The rise of perpetual futures, or 'perps', has been a significant development in the crypto market, with Ethereum's layer-2 ecosystem playing a crucial role in supporting this growth. While Ethereum's base layer was not designed to handle the high-frequency trading required for perps, its layer-2 networks, such as Arbitrum and Base, have become attractive destinations for traders due to their improved performance and growing user base. This shift has led to a change in Ethereum's role, from being a direct competitor to other chains, to becoming a settlement and collateral layer that underpins the perps market.
With institutions beginning to take notice of onchain derivatives, the conversation is now focused on whether decentralized perpetuals can compete with traditional infrastructure, and Ethereum's ability to solve challenges such as fragmented liquidity and better interoperability will be crucial in determining its future role in the market.