Development Divergence of Perpetual Contract DEXs: Two Market-Based Development Models

Chainfeeds Guide:

Hyperliquid prioritizes ultimate performance, while Orderly positions itself as liquidity infrastructure.

Source:

Author:

0xResearcher

Opinion:

0xResearcher: Over the past two years, the decentralized derivatives market has experienced explosive growth. From the initial experimentation with on-chain perpetual contracts to multiple protocols now achieving daily trading volumes in the billions of dollars, this niche sector has become one of the most dynamic drivers of DeFi growth. Market participants have diverged in their choice of models, reflecting different priorities and solutions to key challenges. The core difficulties mainly focus on two points: First, how to provide performance and user experience close to centralized exchanges (CEX) while maintaining decentralization. The advantages of CEXs lie in their outstanding speed, depth, and order execution, which are precisely the core needs of many DeFi users. Second, liquidity fragmentation among different DeFi protocols often leads to severe slippage for large trades, discouraging professional traders. Additionally, some users expect a more comprehensive and integrated experience, rather than being forced to switch between multiple vertical platforms. Against this backdrop, Hyperliquid and Orderly have taken distinctly different paths: the former pursues ultimate performance, directly targeting retail traders and striving to replicate the depth and speed offered by centralized exchanges; the latter positions itself as "liquidity infrastructure," serving more partners and attempting to solve the long-standing problem of fragmented liquidity in DeFi. The differences between these two approaches reflect the varying understandings and strategic choices of DeFi derivatives projects regarding efficiency, openness, and ecosystem development during rapid expansion. Hyperliquid’s approach is straightforward: to build an on-chain version of Binance. Through a fully on-chain order book and native liquidity engine, it offers a trading experience close to that of a CEX. For professional traders, depth and speed are essential, and Hyperliquid captures this need by providing low latency and transparent settlement, ensuring both a familiar user experience and enhanced fund security. Hyperliquid currently holds over 70% market share in the decentralized perpetual contract DEX market, almost dominating the field. In contrast, Orderly does not compete for users head-on but instead takes the "infrastructure layer" route. Through a three-layer architecture—asset layer, engine layer, and settlement layer—it opens its order book and matching engine to external applications, enabling different frontends to quickly launch derivatives trading. Simply put, Orderly acts more like a trading intermediary hub: users place orders on frontend applications, which are routed to the Orderly system for matching, settlement, and fund transfers. The core product, Orderly Chain, handles cross-chain data transmission and ledger recording, ensuring system scalability. With this model, every integrated application can share liquidity, avoiding the persistent problem of "liquidity fragmentation." Recently, Orderly has further enhanced its appeal by integrating Ceffu custody, introducing Kronos Research quantitative strategies, and launching OmniVault, which allows unified management of multi-chain assets with high yields—annualized returns over the past 30 days have even reached 26%. Hyperliquid emphasizes ultimate performance and user experience, while Orderly focuses on scale effects and ecosystem empowerment; their paths are clear and distinctly different. Hyperliquid’s advantage lies in its extreme stickiness to retail traders. Traders care most about speed, depth, and stability, and when these elements are optimized, strong network effects are created: more users bring deeper liquidity, which in turn attracts even more users, amplifying the snowball effect. The moat of this model is the high switching cost for high-frequency users—once accustomed to the platform’s interface and speed, it is difficult to switch. Orderly’s moat comes from its "selling water to gold miners" network effect. It does not rely directly on a single frontend application but expands its scale by providing underlying services to the entire ecosystem. As more frontends integrate, the liquidity pool becomes thicker, benefiting all partners and ultimately forming a positive cycle. Hyperliquid’s challenge is how to maintain innovation and efficient user acquisition in a fiercely competitive track; Orderly’s challenge is how to continuously ensure technological and service leadership while rapidly expanding and broadening its ecosystem boundaries. From an industry perspective, the two models are not mutually exclusive, and a trend toward integration may emerge in the future: infrastructure providers may launch their own applications, while application-based platforms may export their technical capabilities, ultimately forming a more interconnected and diversified DeFi derivatives landscape. As the market grows and institutional capital enters, the different paths of Hyperliquid and Orderly may jointly drive the decentralized derivatives market toward its next stage.