Original title: perps market landscape: winners and losers
Original author: @tradinghoex
Original translation: SpecialistXBT, BlockBeats
Editor's Note: This article deconstructs the core advantages and business models of four representative Perp DEXs, providing a clear evaluation framework that focuses on liquidity depth, fee structure, capital efficiency, and unique mechanisms.
Trading perpetual contracts isn't a team sport that requires taking sides. However, just five minutes of browsing the crypto community can create the opposite illusion. An extremist mentality has consumed most traders, eroding the advantage they could have gained simply by maintaining their curiosity.
If you post that you've tried a new Perp DEX, the replies are often filled with extremism rather than curiosity. Ironically, those being attacked are usually just looking for better options to improve their trading, but in an extremist mindset, exploration is equated with betrayal.
The real winners and losers
In the perpetual contract market, there are no winners and losers as extremists imagine. Multiple platforms can coexist and profit because they serve different needs: sometimes for different traders, and sometimes for the same trader's needs at different times.
However, there are indeed winners and losers among traders, and the distinction lies in whether they pursue optimized trading results, rather than in which platform they use.
Market structure: Specialization, not cutthroat competition.
Understanding the perpetual contract market landscape requires abandoning the winner-takes-all mentality. These platforms are developing professionally, not engaging in cutthroat competition.
Hyperliquid
Hyperliquid is a decentralized exchange running on its own Layer-1 blockchain, HyperEVM, which is designed for high performance and scalability. It addresses the limitations of automated market makers and off-chain matching engines by employing a fully on-chain order book model.
Source: HyperFoundation
HyperBFT Consensus Mechanism: HyperLiquid uses a custom consensus algorithm called HyperBFT, inspired by HotStuff and its successors. This algorithm and network stack are optimized from scratch to support the unique requirements of L1, enabling the network to handle up to 200,000 orders per second with a latency of approximately 0.2 seconds.
Dual-chain architecture: HyperLiquid is divided into two main components: HyperCore and HyperEVM.
HyperCore: The native execution layer that manages the key functions of the trading platform. It operates as a highly efficient engine, capable of supporting deep order books and the necessary liquidity.
HyperEVM: An EVM-compatible layer that allows any developer to deploy smart contracts to build decentralized applications while natively benefiting from Hyperliquid's liquidity and performance.
The key to this architecture lies in the state unification between HyperCore and HyperEVM: there are no cross-chain bridges, no risk of inconsistency, and no latency. Applications built on HyperEVM can directly read and write deep liquidity on HyperCore in real time.
HyperEVM ecosystem
The HyperEVM ecosystem has attracted a large number of foundational protocols covering areas such as lending, derivatives, yield, and infrastructure.
Within this framework, core protocols such as HypurrFi, Felix, Harmonix, Kinetiq, HyperBeat, HyperLend, and Project X anchor cross-chain capital flows.
To understand HyperEVM, one must start with the capital entry point.
Protocols like HypurrFi and Felix provide debt infrastructure through lending markets, synthetic dollar instruments (USDXL, feUSD), and products that support cash flow.
Kinetiq converts locked HYPE into liquid yield-generating tokens (kHYPE), achieving DeFi composability while maintaining staking rewards. The platform also supports permissionless deployment of HIP-3 exchanges through crowdfunded validator staking.
Harmonix transforms idle capital into productive liquidity through automated delta-neutral strategies and validator staking management, providing stablecoins with an annualized yield of 8-15%.
Project X operates as an AMM DEX with cross-chain aggregation capabilities, providing zero-fee transactions across EVM chains (finality in 50 milliseconds) and a simplified liquidity delivery user experience.
Fees: Perpetual contract fee tiers are variable trading fees charged based on your 14-day trading volume. Your taker and pending order fees will decrease depending on your category and total trading volume.
Perpetual contracts and spot trading have separate rate tables. Trading volumes for both perpetual contracts and spot trading are combined to determine your rate tier, with spot trading volume being calculated at double the rate. That is, (14-day weighted trading volume) = (14-day perpetual contract trading volume) + 2 * (14-day spot trading volume).
For each user, all assets (including perpetual contracts, HIP-3 perpetual contracts, and spot trading) share a single rate tier.
HyperLiquid Vault: HyperLiquid Vault is a feature that allows users to collaborate and profit by following trading strategies in a team. There are two main types: Protocol Vault and User Vault.
