Decentralized exchanges are undergoing an unprecedented evolution, and it can even be said that the models they are building have transcended the traditional notion of "trading platforms," gradually moving towards a form akin to "digital empires." Observing the movements of leading exchanges over the past few years reveals this trend: Binance launched BNB Chain and established BNB as the "currency" within its ecosystem, creating a near-financial system loop through token burns and fee mechanisms; Coinbase is promoting the Base network, attempting to create an on-chain financial sovereignty for global users; OKX is also actively developing Layer 2 infrastructure, transforming from a matcher to an on-chain ecosystem builder. Even before the collapse of FTX, its team was similarly trying to build an "empire" through token issuance, cross-chain systems, and proprietary markets. These actions indicate that the identity of exchanges has expanded from a mere matching intermediary to an existence akin to a "nation": they possess their own currency and fiscal policies, establish regulatory-like institutional arrangements, undertake public service functions, and also need to expand their influence through diplomacy (cross-chain cooperation, ecosystem investment).
In this landscape, a simple "trading tool" can no longer meet developmental needs. Only protocols capable of taking on the role of "financial infrastructure" are likely to become the core of future digital empires. The financial infrastructure referred to here is not just a simple matching engine, but a system that can perform "central bank"-like functions on-chain: it needs to have risk management capabilities, liquidity allocation capabilities, and macro-control capabilities to stabilize the operation of the entire ecosystem. This is precisely why innovations in perpetual contracts and synthetic assets are highly anticipated.
Dilemmas and Breakthroughs in the Traditional Perpetual Contract Market
The traditional perpetual contract market faces two core dilemmas: first, the limited variety of assets makes it difficult to cover users' diverse needs; second, the low capital utilization efficiency leads to insufficient participation willingness from liquidity providers. The gradually emerging "synthetic asset" path is attempting to solve these two problems. Through synthetic asset technology, a single liquidity pool can support perpetual trading of multiple assets, allowing liquidity providers to only provide stablecoins to serve dozens or even hundreds of assets' long and short trades. Traders can then execute operations such as Bitcoin longs, Japanese yen shorts, and gold buys all on the same interface. This shift is not only a technical efficiency optimization but also a transformation of trading philosophy: moving from the previous "asset dispersion, market segmentation" to "liquidity integration, asset coverage maximization."
In the Base ecosystem, Avantis can be seen as a representative attempt in this direction. The protocol achieves simultaneous support for assets like Bitcoin, gold, and Japanese yen through a USDC pool and gradually extends its reach to emerging targets like on-chain crypto stocks. This means that the idea of "one DEX supporting all assets" is being rapidly advanced. Rather than being a minor adjustment to the existing model, it is a fundamental reconstruction of the decentralized perpetual market: previously, different assets required independent markets and dispersed liquidity; now, they are aggregated within the same mechanism through synthetic means, greatly enhancing capital efficiency and product diversity.
Crypto Stocks Propel the Perpetual DEX Revolution: The Overlooked Super Opportunity: Crypto Stocks
It is worth noting that the segment of crypto stocks may be an overlooked super opportunity. By market capitalization, MicroStrategy has surpassed $110 billion, Coinbase around $80 billion, and Robinhood over $100 billion, with the total market capitalization of the "crypto stock club" reaching approximately $370 billion, equivalent to one-third of the current total market capitalization of altcoins.
（Image Resource: Youfenxi)
Compared to most tokens, these companies possess a stronger capital market foundation, broader distribution channels, and a higher degree of institutional trust, thus their growth rates often exceed those of traditional crypto assets. However, currently, these crypto stocks only exist on-chain in spot form, lacking the support of a 24/7 perpetual derivatives market. Considering that 74% of the overall cryptocurrency trading volume comes from the derivatives market, the absence of on-chain leverage and perpetual contracts for crypto stocks is undoubtedly a significant gap. According to some market estimates, the on-chain perpetual trading potential of this segment could reach $45 billion to $90 billion per month. This overlooked super opportunity has already been recognized by several practitioners who are preparing to seize this market. One of them is Avantis, which aims to unify the perpetual trading interface for crypto stocks, foreign exchange, commodities, and cryptocurrencies through a synthetic asset system, becoming a potential carrier for all asset categories.
