1. The Battlefield

A single DEX has broken the monthly volume record twice in two months. In July 2025, it became the first DEX ever to clear roughly $319 billion in perpetual (perp) volume in a single month. In August, it lifted the ceiling again, finishing near $398 billion in perp volume and setting a new record for any onchain venue to date. That exchange is Hyperliquid, a fully onchain central limit order book built on its own Layer 1, designed for low-latency matching and centralised exchange-grade throughput.

Despite these achievements, competition is getting fierce. September's volume suggests mounting pressure from emerging CLOB DEXs offering similar latency, lower fees, and aggressive incentives. What has propelled this push is CLOB-based DEXs that now present a credible challenge to CEXs by pairing deep liquidity with transparent and efficient price discovery.

In 2025, advances in the infrastructure (increasingly performant L1s, more advanced rollup SDKs, ZK proving infra and high-throughput DA solutions), combined with growing institutional demand for self-custodial derivatives, pushed CLOBs from promising experiments to core trading infrastructure in DeFi. Yet first movers like @dYdX v4 and @dexalot are not today's leaders, raising the question of what truly drives dominance in this rapidly evolving landscape.

This report maps the CLOB competitive dynamics across volumes, open interest, user growth, fee economics, and infrastructure choices, with a comprehensive analysis of the top 10 protocols using data from @DefiLlama, @tokenterminal, @artemis, and @flipsidecrypto as of September 2025.

2. Market Metrics Deep Dive

The core part of the analysis focuses on 10 of the largest onchain CLOBs currently live, with data from the last 30 days, as of when the data was extracted. These protocols are highlighted for their significant market share and open interest.

Total Market Analysis

Onchain derivatives trading has undergone a dramatic transformation in 2025, with Central Limit Order Book (CLOB) decentralised exchanges establishing unprecedented dominance in perpetual futures markets while maintaining a specialised niche in spot trading.

CLOB DEXs have achieved remarkable market penetration, commanding 92.04% of perpetual trading volume across the top 20 decentralised perpetual protocols, processing $607 billion in 30-day volume compared to just $ 7.95 billion, or $48.37 billion for non-CLOB protocols.

This represents a complete shift from the early DeFi era, where Automated Market Makers (AMMs) dominated all trading activities.

Conversely, the spot trading market remains overwhelmingly dominated by AMMs, with CLOB protocols accounting for only 12.4% of spot volume ($26.4 billion) versus 87.6% for AMMs and other protocols ($212.0 billion).

The stark contrast highlights the specialised nature of CLOB architectures, which excel in derivatives trading but face structural challenges competing with AMM liquidity provision in spot markets. This represents a significant and untapped opportunity for the ecosystem. If CLOBs could capture a meaningful share of the crypto spot market, it would dramatically expand their addressable market and revenue potential.

Open Interest Trends

​​Hyperliquid dominates onchain CLOB open interest with approximately $14.77 billion, representing 81.56% of the total. It is followed by @Lighter_xyz with $1.1 billion (6.07%), @edgeX_exchange with $1 billion (5.52%), and @edgeX_exchange with $546.9 million (3.02%). Paradex holds a growing position at $255 million (1.41%), dYdX v4 at $221 million (1.22%), and ADEN at $195 million (1.08%). @injective and @Aster_DEX have the smallest shares, with roughly $15 million (0.08%) and $7 million (0.04%),

More than a vanity metric, open interest (OI) measures committed capital and risk exposure beyond mere trading volume. When high open interest pairs with high volume, it signals deep liquidity, large position sizes, and institutional engagement. By contrast, low open interest and volume typically correspond to short-term activity by retail investors or other entities (such as farming airdrops or mercenary capital) or emerging protocols still building liquidity.

Hyperliquid's 77% share demonstrates an entrenched liquidity moat and a powerful network effect as liquidity attracts more liquidity; traders with size will gravitate to tight spreads and minimal slippage.

Something to consider, however, is that this level of concentration could also create systemic risk: any outage or security issue at Hyperliquid could disrupt the entire onchain derivatives market.

An ideal scenario would involve a more balanced distribution of open interest across multiple CLOBs, enhancing overall market resilience in the event of adverse conditions. Historical events in the crypto space, such as the platform failures of FTX, Mt. Gox, and Terra, demonstrate how excessive concentration can exacerbate systemic risk and trigger broader market crises.