Vaults like Hyperliquidity Provider (HLP) are operated by the platform itself. HLP performs operations such as market making and clearing, earning a share of the transaction fees. Anyone can deposit USDC into HLP and share in its profits and losses.
Another type is the user vault, managed by a vault leader. Anyone can become a vault leader by depositing at least 100 USDC and contributing 5% of the vault's total value as their own interest. The vault leader manages the funds within the vault for trading and receives 10% of the profits as a reward.
For example, if you deposit 100 USDC into a vault that already has 900 USDC, you own a 10% share. If it grows to 2,000 USDC, you can withdraw 190 USDC (that is, your 200 USDC share minus the leader's 10 USDC cut).
There are no DMM programs, special rebates/fees, or delay advantages. Anyone is welcome to participate in market making.
Team: Hyperliquid was created by Hyperliquid Labs. The platform was founded by two Harvard alumni, Jeff Yan and lliensinc, who lead the Hyperliquid team.
The other team members come from Caltech and MIT and have worked at Airtable, Citadel, Hudson River Trading, and Nuro.
Jeff Yan brought his expertise in high-frequency trading systems from Hudson River Trading, where he later founded the cryptocurrency market maker Chameleon Trading. lliensinc added his deep understanding of blockchain technology.
Finally, Hyperliquid Labs is self-funded and has not accepted any external capital, which allows the team to focus on building products they believe in, free from external pressure.
Token Economics: Hyperliquid's native token, HYPE, powers its ecosystem, with a total supply of 1 billion. The exchange issued HYPE through an airdrop to 94,000 users, distributing 310 million tokens (31% of the total supply).
HYPE's utility includes governance rights (allowing holders to vote on platform upgrades) and staking rewards(approximately 2.37% annualized).
Token economics is broken down as follows:
38.888% (388.88 million tokens) are reserved for future release and community rewards.
31% used for Genesis distribution
23.8% will be allocated to core contributors (attribution period until 2027-2028).
6% allocated to the Hyper Foundation budget
0.3% used for community funding
0.012% used for HIP-2 allocation
HIPs: HyperLiquid Improvement Proposals
The governance of the Hyperliquid ecosystem is driven by its native token (HYPE).
Token holders participate in platform decision-making by voting on on-chain proposals known as Hyperliquid Improvement Proposals (HIPs). Any eligible participant can submit a HIP, which is then voted on by HYPE holders—typically in proportion to their staking percentage. If a proposal receives sufficient support, the core team will implement it.
HIP-3: Perpetual Contracts Deployed by Builders
The HyperLiquid protocol enables permissionless builders to deploy perpetual contracts, a key milestone in achieving a fully decentralized perpetual contract listing process.
In fact, HIP-3 allows anyone who stakes 1 million HYPE tokens to create a new perpetual contract market on the Hyperliquid blockchain (not Hyperliquid's decentralized exchange).
If a perpetual contract market behaves maliciously or improperly, the HIP-3 system can punish the deployer by forfeiting their HYPE stake.
Tradexyz
Tradexyz is a decentralized, non-custodial perpetual contract platform built on the Hyperliquid HIP-3 infrastructure. It enables users to trade cryptocurrencies, stocks, indices, forex, and commodities 24/7 with leveraged perpetual contracts without depositing funds into a centralized entity.
XYZ is the first platform on Hyperliquid to deploy HIP-3, and XYZ perpetual contracts are traded here.
XYZ perpetual contracts are perpetual contracts that reference traditional (non-crypto) asset classes. Like all perpetual contracts, XYZ perpetual contracts are cash-settled and use funds to keep the price aligned with the underlying asset. The same trading mechanisms (including collateral management, leverage adjustment, and margin modes or order types) applicable to Hyperliquid perpetual contracts also apply to XYZ perpetual contracts.
The XYZ100 Index Perpetual Contract is the first perpetual contract on XYZ. It tracks the value of an adjusted market capitalization-weighted index that comprises 100 large non-financial companies listed on US exchanges. Like other Hyperliquid perpetual contracts, it uses oracle prices to calculate funding rates, and the markup price is used for margining, liquidation, triggering stop-loss and take-profit orders, and calculating unrealized profit and loss.
