The rise of perpetual futures has led to a shift in Ethereum's role, from a direct competitor to a supporter of layer-2 networks, where trading is taking place. For years, Ethereum has been at the forefront of decentralized finance, pioneering on-chain financial tools like lending protocols and tokenized assets. However, the growth of perpetual futures has flourished elsewhere, with Hyperliquid and Solana becoming popular venues for high-speed transactions.
According to AJ Warner, chief strategy officer at Offchain Labs, perpetuals require frequent transactions, fast execution, and deep liquidity, making them a natural use case for layer-2 platforms like Arbitrum. The distinction has become increasingly important as decentralized perpetual exchanges mature and attract institutional attention.
Ethereum's security-first architecture made it an ideal settlement layer, but its block times and gas costs made it expensive for latency-sensitive trading applications. The launch of GMX on Arbitrum in 2021 established a template for other perpetual exchanges, and today, much of Ethereum's perpetual trading activity lives on layer-2 networks like Arbitrum and Base. Ethereum's layer-2 ecosystem has become a compromise, preserving Ethereum's security while improving trading performance.
Chris Boulous of Dromos Labs argued that technical performance is only part of the story, and that trading is effectively a network-effects business, where builders need to build where liquidity and users exist. Solana and Hyperliquid have surged as venues for high-performance trading infrastructure, but Ethereum's role is evolving rather than diminishing.
Proponents argue that Ethereum doesn't need to become the fastest place to trade perpetuals, but rather the deepest and most trusted place to settle them.