User Growth Metrics

• Hyperliquid: 361,300 monthly active users (Sep 2025, Token Terminal), 78% growth in H1 2025, from 291,000 to 518,000 addresses

• Lighter: As of 2025, Lighter has over 171,000 depositors, with daily new wallet registrations increasing sharply from early in the year to a peak of approximately 6,000 in late September. (Dune Analytics)

• Aster: 330,000 wallet creations within 24 hours post-token generation; total claims exceed 2 million (perhaps inflated by airdrops and support by CZ), 545,529 trades in the latest week, peaked at $3.67 billion daily volume in September (Dune Analytics)

• dYdX v4: Stable user base of ~19,900 monthly active users, consistent weekly trading above 15,000 traders for more than two years (Token Terminal)

• Drift: 18,600 monthly active users aligned with the growth of Solana-based cross-margined perpetuals and expanding DeFi integrations (Token Terminal)

• Paradex: onchain data shows rising depositor counts, accelerating deposit growth since mid-2025, backed paradigm (Dune Analytics)

Hyperliquid exhibits the most mature and sustained organic user growth with institutional adoption. Aster's rapid surge is likely influenced by a push from CZ (Binance founder, who has recently joined as an advisor) and with lucrative stacked incentives, but long-term engagement remains to be seen. Despite being first movers with smaller but steady communities, dYdX v4 and Drift maintain consistent user retention, which could be attributed to their early market positioning.

Fee Revenue Analysis

Monthly fee performance reveals stark differences in monetisation efficiency and competitive positioning across the CLOB ecosystem. Analysis of income statements from 6 protocols shows divergent trends in both absolute revenue generation and fee capture rates.

September 2025 Monthly Performance:

• Hyperliquid: $68.93m (down from $113.73m in August).

• Aster: $21.28m (up from $16.57m in August).

• Drift: $4.10m (down from $4.87m in August).

• BlueFin: $2.56m (down from $3.24m in August).

• dYdX v4: $940,987 (relatively stable).

• ADEN: $396,919 in infrastructure fees (up from $303,556 in August).

Fee Capture Efficiency (September 2025):

• dYdX v4: 1.28% monthly fee rate ($0.94M ÷ $7.34B volume)

• Aster: 1.14% monthly fee rate ($21.28M ÷ $18.7B volume)

• Drift: 0.29% monthly fee rate ($4.1M ÷ $14B volume)

• ADEN: 0.25% monthly fee rate ($0.4M ÷ $15.9B volume)*

• Hyperliquid: 0.20% monthly fee rate ($68.93M ÷ $350.3B volume)

• BlueFin: 0.06% monthly fee rate ($2.56M ÷ $4.4B volume)

*ADEN's fees represent infrastructure/builder fees rather than direct trading fees

Revenue Trend Analysis (6-Month Performance):

• Hyperliquid: Strong decline from $113.73M (August) to $68.93M (September), indicating mounting competitive pressure despite volume leadership

• dYdX v4: Consistent monthly performance around $1M, suggesting a stable but limited user base

• Aster: Steep growth trajectory from $7.89M (July) to $21.28M (September), indicating rapid market penetration

• Drift: Modest decline from peak performance, facing competitive pressure in the Solana ecosystem

• ADEN: Growing infrastructure revenue model, up 30% month-over-month through backend monetisation

• @bluefinapp: Volatile performance with recent decline, struggling to maintain fee capture on Sui

Fee Model Categories

High-Efficiency Fee Models

These models capture a relatively high proportion of trading fees compared to volume, indicating efficient monetisation. dYdX v4 and Aster demonstrate the highest fee capture rates (1.28% and 1.14%, respectively), which may reflect either a premium positioning catering to sophisticated users or reduced competitive pressure in their specific market segments.

Notably, Aster’s elevated fee capture is likely driven by an incentivised user base supported through aggressive rewards programs, helping to sustain premium fee levels despite increasing competition. In contrast, dYdX’s longevity and established brand support consistent fee capture through loyal users valuing platform reliability and execution quality. While Aster’s fees might normalise if rewards fade, dYdX’s higher fees are likely sustained by strong trader loyalty and brand trust.

Scale-Driven Models

These models rely on high trading volumes and competitive fee rates to generate significant absolute revenue through scale advantages.

Hyperliquid's 0.20% rate reflects competitive pricing necessary to maintain volume leadership, though absolute revenue ($68.93M) still dwarfs competitors due to scale advantages.

Infrastructure Revenue Models

These models generate revenue primarily via backend or partner services, monetising B2B infrastructure rather than direct user trading fees. ADEN's growing backend monetisation (builder fees from partners) represents an alternative approach to direct user fees, capturing value through B2B infrastructure rather than B2C trading fees.

Competitive Pressure Indicators

The universal decline in fee capture rates across established protocols (particularly Hyperliquid's 39% month-over-month decline) reflects pressure from zero-fee competitors such as Lighter ($133B volume, $0 fees), forcing margin compression industry-wide. Lighter, however, still charges Market Makers and High-Frequency Traders. This trend is likely provisional until the potential fee switch; if total costs converge, we can likely expect some incentive‑driven flow to revert to the venues that execute best.

Protocols without Income Statements

• Lighter operates with zero retail trading fees but does charge market makers and high-frequency traders. It handles $133 billion in monthly volume, making it a significant competitive threat to fee-based DEX models.

