Hyperliquid, previously the dominant leader in on-chain perpetual trading, is rapidly losing market share to emerging competitors like Lighter and Aster.
In May, Hyperliquid controlled 71% of the on-chain crypto perpetuals market. According to data from pseudonymous Dune Analytics user @uwusanauwu, that figure has now plummeted to 38%.
Meanwhile, competitors including a16z-backed Lighter and Binance Labs-backed Aster have significantly increased their presence. Lighter's market share rose to 16.8%, while Aster's reached 14.9%, up from single-digit percentages in May. These metrics are calculated based on weekly trading volumes and exclude wash trading.
The on-chain perpetuals market involves decentralized trading of perpetual futures contracts directly on blockchain networks, offering transparency and immutability.
Perpetual futures are derivatives without expiration dates, enabling traders to speculate on asset price movements. They use a funding rate mechanism to keep perpetual prices aligned with spot prices.
The on-chain perpetual market has seen explosive growth. Total cumulative trading volume across all platforms approached $700 billion over the past four weeks, with $42 billion traded in the last 24 hours alone.
The number of protocols has surged from just two in 2022 to over 80 today. This growth highlights capitalist dynamics: a booming market attracts new entrants, intensifying competition and reducing early pioneers' market share and profits.
The crypto market's low barriers to entry allow technically skilled developers to launch new protocols easily.
A competitive battle is heating up between Hyperliquid and Aster. Recently, Hyperliquid listed Aster's native token ASTR with 3x leverage. Aster retaliated by offering Hyperliquid's HYPE perpetuals with 300x leverage.