The logic behind this model is essentially "Liquidity as a Service" (LaaS). Previously, each protocol needed to attract liquidity individually, leading to dispersed and inefficient capital. However, synthetic asset protocols can achieve liquidity reuse among multiple assets through centralized liquidity pools. This not only improves capital utilization but also creates a self-reinforcing positive cycle: the more concentrated the liquidity, the higher the efficiency; the higher the efficiency, the more products supported; the more products, the more users attracted; and the more users, the more concentrated the liquidity. Ultimately, the protocol evolves from a single trading venue to the underlying "leverage engine" of the entire ecosystem.
Another noteworthy direction is that it not only exists as a trading platform but also serves as "infrastructure" called upon by other protocols. For example, developers have embedded Avantis' perpetual contract functionality into the AI trading agent Bankrbot, enabling the AI to directly formulate and execute cross-asset trading strategies. This model showcases the compositional advantages of DeFi: on the front end, it can be RWA projects or social applications; on the back end, it is the leverage engine provided by synthetic asset protocols like Avantis. As this modular integration becomes commonplace, complex strategies, structured products, and even cross-market arbitrage on-chain can be rapidly realized.
As a cradle for various DEXs, the Base ecosystem has already birthed many valuable and meaningful perpetual DEX products. From an ecological perspective, the synergistic effects generated by the deep cooperation between Base and Coinbase are driving the rapid growth of the derivatives sector within the Base ecosystem. In some respects, to fully complete the next generation of the perpetual DEX revolution, Base must be a pioneer.
BSX, currently a stable CLOB DEX operating on Base, has completed integration with Coinbase and received funding from institutions like the Base Ecosystem Fund, led by former Coinbase developers, with a clear overall development path.
Avantis, another gem in the Base ecosystem, has a more solid positioning within the ecosystem. It received early support from Coinbase Ventures and the Base ecosystem fund and is now one of the more active derivatives protocols on the Base chain. According to public data, Avantis' fee income and sequencer contributions on Base have entered the top ten, indicating a certain level of user activity and trading depth.
In terms of products, Avantis focuses on on-chain perpetual contracts and synthetic assets, gradually exploring zero-fee models and richer derivatives designs. This makes its role in the ecosystem not just a single trading platform but also one with certain extensibility and composability. Some in the industry have referred to it as "Drift Plus on Base," as it continues to meet the demand for perpetual trading while making differentiated attempts in product mechanisms.
Overall, both BSX and Avantis are driving the development of the derivatives market within the Base ecosystem, but from the perspective of data performance and product layout, Avantis has already demonstrated a stronger first-mover advantage and growth certainty.
In summary, as regulations gradually clarify, RWA accelerates on-chain, and synthetic asset technology matures, the perpetual contract market is undergoing an important paradigm shift. It is no longer just a speculative tool but is evolving into an on-chain implementation platform for global macro strategies. When investors can complete full asset allocation from Bitcoin to gold to crypto stocks within the same protocol, on-chain trading has the potential to directly challenge traditional finance. As a representative protocol, Avantis is reconstructing the leverage trading logic with the approach of "one pool, covering all assets," while also providing composable leverage engines for other protocols. This is not just a story of the development of a decentralized exchange, but a process of redefining on-chain financial infrastructure.
Conclusion: Paradigm Shift in Perpetual Trading
Overall, on-chain perpetual contracts are in a phase of rapid development, with technological advancements and market demands mutually catalyzing the rapid growth of this field. With the optimization of clearing mechanisms, the stability of oracle prices, and the improvement of liquidity incentives, the protocol's performance in terms of capital efficiency and user experience is continuously enhancing.
At the same time, the expansion of synthetic assets and cross-market trading further enriches the application scenarios of on-chain derivatives, making them not only able to meet the needs of crypto asset traders but also gradually becoming an important bridge connecting traditional finance and crypto finance. Coupled with open compositional designs and more efficient risk control tools, the overall resilience and scalability of the on-chain derivatives ecosystem are significantly improving.
It is foreseeable that in the future, driven by both compliance exploration and product innovation, on-chain perpetual contracts will develop towards a more transparent, flexible, and global direction, and are expected to become a key engine for the next stage of DeFi growth.
