Context and Drivers
The decentralized perpetual futures market is experiencing a significant shift in leadership. Hyperliquid, which once dominated this space with a 71% market share as recently as May 2025, has seen its portion decline to approximately 38%. This change highlights a dynamic and competitive landscape where new platforms are successfully challenging the established leader.
Hyperliquid’s initial advantage was built on its proprietary Layer 1 blockchain, HyperEVM. This custom-built infrastructure was designed to deliver the high throughput and low latency necessary to rival the experience of centralized exchanges, giving it a strong technological edge.
However, this edge has been blunted by the rise of focused competitors. Aster, backed by Binance Labs, has attracted traders by offering leverage of up to 1001x and emphasizing features like MEV (Maximal Extractable Value) resistance to protect users from predatory trading practices. Meanwhile, Lighter, supported by venture firm a16z, has adopted a aggressive zero-fee model and utilizes zero-knowledge (ZK) circuits for its matching and liquidation engines, appealing particularly to cost-sensitive and high-frequency users. This intensified competition was recently exemplified by a direct rivalry: Hyperliquid listed Aster’s token, and Aster responded by offering Hyperliquid’s token with extremely high leverage.
Implications and Quick Facts
This redistribution of market share has several immediate implications for institutional desks and traders.
Adoption is accelerating towards the new platforms, driven by their compelling value propositions. The combination of zero fees, MEV protection, and high leverage is persuading a growing segment of professional and cost-conscious traders to move their activity to Aster and Lighter.
For liquidity, Hyperliquid’s smaller share means its order books are becoming thinner relative to the broader market. This can lead to increased slippage, particularly for large orders or in less frequently traded pairs, potentially creating a feedback loop that further challenges its dominance.
The risk landscape is also evolving. The competitive push towards offering extremely high leverage, while attractive to some traders, inherently increases the probability of sharp, cascading liquidations during periods of high volatility, which can lead to internal price spikes on the platforms.
Finally, the business models are being tested. Lighter’s strategy of forgoing fee income to gain users raises questions about the long-term sustainability of maintaining deep liquidity without that revenue stream.
The Path Forward
The market is now watching Hyperliquid’s response. The platform may need to reconsider its technology roadmap and fee structure to regain momentum. Potential strategic moves could include introducing its own MEV mitigation fixes or adjusting fee models to be more competitive.
The decisions made by these platforms in the coming months will ultimately determine how liquidity and order flow are divided among them, setting the stage for the next chapter of competition in the decentralized perpetual futures market.