• Paradex utilises a Payment for Order Flow (PFOF) model, charging institutional market makers a small fee (0.5-3 bps) for access to curated retail order flow, thereby allowing users to trade with zero trading fees. It also earns through yield percentages on user deposits, performance fees on asset management vaults, and spreads from integrated money markets.

• Injective Orderbook features a community-governed flexible fee structure, including negative maker fees (e.g., -0.005%) to incentivise liquidity, positive taker fees (~0.05%), and VIP discounts via INJ token staking and trading volume rewards to promote long-term engagement.

• EdgeX charges maker (0.015%) and taker (0.038%) fees, as well as an ambassador program that offers fee reductions and rebate points. Its revenue stems from trading, market-making, and liquidation fees, with rewards distributed through edgeX Points based on trading and community contribution.

Player-by-Player Breakdown

Tiers by 30 Day Perp Volume

Tier 1: $100b+

The CLOB ecosystem is distinctly concentrated, with two protocols accounting for nearly 80% of total volume.

Hyperliquid dominates with $350.3 billion in 30-day volume, capturing 57.9% market share and commanding 77% of open interest ($13.0 billion). It has a custom HyperBFT L1 architecture that delivers what others cannot: sub-second finality with zero gas fees for trades. The protocol runs "nano-sequencers" embedded within validators that achieve <50ms end-to-end latency while maintaining a degree of decentralisation.

This infrastructure advantage translates directly into tighter spreads and deeper books, creating a self-reinforcing liquidity moat. Professional traders gravitate toward Hyperliquid because adverse selection costs are minimised and execution certainty is maximised, especially during volatility spikes when other venues experience congestion.

Lighter follows with $133 billion (22.0% share), contributing minimal open interest compared to its volume. Operating its own low-latency on Ethereum L2 with custom ZK circuits for verifiable matching and liquidations. Lighter's zero-fee model (for retail and achieving 5ms latency through recursive SNARKs) creates a compelling retail value proposition. The protocol batches trade execution using zk-proofs, enabling sub-second settlement while inheriting Ethereum's security.

Sustainability of Lighters' zero-fee model for retail is something to consider. Although they still charge fees to MM and HFTs, a fee switch could occur in the future.

Tier 2: $15B-$50B

A group of challengers comprises the next tier, each with a distinct technological approach driving its market position.

EdgeX leads this pack with its hybrid architecture, managing $48.6 billion in volume and $52.6 million in fees. Using StarkEX, it combines ZK-validated offchain Rust matching engines (>200K ops/s, 10ms latency) with onchain settlement. This design strikes a balance between scalability and trust, leveraging offchain matching to achieve CEX-like speed while ZK proofs that are verified through onchain smart contracts to ensure integrity.

Aster trails with $18.7 billion in volume but demonstrates rapid momentum with $39.8 million in total fees for 2025. Operating on BNB Chain, Aster focuses on encrypted dark pools and yield-bearing collateral with up to 1001x leverage. With ~3s chain finality (and sub‑second blocks post‑upgrade), Aster enables fast on‑chain settlement focused more on active retail flows, while true HFT remains out of scope; the practical edge might come from access to BNB‑native liquidity.

Aster’s support from CZ (advisor) and the broader Binance ecosystem provides distribution advantages, though the sustainability of such leverage levels remains questionable during market stress.

ADEN ($15.9b volume) is a white‑label DEX built on @OrderlyNetwork’s L2 infrastructure (using @celestia DA), routing orders into Orderly network’s unified CLOB that is shared by 50+ integrated DEX frontends. This helps to avoid fragmented, isolated books and to tap deeper, pooled liquidity. Protocol rent comes from ecosystem revenue sharing rather than direct user fees. It commands $15.9 billion in volume, with a technical architecture that enables 1-second finality and 5k TPS.

Drift rounds out this tier with $14 billion volume and $24.8 million in fees, leveraging Solana's 400ms finality for its innovative "liquidity trifecta."

The protocol has a mechanism called the Liquidity Trifecta, which combines an onchain CLOB (DLOB), a virtual AMM, and JIT auctions, ensuring deep liquidity even during volatile periods. Drift's GPU-accelerated keepers reduce matching latency to <10ms, while its onchain risk engine enables efficient cross-margining across multiple assets.

The protocol's success stems from solving the bootstrapping problem: when CLOB liquidity is thin, the AMM provides backup depth, while JIT auctions capture additional flow.

Tier 3 $3B-$15B

Paradex ($9.4 billion volume) has built an L2 appchain using the SN stack (CairoVM) on Ethereum, adopting a retail-friendly approach and offering zero trading fees for retail users across more than 250 markets.

An approach that leads with first principle thinking, it replaces the exploitative "cancel-priority" system with a dual-market structure. Request Price Improvement (RPI) auctions protect retail traders. At the same time, Request for Quote (RFQ) supports private institutional trades, delivering superior zero-fee execution within a fully integrated, capital-efficient onchain prime brokerage.

