Trading Fees: USDC portion funds buybacks; HYPE portion directly burned

As of December 2025, the Assistance Fund has accumulated ~24 million HYPE tokens worth over $900 million through buybacks. An additional ~270,000 HYPE has been permanently burned. The combination creates dual deflationary pressure.

Unlock Schedule

The first major unlock occurred November 29, 2025, releasing 1.75 million HYPE (~$60M) to core contributors. This begins a 24-month linear vesting schedule for the 23.8% allocation (238M HYPE) reserved for team/contributors.

Critical observations from first unlock:

• 41.89% immediately restaked by Hyperlabs and team members
• 23.42% moved to Flowdesk (market maker) via OTC
• 34.69% remains as spot HYPE on HyperCore
• No VC unlocks or investor vesting. This differentiates HYPE from nearly every competitor

Monthly unlock pressure: ~9.92M HYPE/month (~$300M at current prices, ~2.7-3% of circulating supply). Remaining 66% locked supply vests through 2027-2028.

Risk Assessment

Bottom Line: HYPE remains the sector's only Prime Asymmetry opportunity. Volume share compression is real but OI dominance suggests sticky capital. The buyback mechanism creates genuine value capture ($500M+ cumulative), and the lack of VC overhang eliminates a major risk factor. The -28% monthly drawdown presents an entry opportunity if the thesis holds. Monitor OI share as the key health metric.

🟡 Active Monitor: Jupiter (JUP)

P-Score™: 64 | Price: $0.23 | Market Cap: $721.8M

Investment Thesis: Jupiter is primarily a Solana aggregator; perps are a secondary product. The 50% fee buyback sounds compelling but gets diluted across Jupiter's diverse product suite. Upcoming team unlocks (February 2026) create supply headwinds.

Key Metrics

• 24h Perp Volume: $383.8M (Rank #11)
• Circulating Supply: ~3.14B / 10B (44.8% unlocked)

Unlock Schedule

• Jupuary 2026 (January): Annual airdrop, expected ~700M JUP (phased distribution)
• Team Vesting (February 2026): 20% of total supply (2B tokens) begins vesting over 24 months
• November 2025: 130M JUP burned (4% of supply) per governance vote

Value Capture Analysis

Jupiter's 50% fee buyback applies to protocol revenue, but Jupiter generates revenue from multiple products: aggregator fees, launchpad fees (LFG), perp fees, and more. Perps represent a minority of total revenue, meaning the buyback's impact on JUP is diluted compared to pure-play protocols.

Bottom Line: JUP is a Solana ecosystem play more than a perp DEX play. The February 2026 team unlock creates a clear catalyst date to monitor. Position size accordingly.

🟠 Structural Concerns: dYdX (DYDX)

P-Score™: 58 | Price: $0.21 | Market Cap: $171.2M

The Cautionary Tale: dYdX represents the sector's most dramatic fall from dominance. From 73% market share in January 2023 to single digits by late 2024, the protocol's Cosmos app-chain pivot failed to reverse competitive decline.

Key Metrics

• 24h Volume: $352.6M (Rank #13)
• Open Interest: $83.7M
• Circulating Supply: 813.3M / 1B (81.3% unlocked)

Unlock Schedule

Per the January 2023 amendment, remaining investor unlocks follow this schedule: 10% in monthly installments from July 2025 through June 2026. Next unlock: January 1, 2026 (investor tranche).

What Went Wrong

1. Incentive Dependency: dYdX's early volume was heavily incentivized; when rewards declined, so did volume
2. Execution Gap: Hyperliquid delivered CEX-level performance; dYdX's app-chain transition introduced friction
3. Geo-Fencing: Early US exclusion may have ceded market share to competitors

Bottom Line: dYdX serves as the sector's cautionary tale. First-mover advantage means nothing without sustained execution. With 81% already unlocked and investor unlocks continuing, the token faces structural headwinds.

🟠 Structural Concerns: GMX

P-Score™: 52 | Price: $8.97 | Market Cap: $93.0M

Real Yield Pioneer, Competitive Casualty: GMX pioneered the "real yield" narrative with 30% of fees to stakers. But the model that worked in 2022-2023 has been outcompeted.

Key Metrics

• 24h Volume: $176M (Rank #19)
• Open Interest: $107.7M
• Fee Model: 30% to GMX stakers, 70% to GLP holders

July 2025 Exploit

A re-entrancy vulnerability in GMX V1's GLP pool on Arbitrum resulted in approximately $42M drained. The attacker accepted a $5M white-hat bounty and returned approximately $37.5M to the GMX Security Multisig. The DAO approved a compensation plan, but trust was damaged.

Bottom Line: GMX is a value trap unless trading volumes recover materially. The July 2025 exploit and competitive pressure have eroded the protocol's moat.

🟠 Structural Concerns: ApeX Protocol (APEX)

P-Score™: 56 | Price: $0.57 | Market Cap: $72.3M

The +693% Question: APEX's dramatic 30-day move reflects recovery from severely depressed levels rather than fundamental transformation. The token traded below $0.10 through much of 2025 before the September buyback announcement catalyzed repricing.

Key Metrics

• 24h Volume: $3.05B (Rank #5)
• Fee Model: 50% buyback (increasing to 90% over time)
• Backing: Built by Bybit

Buyback Program

ApeX initiated a $12 million buyback commitment in September 2025, with 50% of daily revenue allocated to APEX repurchases. The program is designed to increase to 90% over time.

Bottom Line: Underrated relative to volume metrics. The Bybit backing provides credibility and the buyback program is structurally sound. However, limited awareness, thin liquidity, and concentration in Bybit ecosystem constrain broader adoption. The recent move has priced in much of the near-term catalyst.

