Is the Perp DEX boom an illusion? Exposing the unsustainable "Emperor's New Clothes" of Hyperliquid and Aster.

An analysis argues that the recent boom in perpetual decentralized exchanges (Perp DEXs) is an unsustainable illusion, challenging the hype around platforms like Hyperliquid, Aster, and Lighter. The core points are:

Hyperliquid's Unreplicable Success: Its rise to prominence is viewed as a unique outcome of specific conditions—a CEX trust crisis, a dedicated trading chain, and effective airdrops—creating a moat that is difficult for newcomers to overcome simply by copying its model.
Aster's Speculative Nature: The project's rapid growth is driven largely by influencer promotion and speculation around a Binance listing, rather than proven product performance. Concerns are raised about its long-term sustainability without solid fundamentals like open interest (OI) and a reliable "fees + buybacks" model.
Inflated Expectations from Others: Platforms like Lighter show inflated transaction volume and TVL data due to zero fees and airdrop farming. The analysis questions how long this subsidized activity can last and what will happen when airdrop expectations are not met or technical narratives fail.
Broader Ecosystem Impact: The success of dedicated trading chains like Hyperliquid could negatively impact Perp DEXs on general-purpose L1 and L2 chains by diverting attention and liquidity. The author questions if this trend truly advances decentralization or merely shifts market share among chain-based competitors, many of which are still backed by centralized exchanges.

The conclusion is that the current Perp DEX narrative is premature and requires the test of a full market cycle to determine true, sustainable success beyond short-term hype.

Honestly, I don’t think the Perp DEX narrative is sustainable based solely on the success of HyperliquidX, Aster’s pump-and-dump effect, and Lighter’s Farm craze. Here are the reasons:

1) Hyperliquid's success was somewhat accidental. As I've analyzed in my previous three Perp articles, Hyperliquid's sudden rise is essentially a variant of the ongoing stalemate between DEX and CEX. It doesn't represent victory for DEX, nor does it spell defeat for CEX; it's a compromise-based innovation.

This is because the success of HL is the perfect combination of multiple factors, including the continued existence of the CEX trust crisis, the use of a dedicated trading chain to break through the limitations of previous general chains for trading applications, and the gradual wealth-creating effect of airdrops without VC communities.

This kind of success is difficult to replicate. This moat of "first-mover advantage + network effect" is especially difficult to replicate simply by copying the product model. HL took two years to go from 0 to 70% market share. Who has this window of opportunity now?

2) Aster's extremely short-term wealth creation effect, on the surface, relies solely on the calls of the invincible cz and the community's expectation that it will be the favorite son of Binance, but the essence behind this is the resource allocation of the exchange and the operation of the market maker behind it.

There are many strategic considerations of exchanges and interpretations of attracting liquidity through phenomenal product packaging. There are many KOLs in the market who can provide more attractive analyses, so I will not elaborate on them.

The core question is, without market-proven product performance, how can a short period of tens-fold growth be sustained? Long-term indicators like OI holdings, TVL stability, and revenue data are crucial for resilience. Crucially, the growth flywheel of "fees + buybacks" is what powers everything.

Applying this to $ASTER, with VCs, subsequent selling pressure from influencers (KOLs), potential selling pressure from BNB holders after Binance spot trading, and unproven demand for dark pool trading, it's unclear whether transaction fees will be consistently repurchased. Given this, is it premature to label it the next Hyperliquid?

3) Other rising Perp Dex platforms do have technological innovation expectations, although they have not been effectively verified. However, from a data perspective, their expectations are obviously exaggerated at this stage. For example, Lighter continues to attract refreshes in TVL and transaction volume data with zero transaction fees. Many people Shill it has surpassed Hyperliquid and the like.

This actually exposes the problem. How long can this transaction volume, which relies on subsidies and various farm airdrop expectations, last? What will happen if the airdrops are not as expected? What should we do if the technical narrative cannot stand the test? What really determines its market position must be the continuous "transaction fees + repurchases", and whether it can maintain a long-term balance and a win-win situation in the interests of all parties such as MM market makers, traders, and ordinary traders.

All of these require a long time, or the test of a complete market cycle. At least, it is impossible to make a conclusion too early now.

4) What worries me most is that people only see the Hyperliquid threat

@binance

side, but ignores its collateral impact on other Perp DEXs on L1 and L2.

Hyperliquid's new "transaction chain" positioning confirms the necessity of dedicated chain-level optimization for the trading experience. However, what will happen to other general-purpose chains that rely on trading applications? After all, attention and liquidity are limited. The rise of a new batch of transaction chains will inevitably have a direct impact on the ecosystem of other public chains.

Don't forget that the prosperity of the DeFi market relies on the full activation of market "innovation" and "liquidity" such as modularity and composability. If a single trading chain model like Hyperliquid can grab market share from CEX, it will definitely be a great achievement. But if the imitators are rolling around and only taking away market share from other L1 and L2 Perp DEXs, and most of the emerging Perp DEXs are still backed by CEX exchanges, then does the arrival of this market boom conform to everyone's original intention of the "decentralized revolution"?

Of course, you might argue that forcing exchanges to evolve is also progress, and I don't deny that. There's nothing wrong with HL's innovative evolution, nor is there anything wrong with the exchange-driven Perp DEX (newcomer CEX) strife. We also look forward to the revival of more authentic on-chain Perp DEX markets. Everyone's prosperity is the same; retail investors just want to get a piece of the action. OK, I hope you understand all of this and be a smart retail investor.