The protocol features ZK-encrypted accounts that hide positions, entries, exits, and PnL, attracting privacy-conscious institutional flow. With 200ms finality and a unified interface spanning options, pre-markets, spot, and vaults, Paradex offers a comprehensive trading ecosystem.

While not yet at Hyperliquid’s scale, Paradex’s modest open interest of roughly $255 million indicates growth potential. Rising volumes and increasing deposits suggest substantial and expanding activity, though sustainability remains to be proven, especially given incentive programs like Season 2 XP points. Nevertheless, Paradex’s retail-focused design promotes a level playing field that is unavailable on many other DEXs, which are constrained by cancel-priority, providing a defensible position for long-term user retention.

dYdX v4 ($7.34 billion volume) operates as a first-generation sovereign appchain built on the Cosmos SDK, featuring a distributed order book maintained across a network of validators. While fully decentralised, its architecture is characterised by 1-second block times and throughput of approximately 10,000 TPS, but lags behind newer, higher-performance designs.

Its declining market share, despite strong brand recognition, underscores the critical role of technical performance in highly competitive markets. Additionally, operating as an isolated Cosmos SDK appchain may create friction in attracting users, since more successful ecosystems typically build on base layers that provide broader access to liquidity and user networks. This isolation could limit dYdX’s ability to scale user acquisition and foster ecosystem growth.

BlueFin ($4.4 billion volume) leverages Sui's Move smart contracts for gasless trading and parallel block production via Narwhal+Tusk consensus.

Its 297,000 TPS theoretical throughput on Sui's DAG architecture provides significant scaling headroom, though current volumes don't stress these limits. The protocol's focus on HFT-grade latency positions it for institutional adoption as Sui's ecosystem matures.

Injective ($3.05 billion volume) is an appchain built on the Cosmos SDK, utilising frequent batch auctions (FBA) to mitigate frontrunning. The protocol's finance-optimised L1, featuring permissionless validators and cross-chain IBC interoperability, supports advanced derivatives use cases.

3. Performance & Feature Comparison

Latency Benchmarks

Latency performance reveals clear architectural advantages:

• Lighter (ZK L2): 5ms practical latency through L3 zk-rollup optimization.

• EdgeX (StarkEx): 10ms via hybrid off-chain matching with onchain settlement.

• Hyperliquid (Custom L1): 70ms with HyperBFT consensus but zero gas trades.

• Drift (Solana): 400-480ms leveraging Solana's high throughput.

• dYdX v4 (Cosmos): 1,000ms with distributed validator orderbook.

• Paradex: 200ms latency optimised by using Cairo VM enables efficient computation and fast proof generation, contributing to low-latency transaction execution.

• @bulletxyz_: Approximately 1 ms latency observed on testnet.

• @MonacoOnSei: Less than 1 ms latency reported on testnet.

Throughput Metrics

Maximum theoretical throughput varies dramatically by architecture:

• Hyperliquid: 200,000 TPS practical on custom L1.

• BlueFin: 297,000 TPS peak on Sui's parallel execution.

• Injective: 25,000-400,000 TPS mixed, depending on configuration.

• Lighter: 10,000 TPS practical on L3 infrastructure.

• Paradex: 7000 TPS Practical on L2 ZK appchain infrastructure.

• Bullet: 7,840,000 TPS testnet performance.

• Monaco: 12,500 TPS testnet performance.

Order Types and Advanced Features

Order type sophistication correlates with protocol maturity and target users:

• Most Comprehensive: Hyperliquid (Market, Limit, Stop Market, Stop Limit, Scale, TWAP).

• Standard Suite: Most protocols support Market, Limit, and Stop orders.

• Basic Implementation: Newer protocols often launch with Market/Limit only.

Margin Systems and Cross-Margin Capabilities

Cross-margin support has become a table-stakes requirement, with all analysed protocols offering cross-margin capabilities. However, protocols like Hyperliquid, Drift, and ADEN distinguish themselves through more advanced margin system designs. Such as:

• Hyperliquid implements a flat margin rate system, maintaining consistent margin requirements across position sizes, which supports better leverage management and reduces forced liquidations amid market volatility.

• Drift, operating on Solana, enables cross-margining across multiple assets and positions by leveraging fast finality and native multi-asset support, facilitating more effective capital allocation for complex trading strategies.

• ADEN leverages Orderly Network, which uses LayerZero’s cross-chain messaging protocol, to provide unified margin and liquidity management across multiple blockchains.

Liquidation Mechanisms

Protocols differ in three liquidation mechanisms, each optimising a different axis: price discovery, speed, or throughput.

Onchain auctions (Hyperliquid, Edgex, Aster, Aden, Drift, Bluefin, and Injective)

• What: an under-collateralised position opens an auction; liquidators bid and repay debt.