🟠 Structural Concerns: Drift

P-Score™: 48 | Price: $0.24 | Market Cap: $101.9M

Solana Native: Drift is the largest perp DEX on Solana by open interest, offering up to 101x leverage on major pairs.

Key Metrics

• TVL: ~$1.13B
• Daily Volume: Volatile, briefly hit $1B in July 2025

Value Capture

DRIFT token holders receive governance rights, fee discounts, and can stake for rewards. The mechanism is less direct than Hyperliquid's automatic buyback.

Bottom Line: A Solana ecosystem bet more than a pure perp play. Volume volatility and indirect value capture limit conviction.

Unlock Schedule Summary

Risk Lessons: The dYdX Postmortem

dYdX's collapse from dominance offers critical lessons for evaluating every token in this sector.

What Happened

• Jan 2023: 73% market share, undisputed leader
• Nov 2023: Launched Cosmos app-chain (dYdX v4)
• Dec 2024: Single-digit market share
• Dec 2025: #13 by volume, 81% of tokens unlocked

Why It Happened

1. Incentive-Driven Volume Evaporates: When token rewards declined, so did trading activity
2. Technical Disruption: The Cosmos migration introduced friction while Hyperliquid was delivering seamless UX
3. No Moat: Order book perps are commoditized; execution quality is the only differentiator
4. Unlock Pressure: Continuous investor unlocks created persistent selling

The Lesson

First-mover advantage in crypto lasts months, not years. The only sustainable moat in perp DEXs is execution quality plus direct value capture. dYdX had neither when it mattered.

The question every perp DEX investor must ask: What prevents this token from becoming the next dYdX?

Competitive Reality

Market Share Dynamics (Dec 2025)

Volume Share Evolution:

Open Interest Dominance (The Stickier Metric):

Why OI Matters More Than Volume:

• Volume can be inflated through incentives and wash trading
• Open interest represents committed capital with liquidation risk
• OI stickiness indicates genuine user preference, not just fee mining

The competitive environment is more dynamic than any other DeFi sector. Hyperliquid's volume share compression from 80% to ~35% in three months demonstrates how quickly incentive programs can shift activity. But OI dominance suggests the core user base remains sticky.

Protocols Without Tokens (Monitor List)

These represent potential future opportunities but are currently uninvestable from a token perspective. Lighter in particular bears watching. It ranked #3 by September volume while still in private beta.

Framework Summary

🟢 Prime Asymmetry (P-Score™ 70+)

HYPE: Volume share has compressed but OI dominance (54-62%) demonstrates where real capital is parked. $500M+ cumulative buybacks, no VC overhang, and 42% of first unlock restaked. Current drawdown may present opportunity. Monitor OI share as key health metric.

🟡 Active Monitor (P-Score™ 60-69)

JUP: Wait for February 2026 team unlock clarity. Better entry may emerge post-Jupuary.

🟠 Structural Concerns (P-Score™ <60)

DYDX, GMX, APEX, DRIFT: Various combinations of lost market share, weak value capture, exploit history, or limited liquidity. Require specific catalysts to justify position.

The Winner-Takes-Most Thesis

This report reinforces a pattern we identified in our RWA analysis: DeFi sectors consistently consolidate around a single dominant protocol. The perpetual DEX space exemplifies this dynamic more clearly than any other vertical.

Why winner-takes-most emerges:

1. Liquidity begets liquidity. Traders go where spreads are tightest
2. Network effects compound. More users attract more market makers attract more users
3. Technical moats are temporary. But switching costs are real once established
4. Token incentives accelerate consolidation. The leader can afford to be less aggressive

Investment implication: Sector diversification in DeFi often means owning multiple ways to lose. Concentrated exposure to category leaders, when correctly identified, offers superior risk-adjusted returns.

Sources

All data accessed December 8, 2025:

• DeFiLlama: Perps Dashboard (volume, OI rankings)
• CoinGecko: Prices, market caps, supply metrics
• CoinGlass: Hyperliquid futures data, liquidations
• Tokenomist.ai: Vesting schedules, unlock calendars
• Protocol Documentation: Fee mechanisms, tokenomics
• GoPlus Security (Dune): Hyperliquid buyback/burn tracking
• The Defiant, Blockworks: Historical context, news

Conclusion

The perpetual DEX sector exemplifies crypto's winner-takes-most dynamics, but also demonstrates how quickly competitive moats can erode. Hyperliquid solved the technical problem of CEX-level performance on-chain and was rewarded with 80% market share. Three months later, that share has compressed to ~35%.

The nuance matters: Volume share can be bought with incentives. Open interest cannot. Hyperliquid's 54-62% OI dominance represents sticky capital that hasn't migrated despite Aster's aggressive incentive programs. This is the metric to watch.

For the remaining protocols, the path forward requires either:

1. Differentiation: Unique products, chains, or user segments
2. Ecosystem integration: Becoming essential infrastructure (Jupiter's aggregator model)
3. Value capture innovation: More aggressive fee-to-token mechanisms

The tokens that fail to execute on at least one of these dimensions will continue their descent toward irrelevance.

Hyperliquid's dominance is not guaranteed. The volume share compression proves that. But displacing it requires a competitor that matches its execution quality, matches its value capture mechanism, and convinces $9B in open interest to migrate. So far, no one has.

Pierce & Pierce Research | December 8, 2025

This report is for informational purposes only and does not constitute investment advice. Cryptocurrency investments carry substantial risk. Past performance does not guarantee future results.