Onchain Perpetual Futures: Closing The Gap Between CeFi And DeFi For Institutional Traders

by
Alisa Davidson

Printed: February 16, 2026 at 9:30 am Up to date: February 16, 2026 at 5:55 am

by Ana

Edited and fact-checked:
February 16, 2026 at 9:30 am

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Blockchain may be decentralized, however the belongings issued on these networks had been first traded on centralized exchanges. Again when Bitcoin was the one coin on the town, easy order ebook exchanges sprung as much as meet the demand from new customers keen to amass the cryptocurrency.

These spot exchanges enabled value discovery and, though initially illiquid, progressively improved over time as extra skilled platforms arrived. Then, round 5 years into crypto’s existence, the primary futures exchanges appeared. These too had been centralized. And thus, for the primary decade of its existence, crypto existed in a curious state whereby its belongings had been decentralized however buying and selling them was centralized and thus entailed custodial danger.

However in 2020, decentralized alternate Uniswap went viral, ushering in what got here to be generally known as the wonderful DeFi Summer time, through which DEX buying and selling grew to become popularized. Onchain buying and selling is now enormous, recording billions of {dollars} in each day quantity throughout a whole bunch of spot and perps exchanges. However regardless of this progress, CEXs nonetheless dominate.

For all the benefits DEXs provide – self-custody; on the spot entry to new tokens; liquidity incentives – CEX infrastructure has retained a bonus. For skilled buying and selling particularly, the place velocity and dependable execution are crucial – which is especially true of perps – centralized platforms prevail.

However the hole between CEXs and DEXs has lastly begun to shrink. And on the middle of this shift is the maturation of onchain perps and the Layer 3 execution frameworks designed to energy them.

Feeding Demand for Onchain Derivatives

Derivatives persistently account for round 80% of crypto buying and selling quantity. And if there’s one instrument specifically merchants flock to for leverage and hedging, it’s the perpetual futures contract or perp. Retail loves them. Execs love them. And institutional merchants depend on them for all the things from directional publicity to portfolio danger administration.

Establishments overwhelmingly use CEXs to facilitate this exercise, as a result of empirically, DEXs have lacked the execution depth required for large-scale buying and selling. Add to that the complexity of managing liquidations and danger parameters in a decentralized setting, and it’s straightforward to see why DEXs have at all times performed second fiddle in terms of perps.

The issue has by no means been about demand, then, however about structure. The primary decentralized perps exchanges tried to copy centralized order books instantly on L1 or 2 networks. However perpetual markets aren’t easy swap contracts. They require steady value feeds, refined liquidation engines, margin monitoring, dynamic funding price calculations and rather more.

Operating this logic instantly on base layers is dear and computationally heavy. In consequence, the primary wave of perps DEXs cornered the onchain futures market however did not entice institutional gamers away from their centralized exchanges. However the subsequent wave of perps DEXs is designed otherwise, thanks in no small half to the emergence of L3s that may deal with the complicated execution, permitting perps protocols to supply true CEX-grade buying and selling.

Intent-Based mostly Execution Arrives Onchain

The answer to creating perps DEXs carry out like their CEX counterpartslies in intent-based execution carried out on Layer 3. On this mannequin, the person successfully states the specified end result e.g. “I need to open a $50,000 ETH lengthy at this value.” This “intent” is then picked up by a community of specialised solvers – mainly off-chain brokers – that compete to search out probably the most environment friendly path to  fulfill it.

It may very well be routed by way of onchain swimming pools, different DEXs, and even faucet into centralized liquidity. However the finish person sees none of this: from their perspective, their buying and selling intent is flawlessly fulfilled and with out requiring them to custody or manually bridge their funds. To visualise this course of in motion, think about Orbs’ Perpetual Hub Extremely (PHU), which was just lately built-in with Gryps, a high-performance DEX on Sei Community.

Orbs is the Layer 3 which acts because the decentralized execution layer, whereas Perpetual Hub Extremely is the product that decentralized exchanges combine with a view to provide institutional-quality perps buying and selling. Gryps was designed as a perps platform from day one, however having added Perpetual Hub Extremely, these capabilities have been considerably enhanced.

PHU permits Gryps to tug liquidity from a mix of onchain sources and main centralized exchanges, guaranteeing larger depth and tight spreads even for big orders. Orbs’ L3 logic, in the meantime, handles high-frequency duties equivalent to automated liquidations and real-time funding price changes.

Lastly, Perpetual Hub Extremely makes use of a modular Request-for-Quote (RFQ) system powered by Symm.io good contracts. This ensures that Gryps merchants get the precise value they’re quoted – simply as they might if buying and selling on a centralized perps alternate.

Making It Modular

On the floor, the innovation being engendered by L3’s entry into the sport is healthier person expertise. Now you can commerce on a decentralized alternate that feels each bit as responsive and liquid as a centralized equal. However the true advantage of routing logic and liquidity by way of Layer 3 is felt by the decentralized exchanges themselves, which now have a modular toolkit at their disposal.

“Modularity” is a kind of phrases that’s thrown round so much in DeFi, and within the case of perps buying and selling it may be accompanied by a transparent instance of how this truly manifests. As an alternative of forcing every alternate to construct its personal matching engine and liquidation logic from scratch, modular L3 infrastructure allows plug-and-play derivatives frameworks.

If we think about Orbs’ Perpetual Hub Extremely, for instance, slightly than working as a standalone alternate, PHU features as an execution layer that integrates with any DEX. Gryps has been in a position to ship superior perps buying and selling performance with out custom-building a derivatives engine from the bottom up.

This enchancment in modular infrastructure is democratizing institutional-grade buying and selling. Outsourcing the heavy lifting to a specialised layer signifies that DeFi protocols are not constrained by community or developer capabilities. All of the instruments they should create an institutional-grade perps buying and selling platform are totally integratable with just some traces of code.

Because of this innovation, buying and selling onchain perps not appears like settling for second finest. The main perps DEXs at the moment are each bit pretty much as good as something CeFi can muster.

Alisa, a devoted journalist on the MPost, makes a speciality of cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a eager eye for rising developments and applied sciences, she delivers complete protection to tell and have interaction readers within the ever-evolving panorama of digital finance.

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