• Pro: competitive pricing, decentralised execution, fairer exits.

• Trade-off: needs active bidders; stress can slow or partially fill.

Leeper‑based (dydx v4)

• What: designated bots auto‑execute at a protocol “fillable” price against the book.

• Pro: fast, predictable fills; tunable penalties/insurance.

• Trade-off: infra dependence and some centralisation surface.

Zk‑secured (Paradex)

• What: liquidation runs off‑chain; a validity proof finalises on‑chain (often batched).

• Pro: high throughput, low gas, strong integrity guarantees.

• Trade-off: increased architectural complexity and reliance on the prover/DA.

Onchain auctions ZK verified (Lighter):

• What: Liquidations occur fully on-chain within a zk-rollup using zero-knowledge proofs, employing cryptographically verified onchain auctions.

• Pro: Provides transparent, fair, and manipulation-resistant liquidations, combining centralised exchange speed with DeFi security guarantees.

• Trade-off: Complexity of zk-rollup systems and dependence on zero-knowledge proof technology.

4. CEX vs DEX CLOBs

CEXs still dominate both spot and derivatives trading by absolute volume, but competitive dynamics are shifting across both markets as DEXs gain more institutional and retail adoption.

Fig. 7 illustrates a clear upward trend in the DEX futures market share (including perpetuals), rising from under 2% in early 2022 to approximately 8% by September 2025. The steepest acceleration occurs during 2024-2025, with DEX futures volume reaching meaningful percentages of total derivatives markets for the first time.

This trend correlates with the notable infrastructure maturation we have mentioned. The CLOB data we used for 30-day volumes supports the notion that they are likely an underlying driver: CLOB DEXs represent 92.04% of onchain perpetual volume, processing $607 billion compared to just $48.37 billion for non-CLOB protocols. Platforms like Hyperliquid and Lighter have achieved sub-second finality and execution quality comparable to CEXs, meeting the performance requirements of institutional traders.

Fig. 8 reveals volatile but substantial DEX adoption, with onchain volume reaching 30-60% of CEX levels during high-activity periods in 2025. The spikes could demonstrate growing retail comfort with DEX alternatives, particularly during market stress when CEX withdrawal limitations become apparent. Such as the failures of CEXs, such as FTX, resulting in a significant loss of funds for retail traders.

CLOB DEXs currently capture an estimated 12.4% ($26.4 billion) of onchain spot volume compared to $212 billion for AMM DEXs, indicating a potential disconnect between these trading models. It seems possible that the simplicity and lower friction of AMM swap interfaces and aggregators contribute to their broader adoption, especially among retail traders migrating from centralised exchanges.

Additionally, the fact that many CLOBs operate on Layer 1 or Layer 2 chains, requiring users to bridge assets from more composable ecosystems, might add onboarding complexity, which could limit their growth.

While CLOB DEXs perform strongly in perpetual contract trading ($607 billion), the substantially larger spot market presents a significant growth opportunity that these order book platforms may not yet fully capitalise on.

User Experience Gaps

CEXs still lead with sleek interfaces, sub-second fills, and comprehensive support services. The advanced order types they provide, such as iceberg, multi-leg, and conditional orders, remain more robust than what many CLOB DEXs currently offer.

Despite that, DEX CLOBs have narrowed the gap considerably. Platforms like Hyperliquid are now on par with CEX apps in terms of speed and usability. Latency is consistently below one second, and core order types, including market, limit, stop, and TWAP orders, are widely supported.

However, gas fees, wallet friction, and inconsistent availability of complex orders could remain obstacles that limit mass adoption, especially in the short term.

Regulatory Advantages and Disadvantages

CEXs generally benefit from established regulatory frameworks in key jurisdictions, such as the SEC or the UK FCA, which can provide institutional trust and investor protections. However, many CEXs also operate offshore or outside of these familiar frameworks, so not all centralised exchanges offer the same degree of regulatory clarity or oversight.

CLOB DEXs, by contrast, provide permissionless and borderless access, secured by self-custody with no KYC requirements, offering users greater autonomy but facing an evolving and often ambiguous legal and regulatory landscape. New regulations, such as MiCA in the EU or updated SEC guidance, raise uncertainty around issues like validator liability and protocol enforcement, which remain particular concerns for institutional participation where legal certainty is valued.

For institutional players considering centralised versus decentralised trading, trust and regulatory clarity remain important but context-dependent factors, and both models present distinct trade-offs regarding oversight, accessibility, and user protections.

Trust Assumptions

There is a fundamental difference in trust models between centralised and decentralised exchanges. CEX users place trust in the solvency of centralised custodians and the existence of insurance funds, accepting some level of counterparty risk.

DEX users rely on the security of smart contracts, the accuracy of oracle data, and transparency in governance. However, wide variations in audit quality and governance practices among DEXs create differing risk profiles.

