The rise of crypto perpetual futures has led to a significant shift in Ethereum's role, with the network increasingly focusing on supporting layer-2 networks where high-speed trading is taking place. Ethereum's security-first architecture has made it an ideal settlement layer, but its block times and gas costs have historically made it an expensive place to run latency-sensitive trading applications.
As a result, decentralized perps exchanges have flourished on layer-2 networks like Arbitrum and Base, which have reduced block times and become attractive trading destinations due to their growing user base and liquidity. While Solana and Hyperliquid have also established themselves as major players in the perpetual futures market, Ethereum's layer-2 ecosystem is becoming a crucial component of the onchain financial stack, providing a settlement and collateral base for deeper liquidity, a wider range of assets, and more mature DeFi primitives. As institutions begin to pay closer attention to onchain derivatives, the conversation is shifting from whether decentralized perpetuals can work to whether they can compete with traditional infrastructure, with a focus on execution, custody, and predictability.