The rise of perpetual futures has led to a shift in Ethereum's role, from a direct competitor to a supportive ecosystem for layer-2 networks. For years, Ethereum was synonymous with decentralized finance, pioneering on-chain financial tools. However, the demands of perpetual futures, including fast execution and low costs, have driven traders to other chains like Hyperliquid and Solana.
Ethereum's base layer, prioritizing security over speed, has become an expensive place for high-frequency trading. The emergence of layer-2 networks like Arbitrum and Base has provided a compromise, offering improved trading performance while preserving Ethereum's security. These networks have attracted a concentration of builders and capital, with many perpetual trading platforms now operating on Ethereum layer 2s or closely connected to the ecosystem. As institutions enter the on-chain derivatives market, the focus is shifting from competition to collaboration, with Ethereum positioning itself as a settlement and collateral layer underpinning high-speed trading markets.