The differences between HIP-3 and HIP-1 and HIP-2:
HIP-1 and HIP-2 were early governance proposals focusing on spot trading, while HIP-3 addressed perpetual contracts. HIP-1 introduced token listing standards and a governance-based process for listing new spot tokens. Under HIP-1, the community could create new tokens on Hyperliquid and bid HYPE to list them on the spot market. HIP-2 subsequently added a protocol-native liquidity engine that automatically provided liquidity to the order book, ensuring new tokens had deep liquidity from day one.
Builder code
The builder code is a unique identifier that allows any developer to connect their frontend to Hyperliquid's backend. Therefore, every transaction executed through this identifier is routed through Hyperliquid's order book, and a percentage of the transaction fee is automatically paid to the developer. The builder fee is a maximum of 0.1% of the perpetual contract fee and 1% of the spot fee.
In effect, this means that any trading bot, mobile application, or wallet can choose to use Hyperliquid as its backend infrastructure to offer cryptocurrency trading to its users while also earning a portion of the generated fees.
Adoption and Key Indicators
The builder code was launched by the Hyperliquid team in October 2024, and adoption accelerated in the following months.
The chart below compares protocol revenue for implementing builder code, highlighting the top 20.
But HyperLiquid's true success lies not only in its product quality, nor even in being the largest airdrop in crypto history. Most importantly, it is rooted in a decisive advantage: building the platform with the deepest liquidity in the market.
For financial markets, liquidity is the only truth. However, while the rise of decentralized finance promises greater openness and accessibility, this openness has led to the emergence of numerous blockchains and applications that are ruthlessly competing to attract and retain the same liquidity.
The history of decentralized finance is an endlessly repeating cycle: protocols are born, attract liquidity through incentives or airdrops, and then users migrate as soon as a better opportunity arises. In this world, liquidity remains a zero-sum game.
Hyperliquid has built the infrastructure to retain this liquidity.
Hyperliquid has established its position through its deep liquidity, unique technical architecture, and market diversity. The platform offers deep order books for major trading pairs and dozens of perpetual markets. This liquidity is invaluable for traders managing diversified portfolios or large positions.
You can trade on different tokens without having to spread your funds across multiple venues.
Lighter
Lighter is a decentralized exchange built on a zero-knowledge rollup custom-designed for Ethereum.
Lighter uses custom ZK circuits to generate cryptographic proofs for all operations, including order matching and settlement, with final settlement occurring on the Ethereum blockchain. This approach enables the platform to process tens of thousands of orders per second with millisecond-level latency, while ensuring that every transaction is provably fair and verifiable on-chain.
Hyperliquid and Lighter achieve verifiable transaction execution through different architectures.
Lighter Core is a collection of coordinated components:
User-signed transactions: Orders, cancellations, and settlements are all signed by the user. This ensures no forged operations and deterministic execution (same input → same output).
These transactions enter the system through the API server (top of the diagram).
The sorter and soft finality: The core of the system is the sorter, which is responsible for sorting transactions according to the "first-in, first-out" (FIFO) principle. It provides users with instant "soft finality" through the API, offering a seamless experience similar to that of a CEX.
Witness Generator and Proofer: This is where the magic happens. Data from the sorter is fed into the witness generator, which transforms it into circuit-friendly input. Then, the Lighter prover, built from scratch specifically for transaction workloads, generates hundreds of thousands of execution proofs in parallel.
Multi-level aggregation: To minimize gas costs on Ethereum, Lighter uses a multi-level aggregation engine. This compresses thousands of individual proofs into a single batch proof for final verification on Ethereum.
escape hatch
This feature defines true ownership. In the worst-case scenario, such as if the sorter is attacked or attempts are made to censor your withdrawals, Lighter Core will trigger Escape Hatch Mode.
The protocol allows users to submit priority requests directly on Ethereum. If the sorter fails to process this request within a predetermined time, the smart contract will freeze the entire exchange. In this state, users can reconstruct their account state using previously published compressed data blocks on Ethereum and extract the full value of their assets directly on-chain, without relying on the Lighter team or off-chain coordination.
Custom Arithmetic Circuits
A major challenge facing current Layer 2 scaling solutions is attempting to simulate the "technical debt" incurred by the entire Ethereum Virtual Machine (EVM). This typically requires redundant opcodes, which are unnecessary for specific financial tasks.
Lighter solves this problem by designing custom arithmetic circuits from scratch.
