As perpetual futures enter regulated markets, concerns about systemic risk have grown. However, the risk is not inherent to the contract itself, but rather a result of the venue's design choices, such as leverage caps, margin rules, and default management. The recent deleveraging episodes in crypto, including the October 2025 cascade, were caused by a combination of factors, including macro shocks, stablecoin de-pegs, and exchange outages. The liquidation cascade that followed was exacerbated by venue choices, such as manipulable indexes and auto-deleveraging.
Regulatory requirements, including segregated funds and registered clearing entities, are necessary to mitigate these risks. The real question is not whether perpetuals belong in regulated markets, but how a given venue is built to handle defaults and other stressors. Institutions may not want perpetuals as a replacement for regulated futures, but they can be used to hedge delta, and their liquidity edge is structural.
The liquidity institutions want already exists, drawn in large part by retail, and what lets them use it safely is institutional-grade default management. The question was never whether perpetuals are dangerous, but how a venue handles a default when the market is under stress.
Regulated clearing has established a standard for decades, and Bullish is building toward this standard. By containing defaults at their source, rather than transmitting them to the broader market, venues can break the chain that turns a blown-out account into a market-wide cascade.