The rise of crypto perpetual futures has led to a shift in Ethereum's role, from being the primary platform for decentralized finance to supporting layer-2 networks that enable fast and low-cost trading. Ethereum's base layer was not designed for high-frequency trading, which has led to the emergence of other chains like Hyperliquid and Solana that specialize in perpetual futures.
However, Ethereum's layer-2 ecosystem, including Arbitrum and Base, has become a compromise, offering improved trading performance while preserving Ethereum's security. The distinction between Ethereum's role and that of other chains has become increasingly important as decentralized perpetual exchanges mature and attract institutional attention. Ethereum's security-first architecture and DeFi infrastructure make it an ideal settlement layer, while its layer-2 networks handle high-volume activity, reducing costs and improving performance. The fragmentation of Ethereum's ecosystem, with multiple layer-2 networks, has led to a dispersed user base and liquidity, making it less seamless for traders.
However, proponents argue that Ethereum's role is evolving, with its layer-2 ecosystem and DeFi infrastructure underpinning the perpetual futures market, providing a settlement and collateral layer that supports high-performance trading chains. As institutions begin to pay attention to onchain derivatives, the focus is shifting from whether decentralized perpetuals can work to whether they can compete with traditional infrastructure, with execution, custody, and predictability being key factors. The next milestone for decentralized perpetuals is to enable onchain trading that is not possible or is more expensive in traditional markets, with Ethereum's role in the market evolving rather than diminishing.