Feature Parity Analysis

The Spot Trading Challenge

While CLOBs dominate perpetuals, holding 92.63% of market share, they struggle in spot markets, where they have only a 12.4% share. This disparity reveals fundamental structural challenges that prevent CLOB architectures from competing effectively with AMM liquidity provision.

Why CLOB Spot Lags Behind AMMs:

• Liquidity Bootstrapping: Creating active maker inventory across hundreds of trading pairs requires significantly more capital and sophistication than passive LP provision

• User Experience Friction: Order placement requires a higher cognitive load than simple swaps, while gas fees add transaction costs

• Fragmented Routing: Without shared orderbooks, liquidity fragments across different CLOB interfaces, reducing overall depth

• Market Making Economics: Professional makers focus on high-volume pairs where fees justify the capital requirements, leaving long-tail assets underserved

This creates a self-reinforcing cycle where retail traders default to AMM swaps for convenience, while market makers focus on derivatives, where sophisticated order types offer more straightforward value propositions.

5. Ecosystem Mapping

Infrastructure Layers and Enablers

Data Availability Infrastructure Usage Among the 10 CLOBs:

• Lighter: Inherits Ethereum DA

• ADEN DA through Orderly

• Other protocols: Most rely on their base chain DA (Hyperliquid's custom L1, Solana for Drift, BNB Chain for Aster)

ZK Infrastructure Deployment:

• Lighter: Full ZK-rollup L2 with recursive SNARKs for batch-proof verification

• EdgeX: ZK-validated offchain matching with StarkEx validity proofs for integrity

• Paradex: ZK-encrypted accounts using SN stack and relying on SHARP (Starknet's shared prover infrastructure), with the chain being built in Cairo (language optimised for ZK proving) for privacy-preserving trading

• Non-ZK protocols: Hyperliquid (custom consensus), Drift (Solana native), ADEN (Orderly optimistic), dYdX v4 (Cosmos SDK), Aster (BNB native), BlueFin (Sui native), Injective (Cosmos SDK)

Shared Liquidity Backend Models:

• ADEN: Full shared liquidity through Orderly Network serving 50+ frontend interfaces

• Injective: Native exchange module providing protocol-level shared orderbooks

• BlueFin: Leverages Sui's DeepBook for native shared orderbook infrastructure

• Standalone models: Hyperliquid, Lighter, EdgeX, Aster, Drift, Paradex, dYdX v4 operate isolated orderbooks

Oracles and Real-time Market Data: Chainlink and Pyth supply low-latency feeds that underpin accurate mark prices and liquidation engines across CLOB venues, with most protocols using PythLazer for sub-second price updates.

Cross-chain Routing: Inter-Blockchain Communication (IBC) protocol enables dYdX v4 and Injective to facilitate cross-chain margin trading within the Cosmos ecosystem. @LayerZero_Core and @wormhole provide cross-chain messaging and liquidity routing, supporting asset transfer and order routing for protocols such as EdgeX and ADEN (via Orderly).

@hyperlane's modular cross-chain messaging protocol enables secure and fast communication across multiple blockchains. Paradex is already using it, and projects like Bullet plan to utilise it when they launch for scalable multi-chain operations with low latency and trust-minimised message passing.

It is worth highlighting that these interoperability systems primarily support asset and message transfer between chains rather than true atomic multi-venue settlement. Native multi-chain orderbook synchronisation and settlement remain under active development and are not broadly implemented.

Appchains vs General-Purpose Integration

L1 Appchains: Built for performance and control, e.g., Hyperliquid's HyperBFT L1 and Injective's Cosmos SDK L1 (powering Injective orderbook) with native exchange modules for shared liquidity and MEV-aware ordering.

L2/L3 Appchains: Rollups that embed CLOB logic atop general L1s, e.g., Lighter on its own custom-made ZK L2 and EdgeX on StarkEx L2, balancing low-latency matching with access to broader DeFi liquidity and proofs-based integrity.

General-purpose L1s: Parallel and low-latency L1s can host high-performance CLOBs, e.g., Sui with DeepBook as a native shared orderbook, @SeiNetwork with an exchange-optimised stack, and @monad's EVM-compatible parallel execution, all aiming at tight spreads and fast finality for orderbook markets.

We will delve deeper into various architectural designs in upcoming articles, focusing on both appchain architectures and building on top of high-performance chains within a composable, general-purpose environment.

6. Leaders, Laggers, Winners and Losers

Current Market Leader

Hyperliquid sets the pace with a custom, high-performance Layer 1, delivering sub-second fills and a deep order book. In 2025, this translated into record monthly volumes and substantial fee revenue. For now, no one has come close to it.

Emerging Winners

• EdgeX uses hybrid off-chain matching on StarkEx to gain market share through speed and rapid listings.

• Lighter, built on its own custom ZK L2 with a zk-verifiable execution architecture, is taking a zero-fee approach to aggressively onboarding retail traders, growing monthly active users and open interest.

