The "Real vs. Illusory Boom" in Perpetual Contracts: Can You See Through It?

Original Author: Prathik Desai

Compiled and Edited by: BitpushNews

Just when you think finance is getting dull, it always manages to surprise. Lately, it seems everyone is reshaping the financial system in ways few anticipated, even those from the entertainment and media industries.

Take Jimmy Donaldson (aka "MrBeast" on YouTube), for example. Not only does he have a snack empire, but he recently acquired a banking app aimed at promoting financial literacy and money management among teens and young adults. Why? Perhaps nothing is more straightforward than monetizing a subscriber base of 466 million with financial products.

This summer, CME Group, the world's largest derivatives exchange, will launch single-stock futures, allowing users to trade futures on over 50 top U.S. stocks, including Alphabet, NVIDIA, Tesla, and Meta.

These transformations show us how people's ways of engaging with finance are changing. And in recent years, nothing illustrates this better than the explosion of the Perpetual Markets.

Perpetual futures (or Perps) are a type of financial derivative contract that allows market participants to speculate on asset prices without an expiration date. Perps also enable people to express views on assets quickly and cheaply. They are more captivating than traditional markets because they offer instant access and leverage. Unlike traditional markets, they don't require broker onboarding processes, jurisdictional paperwork, or adherence to "traditional" market hours.

Furthermore, on-chain perpetual markets allow any asset—whether traditional or crypto—to be traded in a permissionless, highly leveraged manner. This makes speculation fun, especially when humans can't resist betting on the trajectory of volatile assets outside traditional trading hours. This enables risk to be priced in real-time.

Consider what happened two weeks ago. When traditional and crypto markets crashed simultaneously, traders flocked to Hyperliquid, driving perpetual gold and silver trading into a frenzy. On January 31st, Hyperliquid alone accounted for 2% of the global daily silver trading volume on its Silver perpetual market, which had been live for less than a month.

This explains why perpetual trading volume dashboards are increasingly dominating crypto communities and forums. Volume is an absolute number. It looks big, refreshes every few minutes, and is perfect for leaderboards. But it misses a key nuance: volume might reflect meaningless movement. High volume in a market could be due to depth, but it could also be because rewards and incentives encourage higher-frequency activity. This activity is often recursive and holds little significance.

This week, I delved into other metrics for perpetual trading markets. When used alongside volume, these metrics add more dimensions and tell a completely different story than volume alone.

Let's begin.

A Few Data Points

The user-friendly interface of perpetual markets makes them a low-barrier, default platform for expressing views across various markets and global assets. The wide selection of highly leveraged derivative trading for both traditional and crypto assets on a single platform has led perpetual volume to surpass spot volume on decentralized exchanges. From 44% in February 2025, perpetual volume's share has skyrocketed to around 75% today (relative to spot volume).

This growth has been particularly pronounced in recent months:

• Over four years ending July 31, 2025, the cumulative perpetual volume across all platforms was $6.91 trillion.
• In just the past six months, this volume has doubled, reaching $14 trillion.

All this growth occurred against a backdrop where the total crypto market capitalization shrank by nearly 40% between August 1, 2025, and February 9, 2026. This activity indicates traders are increasingly leaning towards derivatives trading, hedging, and short-term positioning, especially when spot markets become highly volatile and bearish.

But there's a catch. With such massive activity, it's easy to misread volume metrics. Especially because perpetual trading isn't just about buying and holding assets long-term; it involves repeatedly sizing bets using leverage over shorter timeframes.

So, when market turnover accelerates rapidly, a question inevitably arises: does record-breaking volume reflect more capital inflow, or the same capital cycling faster?

This is where observing Open Interest (OI) becomes meaningful. If volume reflects capital flow, OI measures outstanding risk exposure. On perpetual exchanges, OI refers to the total dollar value of active, unsettled long and short contracts held by traders.

If perpetual trading gains mass-market adoption, we would hope to see not just larger capital flows but proportionally growing open exposure.

• In February last year, OI averaged around $4 billion;
• Now, that number has more than tripled to approximately $13 billion. In fact, the average for all of January reached about $18 billion before dropping roughly 30% in the first week of February.

While perpetual volume doubled over the past five months, OI grew by about 50% (from $13B to ~$18B, then back to $13B). To better understand this, I looked at how capital efficiency (i.e., OI as a percentage of daily volume) has trended over the past year.

The OI/Volume ratio jumped 50% from 0.33x last year to 0.49x today. But this progress wasn't smooth; the 50-basis-point increase in the ratio went through multiple peaks and troughs:

Phase 1 (Feb - May 2025): The Quiet Period. The OI/Volume ratio averaged ~0.46x, with average OI around $4.8B and average daily volume ~$11.5B.

Phase 2 (June - Mid-Oct): The Leap. The ratio averaged ~0.72x. During this period, average OI rose to $14.8B, with average daily volume at $23B. This marked not only record-high volume but also increased risk exposure and greater capital commitment to these derivatives.

Phase 3: The Market Reversal. This phase began with the massive liquidation event on October 10th, which wiped out over $19B in leveraged positions within 24 hours. From mid-October to late December, the OI/Volume ratio fell to ~0.38x, driven primarily by volume growth while open interest largely stagnated. October, November, and December saw the three highest monthly volumes of 2025, averaging over $1.2 trillion per month. During the same period, OI averaged around $15B, slightly below the average of the preceding three months.

Protocol Level

Here, I want to add more dimensions to perpetual markets at the protocol level. This helps us understand how efficiently perpetual exchanges convert trading activity into "sticky capital" and revenue.

As of February 10th, here's how the top five perpetual exchanges by 24-hour volume performed:

Hyperliquid: Its OI to 7-day average daily volume ratio exceeds 45%, converting a significant share of volume into lasting positions. This suggests that for every $10 traded on the platform, $4.5 is tied up in active positions. This is important because a high OI rate leads to tighter spreads, deeper liquidity, and confidence in scaling trades without slippage.

Hyperliquid's fee revenue reinforces this story. Its Take Rate is around 3.2 basis points, converting the largest share of 24-hour volume into fee income.

Aster: Currently ranked second, it maintains a decent capital efficiency (OI/Vol) of 34%, despite having almost half the volume of Hyperliquid. However, its monetization capability is noteworthy—with a lower Take Rate (~1.6 bps), Aster clearly prioritizes capital retention on its platform over fee maximization.

edgeX & Lighter: Both perform similarly on the capital efficiency ladder, with OI/Vol at 21%. However, edgeX's fee monetization is comparable to Hyperliquid's at 2.8 bps.

Conclusion

What's remarkable is that today's perpetual market is no longer a simple growth story; it requires nuanced reading of multiple metrics. At the macro level, volume has exploded: the cumulative perpetual volume growth in six months surpassed the total of the previous four years. But the picture only becomes clear when OI is read alongside volume.

The clearer victory lies in the growth of the OI/Volume ratio. This is a direct signal that "patient capital" is willing to trust and bet on the variety of products and markets emerging on perpetual trading exchanges.

What's more interesting to watch going forward is how individual players will evolve from here and what they choose to optimize. Over time, exchanges that can optimize for "Conviction" and achieve sustainable monetization will be far more important than those that merely rely on rewards and incentives to dominate volume leaderboards.