These circuits are specifically designed for transaction logic: order matching, balance updates, and settlement.
Technical data shows that by eliminating EVM overhead, the Lighter prover runs significantly faster than its zkEVM competitors while consuming far fewer resources when processing the same number of transactions. This is a prerequisite for the low latency required for high-frequency trading (HFT).
Multilayer polymerization
Lighter's ability to offer zero transaction fees to individual users stems not from short-term subsidy strategies, but from the structural advantages of multi-level aggregation.
The verification process is like a data compression pipeline:
Batch processing: The proof generator generates execution proofs in parallel for thousands of small transactions.
Aggregation: The system collects hundreds of thousands of sub-proofs and compresses them into a batch proof.
Final verification: Smart contracts on Ethereum only need to verify this final single proof.
The economic consequence is that the marginal cost of verifying an additional transaction online approaches zero. This creates a sustainable competitive advantage in terms of operating costs.
Fees: Lighter currently does not charge take-order or pending-order fees for standard accounts. Everyone can trade for free in all markets. Premium accounts are subject to take-order and pending-order fees.
Lighter Vault: LLP
LLP is the native market-making vault on Lighter.
The platform features public liquidity pools where users can provide liquidity and earn rewards based on trading activity. LLP tokens represent shares in these pools and can be used within the Ethereum DeFi ecosystem, enabling composability with protocols like Aave for additional yield opportunities.
While its purpose is to ensure deep liquidity and tight spreads in the order book, it is far from the only market maker on the exchange. Other traders/HFT firms can also run market-making algorithms.
Team: Vladimir Novakovski is the founder and CEO of Lighter, with backgrounds including quantitative trading at Citadel, machine learning at Quora, and engineering leadership at Addepar. He previously co-founded Lunchclub and holds a degree from Harvard University.
Funding: Lighter raised $68 million in an undisclosed funding round completed on November 11, 2025, reportedly valuing the company at $1.5 billion.
This funding round was led by Ribbit Capital and Founders Fund, with participation from Haun Ventures and Robinhood, an online brokerage firm that rarely engages in venture capital.
In addition, Lighter has received extensive support from many leading venture capital firms and angel investors, including Andreessen Horowitz (a16z), Coatue, Lightspeed, CRV, SVA, 8VC, and Abstract Ventures.
Token Economics: According to official distribution data, Lighter's total supply is capped at 1,000,000,000 LIT (1 billion tokens). The distribution structure establishes a precise 50/50 balance among internal and external stakeholders.
26% allocated to the team
25% for airdrops
25% for the ecosystem
24% allocated to investors
Lighter has carved out its niche through its unwavering commitment to cost control. For high-volume traders, the platform's zero-fee structure can mean the difference between profitable and unprofitable strategies.
Based on a monthly trading volume of $10 million, this could save thousands of dollars per month, or tens of thousands of dollars per year, compared to platforms that charge a 0.03-0.05% taker fee. Lighter recognizes that for some traders, eliminating fees is more important than having access to a hundred different markets.
They optimized for these types of traders, and these traders have taken note of it.
Extended
Extended is a perpetual contract DEX built by the former Revolut team, with a unique product vision centered around a unified margin.
The goal is to create a complete trading experience—combining perpetual contracts, spot trading, and integrated lending markets under a single margin system.
The Extended Network, centered around a globally unified margin, will allow all applications within the network to access users' available margin and share unified liquidity, thereby enhancing overall liquidity depth. From the user's perspective, all activity will be credited to a single global margin account shared across applications, enabling them to manage one account instead of multiple application-specific accounts and maximize capital efficiency by using the same margin across multiple dApps.
Extended operates as a hybrid central limit order book (CLOB) exchange. While order processing, matching, position risk assessment, and trade ordering are handled off-chain, trade verification and settlement are conducted on-chain via Starknet.
Extended's hybrid model leverages the strengths of both centralized and decentralized components:
On-chain settlement with verification and oracle pricing: Extended settles each transaction on the blockchain, and on-chain verification of transaction logic ensures the prevention of fraudulent or erroneous transactions. Furthermore, marked prices from multiple independent oracle providers reduce the risk of price manipulation.
Off-chain trading infrastructure: An off-chain order matching and risk engine, combined with a unique settlement architecture, delivers superior performance in terms of throughput, end-to-end latency, and transaction settlement. This performance is comparable to centralized exchanges and outperforms other hybrid or decentralized exchanges.