• Paradex’s ZK L2 offers a unique revenue model is designed like a diversified financial institution. Its primary engine is a Payment for Order Flow (PFOF) system, where it charges institutional market makers a small fee (0.5-3 bps) for access to curated retail trades, allowing the platform to offer its users zero trading fees. Beyond trading, Paradex captures value through multiple synergistic streams, including taking a percentage of the yield generated from user deposits, a performance fee on its asset management vaults, and spreads on its integrated money markets.

• Aster is growing rapidly, driven by a combination of incentives, KOL marketing, CZ advocacy, and high listing velocity, despite higher fees.

• Orderly Network’s no-code perp DEX launcher powers ADEN, consolidating multiple frontends into a single unified order book. This scales liquidity and distribution faster than traditional single-venue approaches.

Emerging Key Players to Take Note of

• Bullet is a ZK rollup appchain built on Solana, aiming to replicate Hyperliquid-style order book trading native to that ecosystem and address scalability and low-latency needs for perpetual trading.

• Monaco is developing a permissionless, low-latency CLOB infrastructure on Sei, which emphasises composability and microsecond transaction latencies to enable a unified and modular ecosystem rather than isolated appchains.

Strategic Laggers

• First-generation appchains face mounting challenges. dYdX v4 processes $7.34 billion volume but holds just $221 million open interest (1.22% share), suggesting limited conviction from larger traders. It's possible that 1-second finality and IBC bridging create friction compared to newer implementations, while governance-based listings have slowed market expansion as competitors have added tokens rapidly. The protocol maintains premium fee capture (1.28%), indicating loyal users value execution quality, but whether this sustains against zero-fee alternatives remains to be seen.

• Platforms that lack clear differentiation. BlueFin ($4.4 billion) and Injective ($3.05 billion) operate on capable infrastructure but haven't yet established clear competitive moats. BlueFin leverages Sui's parallel execution, while Injective offers batch auction MEV protection; however, neither has driven significant adoption. These protocols may find defensible niches as markets mature, or could face continued pressure from scale leaders above and specialised competitors below.

• Some appchains (Injective + dydx) face distribution headwinds as general-purpose L1s improve. Cross-chain bridging requirements add onboarding steps that native deployments avoid. As Sui, Solana, and BNB Chain demonstrate comparable performance with existing ecosystems and liquidity, the distribution cost of some chains for example, could become harder to justify. This dynamic could reverse if appchains deliver meaningful technical advantages or if cross-chain infrastructure improves significantly, but current trends favour composable environments.

Current Winning Strategies

• Deliver tight spreads and low, predictable latency

• Enable shared liquidity across multiple frontends

• Leverage broad distribution via white-label liquidity stacks

• Create fair, risk-aligned fee structures for makers

• Implement MEV-aware matching to reduce predatory flow

Performance excellence forms the foundation. Tight spreads and sub-second execution attract both liquidity providers and traders. Platforms like Hyperliquid demonstrate how consistent low-latency matching drives volume growth and market maker retention.

Shared liquidity models aim to solve fragmentation challenges. Injective and Sui enable multiple frontends to access a unified order book depth, improving pricing efficiency compared to isolated liquidity pools.

White-label infrastructure, such as Orderly Network's L2, allows DEXs like ADEN to distribute liquidity across multiple interfaces while centralising backend matching. This separates infrastructure competition from user acquisition, letting frontends focus on interface design and user experience.

Zero-fee models serve as effective market entry mechanisms, particularly when challenging established onchain CLOBs like Hyperliquid. Platforms like Lighter achieve rapid growth initially by eliminating trading costs, forcing established players to compete on execution quality and pricing rather than relying solely on liquidity advantages. While long-term sustainability requires eventual monetisation, aggressive pricing disrupts to obtain more market share.

MEV-resistant mechanisms become increasingly critical as volumes grow. Injective's fair batch auctions reduce front-running and toxic flow, though these systems require continuous adaptation as new extraction methods emerge.

Failed Approaches and Risks

• Slow and costly execution on Layer 1 chains caused delays and high fees

• Complex onboarding trails, simpler AMMs are currently limiting user adoption

• Centralised sequencers raise trust and front-running concerns

• Excessive maker rebates invite manipulative "toxic" liquidity

• Governance slows new market listings, hurting token diversity

• Liquidity concentration risks systemic shocks

Using dYdX as a case study, onchain trading at scale tends to migrate to architectures that deliver lower latency and lower cost. Projects that remain on stacks with slow finality and high fees will lose competitiveness, so teams move to faster rollups and appchains.

Yet onboarding on most CLOBs still lags AMMs. Centralised sequencers remain a single point of failure that can enable manipulation or censorship. dYdX’s shift to decentralised validator-hosted order books improved trust and censorship resistance but introduced operational complexity and new scaling constraints.

