The decentralized derivatives market has experienced a rapid rise over the past two years. From the pilot of on-chain perpetual swaps to multiple protocols now exceeding billions of dollars in daily trading volume, this segment has become one of the most explosive growth areas in DeFi. Projects have shown significant divergence in their model choices, driven by varying priorities and solutions to key challenges.

We will discuss the two largest perpetual contract DEXs as examples: Hyperliquid prioritizes extreme performance to attract users who seek a trading experience comparable to centralized exchanges, focusing on speed and efficiency; Orderly positions itself as "liquidity infrastructure", aiming to provide the basic liquidity needed for the thriving decentralized derivatives ecosystem and solve the historical problem of dispersed liquidity in DeFi.

These different paths are chosen to address several key market challenges. A major issue is the need to replicate the performance and user experience of centralized exchanges (CEXs) while maintaining decentralization. CEXs offer superior speed and order execution, which many DeFi users expect.

Another challenge is the fragmented liquidity across different DeFi protocols, making it difficult for traders to execute large orders without significant slippage. Furthermore, many users seek a more comprehensive and user-friendly DeFi experience, rather than having to navigate multiple specialized platforms. Hyperliquid and Orderly's differing approaches reflect their attempts to address these challenges and capture different segments of the growing decentralized derivatives market.

Hyperliquid: A C-end platform driven by extreme performance

Hyperliquid's strategy is straightforward: to create an on-chain version of Binance. Hyperliquid's success lies in its ability to address the core needs of traders: depth and speed. For professional traders accustomed to centralized platforms, deep liquidity and low latency are essential, and Hyperliquid offers a near-CEX experience. The transparency of its on-chain settlement further ensures fund security. Hyperliquid is arguably a premium consumer product, capturing user attention through performance and user experience. Hyperliquid's architecture features a fully on-chain order book, a rarity among decentralized exchanges (DEXs).

Hyperliquid leads the decentralized perpetual swaps (DEX) market, holding over 70% of the market share. Hyperliquid operates a native liquidity engine, offering tighter spreads and superior market depth, rather than relying on external liquidity providers.

Orderly: Liquidity and Infrastructure Supporter

Unlike Hyperliquid, Orderly doesn't position itself as a single consumer-facing trading platform, opting instead for an infrastructure approach. It provides an order book, matching engine, and liquidity support, enabling other front-end projects to quickly launch derivatives trading, thereby fostering an open ecosystem. The Orderly Network implements the asset trading process through a three-layered structure: the asset layer, the engine layer, and the settlement layer.

Simply put, Orderly acts like a "trading intermediary platform." When you place a buy or sell order on an app, that app (we call it an agent) sends your order to Orderly. Orderly's system automatically matches you with a suitable buyer or seller. Once the transaction is successful, the system automatically updates your account funds and holdings.

 How Orderly implements the asset transaction process

Among them, the settlement layer Orderly Chain is the core product of the Orderly Network's full-chain infrastructure, responsible for cross-chain data information transmission, transaction settlement and ledger data recording.

The value of this model lies in the fact that Orderly doesn't rely on a single application, but rather achieves economies of scale by serving a wider range of partners. Every front-end connected to Orderly can share its underlying liquidity and matching capabilities, thus avoiding the problem of "liquidity fragmentation." In the long run, Orderly will serve more like the "infrastructure layer" of the derivatives market, empowering diverse projects.

 Orderly Ecosystem Summary

At this stage, Orderly has built a huge ecological network by integrating multiple projects. The release of this infrastructure advantage is the key reason for its recent outstanding performance. As the underlying protocol, Orderly ranks among the top 3 on Perp Dex in terms of transaction volume and revenue, fully verifying the commercial value of the ecological model.

 Orderly ranks among the top three in Perp Dex infrastructure transaction volume

Furthermore, leveraging its multi-chain advantages, Binance recently integrated Ceffu (Binance's institutional custody partner) to establish its own OmniVault. Users can store multi-chain assets in this OmniVault, with Ceffu protecting their security and professional quantitative firm Kronos Research guaranteeing returns. OmniVault's TVL has been rising, and its returns have continued to rise. Over the past 30 days, its annualized return has reached 26%, an impressive figure.

Competitive advantages and moats of the two models

Hyperliquid's strategy is straightforward: build a platform that traders can't live without. Just as it's difficult to switch to a different mobile operating system once you've become accustomed to it, once professional traders become accustomed to a platform's interface and speed, the cost of switching platforms is high.

The moat of this model is user stickiness. What do traders value most? Fast speed, smooth transactions, and sufficient liquidity (simply put, the ability to buy and sell whenever they want). When Hyperliquid achieves these perfections, a snowball effect will emerge: the more people trade, the better the liquidity; and the better the liquidity, the more people will trade.

Orderly takes a completely different approach—it doesn't directly serve users, but instead provides underlying technical support to other companies looking to build trading platforms. Just like a power company doesn't directly sell appliances, but all appliances rely on its electricity. This "selling water to gold diggers" model has a unique advantage: the network effect. As more platforms connect, the liquidity of the entire network will grow, benefiting all partners.

Hyperliquid's user-centric model offers the advantage of direct control over the user experience, rapid response to market demand, and strong brand recognition. However, this requires continuous investment in user relationships in a highly competitive market. Orderly's infrastructure model is characterized by diversified revenue streams, independent of the success or failure of a single application, achieving stable growth by serving the entire ecosystem. However, this model is highly dependent on ecosystem partners and requires continuous network expansion to maintain competitiveness. Both models have their own development logic and market positioning, representing different business approaches in the DeFi space.

Looking to the future

These two models are likely to continue evolving on their respective tracks, with interesting convergence trends emerging. Hyperliquid will need to continuously innovate amid fierce competition, potentially expanding into AI-assisted trading and diversified financial products. However, it faces challenges from rising user expectations and customer acquisition costs. Orderly will benefit from the scale benefits of its infrastructure model. By aggregating multi-chain liquidity and expanding its service offerings (through innovative products like OmniVault), it will evolve from a simple trading infrastructure provider to a comprehensive financial services platform. However, it will also need to maintain service quality and technological leadership amidst rapid expansion.

From the perspective of the industry as a whole, the boundaries between the two models may gradually blur - infrastructure providers may launch their own applications, and application platforms may also open up their technical capabilities, ultimately forming a more diversified and interconnected DeFi ecosystem.