Extended is designed to operate in a completely trustless manner, thanks to two core principles:
Users retain self-custody over their funds, with all assets held in Starknet's smart contracts. This means that Extended cannot hold user assets in custody under any circumstances.
On-chain verification of transaction logic ensures that fraudulent or incorrect transactions (including liquidations that violate on-chain rules) are never allowed.
All transactions occurring on Extended are settled on Starknet. While Starknet does not rely on Ethereum Layer 1 to process every transaction, it inherits Ethereum's security by issuing zero-knowledge proofs every few hours. These proofs verify state transitions on Starknet, ensuring the integrity and correctness of the entire system.
team
Extended was created by a former Revolut team and includes:
@rf_extended, CEO: Former head of crypto business at Revolut, former McKinsey.
@dk_extended, CTO: Architect of 4 cryptocurrency exchanges, including the recently launched Revolut Crypto Exchange.
@spooky_x10, CBO: Former Chief Engineer at Revolut Crypto, and one of the major contributors to the Corda blockchain.
Their journey as a team began at Revolut, where they saw millions of retail users enter the crypto space during the last bull market, but also noticed the lack of high-quality products outside of top exchanges and the overall unsatisfactory DeFi experience.
cost
Extended employs a simplified fee structure for its perpetual market:
Order taking fee: 0.025% of the nominal value of the completed transaction.
Suspended order fee: 0.000% (i.e., there is no fee for suspended orders).
From the user's perspective, this means that the cost of executing a market order is very low, while a limit order executed as the order placer may not incur any direct fees.
Builder code
Extended supports builder code, which allows developers who build alternative front-ends for Extended to earn a builder fee for each transaction they route for users. This fee goes 100% to the builder and is defined per order.
The builder code is currently being developed in collaboration with the following teams:
Wallet transaction integration
In addition to expanding its product offerings, Extended has natively integrated with wallets, enabling users to conduct perpetual transactions directly within the wallet interface, similar to how token exchanges are accessed today. This integration opens the door to perpetual contracts for a wider range of retail users.
Extended vault
This vault uses an automated market-making strategy to actively quote prices for all markets listed on Extended. Its quoting behavior is constrained by global and specific market risk exposure controls, as well as dynamic capital allocation and spread management logic.
Risk exposure management
Global risk exposure cap: If the vault's leverage exceeds 0.2x, it will only quote prices in the market for existing risk exposures and will only quote prices in the direction of reducing those exposures. This acts as a circuit breaker to prevent excessive leverage.
Per-market exposure limits: Each market has a hard cap on permissible vault exposure. Less liquid assets have stricter limits to minimize the risk of insufficient liquidity.
Quotation behavior
Adaptive spread pricing: Spreads are dynamically set—tightening under stable conditions and widening during periods of volatility—to mitigate adverse selection. Bids must remain within predetermined width constraints to qualify for rewards.
Risk exposure perception adjustment: The vault adjusts its size and spread asymmetrically according to the direction, reducing the size of the quote and widening the spread in the direction that will increase the vault's risk exposure.
In addition, the vault accumulates rebates from order placements during its market-making activities.
Extended distinguishes itself through its Vault System, which allows traders to earn yield while trading perpetual contracts. Through Extended Vault Shares (XVS), depositors can earn a base yield of approximately 15% annualized on their collateral, with additional yields based on trading activity.
The amount of extra earnings a specific user receives depends on their trading affiliate level. The higher the affiliate level, the higher the annualized interest rate on the extra earnings. Extended affiliate levels are based on percentile rankings and depend on the user's total trading points:
The trading alliance rankings are updated weekly and synchronized with the points distribution, based on the user's total trading points.
Passive depositors do not have a trading alliance level and have zero additional profit factor.
Active traders were divided into: Pawn (bottom 40%), Knight (next 30%), Rook (15%), Queen (10%), and King (top 5%).
The platform allows XVS to be used as margin, contributing up to 90% of the equity value, meaning traders can earn passive income from their capital while executing leveraged trades.
For traders holding large amounts of capital on perpetual contract platforms, this dual use of collateral—serving as both trading margin and a yield-generating deposit—creates capital efficiencies that traditional platforms cannot offer.