Incentive design is another friction. Generous maker rebates often drive cancel spam and opportunistic tactics that impair price discovery, so protocols are iterating on fee schedules and the maker-taker balance.

Governance-led listings trail AMMs with near-instant asset onboarding, limiting long-tail liquidity and user choice. There is also the risk that concentrating liquidity in a single venue magnifies the risk of outage, so resilience requires multiple deep venues with credible failover capabilities.

Future Market Structure Predictions

• Consolidation into 3-5 major platforms anchoring liquidity

• Growth of embedded liquidity within wallets and apps

• Modular architectures separating execution from settlement

• Maturation of Layer 1 chains as credible CLOB hosts

• Increasing compliance at sequencers, builders, and interfaces

• Evolution toward hybrid order matching for fairness and speed

• Aggressive spot market expansion beyond the current 11% share

Consolidation is likely to favour dominant DEXs, while smaller, specialised platforms will focus on niches such as privacy, exotic assets, or region-specific regulations. Market leadership will depend not only on execution quality, considering factors such as fees, slippage, and latency, but also critically on the depth and activity of liquidity that attract and retain market makers and active traders.

Liquidity begets liquidity: deeper, active pools draw market makers who provide tighter spreads and higher volumes, which in turn reinforce the platform’s strength. This virtuous cycle is fundamental for sustainable growth and competitiveness.

Wallets and app integrations will bring more liquidity, rather than relying on standalone exchanges. Phantom's perpetuals via Hyperliquid and soon MetaMask's integration plans demonstrate how CLOBs will become liquidity-as-a-service layers. Developer experience and distribution partnerships will be as important as raw execution speed.

Modular designs with zero-knowledge rollups enabled by a maturing ZK infra stack and specialised data availability

Layers will decouple execution from settlement, enabling faster trading, enhanced privacy features, and improved fault recovery.

General-purpose Layer 1 chains, such as Monad, Sei, Aptos, and Sui, @megaeth_labs, @rise_chain, @FogoChain, are emerging as strong hosts for CLOBs, thanks to their smooth onboarding, maker integration, and aggregator access at launch.

Compliance will focus on key infrastructure points, such as sequencers and transaction builders. Expect hybrid permissioning and audit trails to appear while maintaining core decentralised settlement.

Order matching will evolve into hybrid models that combine continuous order books with batch auctions or dual-flow designs. This balances speed and fairness. Injective (with Fair Batch Auctions) and dYdX v4 (utilising hybrid off-chain/on-chain matching) are notable examples, reducing front-running and enhancing trade outcomes.

CLOBs will aggressively target spot market expansion through shared liquidity infrastructure like Injective's exchange module and Orderly's cross-chain aggregation, hybrid AMM-CLOB wallet integration, and gasless trading via account abstraction. Since spot markets are 2-4x larger than perpetuals, capturing meaningful share could expand addressable markets from $26.4 billion to over $200 billion.

Finally, a considerable opportunity exists for onchain CLOBs to capture more spot market share from AMMs by sharing liquidity across multiple apps, routing trades inside wallets to combine AMM and CLOB prices seamlessly, lowering trading costs using Layer 2 technology, and focusing incentives on primary blue-chip tokens. While AMMs still lead in long-tail and smaller tokens, growth in CLOBs on popular trading pairs could significantly boost revenue.

7. Closing Summary

DEXs have entered a new era through new advanced designs. The leading CLOB DEXs now process hundreds of billions of dollars in monthly volume, with CEX-grade execution; however, competition is forcing key strategic choices that will determine which ones survive.

Zero-fee models are resetting pricing across the sector. Lighter and Paradex force traditional exchanges to match pricing or justify premiums through execution quality, listing or more incentives. The sustainability question remains open. Current economics depend on token incentives and alternative revenue streams.

Architectural advantages are shifting. Appchains optimised for latency when general-purpose L1s couldn't compete. An increase in user activity and experimentation on Sui, Solana, and BNB Chain now hints that monolithic chains may deliver comparable performance with better distribution and composability. The question becomes whether protocols need full-stack control or benefit more from existing ecosystems. Both models likely persist, optimising for different use cases.

The spot market gap represents a structural challenge. CLOBs dominate derivatives but hold minimal spot share. AMM still maintains advantages in passive liquidity provision and a simpler UX. Breakthroughs require addressing fundamental design constraints and aligning with what specific areas of the market really want.

Consolidation toward three to five platforms appears likely as liquidity concentration self-reinforces. Mid-tier protocols face pressure from scale advantages above and specialised competitors below. First-generation platforms demonstrate that technical adequacy without distribution or sustained user retention is insufficient.

This report establishes baseline metrics for tracking competitive dynamics. Subsequent analysis will examine the architectural trade-offs of CLOBs, the economics of modular infrastructure, and spot expansion strategies in greater detail.

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