Perp DEX Investment Brief: On-Chain Fee Revenue 2024
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On-chain perpetuals scaled fast in 2023. US regulators fined three DeFi platforms for unregistered trading. Review the fee thesis before allocating capital.
Frequently Asked Questions
- A perpetual DEX is a decentralized exchange that lets traders open margined, non-custodial positions on an asset's price with no expiration date, using on-chain smart contracts instead of a centralized order book operator to hold funds and settle trades.
- Perpetual DEXs charge opening, closing, and funding fees on every margined position. Protocols route a share of that fee flow to liquidity providers, stakers, or validators instead of a corporate treasury, which is the core mechanism capital allocators are pricing when they evaluate this sector.
- Yes. United States regulators have already brought enforcement actions against decentralized platforms offering margined perpetual contracts without registration, and global standard-setters have flagged margin concentration and interconnectedness in decentralized finance as a distinct financial stability risk that allocators should factor into due diligence.
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Tags:
Perpetual DEX
DeFi
On-Chain Derivatives
Capital Allocation
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