Variational
Variational is a peer-to-peer trading protocol that operates on a fundamentally different model. Unlike order book-based DEXs, Variational uses a Request for Quote (RFQ) model. The protocol offers zero trading fees across more than 500 markets while implementing a revenue redistribution system through loss refunds and trade rebates.
OMNI: Perpetual Contract Trading
The first application to launch on the Variational Protocol is Omni, a perpetual trading platform for retail investors. Omni allows users to trade hundreds of markets with tight spreads and zero fees, while also offering loss refunds and other rewards.
The protocol uses an internal market maker called Omni Liquidity Provider (OLP), which aggregates liquidity from CEXs, DEXs, DeFi protocols, and OTC markets. OLP is the first to simultaneously run complex market-making strategies and act as the sole counterparty for user trades. When a user requests a quote, OLP obtains a competitive price from the entire liquidity environment. OLP typically captures 4-6 basis points of spread revenue while charging traders zero fees.
Furthermore, since the RFQ model only requires the OLP to provide liquidity when opening a trade, the OLP is able to provide competitive quotes for hundreds of trading pairs simultaneously.
Variational redistributes a significant portion of its revenue to users through two mechanisms:
Loss Refund: Whenever a trader closes a losing position, they have the opportunity to receive an instant refund of the entire loss, with a probability ranging from 0% to 5%, depending on their reward tier (from no tier to Master). The protocol has distributed over $2 million in refunds across more than 70,000 trades, with the highest single refund exceeding $100,000. This funding comes from 10% of OLP's spread revenue.
Trading Rebates: Active traders receive rebates based on their trading volume and enjoy spread discounts. The higher the trading volume, the more value is returned to the trader.
With over 500 markets to choose from, Variational boasts the broadest coverage in the perpetual contract DEX space. Through an automated listing engine leveraging liquidity aggregated from CEXs, DEXs, DeFi protocols, and OTC sources via OLP, new assets can be listed within hours. Customizable in-house oracles enable Variational to rapidly support new assets and, in the future, list on alternative and novel markets.
On Omni, on-chain transacting parties pay gas fees for user deposits and withdrawals, as well as for transferring funds from the OLP to a new settlement pool when necessary. This eliminates the hassle of managing gas fees for different transaction operations.
Variational's model meets the unique needs of traders who want downside protection, access to alternative markets, and rebate rewards based on events.
PRO: Institutional OTC Derivatives Trading
While Omni addresses the perpetual market, Pro is designed for institutional traders who need to go beyond standard perpetual contracts. Pro extends the RFQ model, allowing multiple market makers to compete for a single quote request in real time, providing greater transparency and better pricing than the current "negotiate in a Telegram group" model.
Pro aims to make OTC derivatives trading transparent and automated, transforming a slow, opaque, and high-risk market into efficient and fair on-chain infrastructure.
team
Variational was founded by Lucas Schuermann and Edward Yu. Lucas and Edward met as engineering students and researchers at Columbia University and later founded their own hedge fund (Qu Capital) in 2017. In 2019, Qu Capital was acquired by Digital Currency Group, and Lucas and Edward became Vice President of Engineering and Vice President of Quantitative Trading, respectively, at Genesis Trading.
In 2021, after handling hundreds of billions of dollars in trading volume at Genesis (then one of the largest trading desks in the crypto space), Lucas and Edward left to found their own proprietary trading firm: Variational. After raising $10 million to run their trading strategies profitablely for several years and integrating with almost all CEXs and DEXs in the industry, Lucas and Edward decided to use Variational's trading profits to develop the Variational protocol.
Lucas and Edward's goal for the Variational protocol is to return market-making profits to traders through Omni and to address the pain points they have witnessed firsthand by bringing institutional OTC trading onto the blockchain through Pro.
Variational's development and quantitative team comprises industry veterans active in the crypto algorithmic trading space since 2017, with prior experience at companies such as Google, Meta, Goldman Sachs, and GSR. All members of the core technical team possess over a decade of experience in software engineering and/or quantitative research.
Funding: Variational raised $11.8 million in a funding round completed on June 4, 2025.
Variational has received support from industry leaders, including Bain Capital Crypto, Peak XV (formerly Sequoia India/Southeast Asia), Coinbase Ventures, Dragonfly, Hack VC, North Island Ventures, Caladan, Mirana Ventures, Zoku Ventures, and others.
cost
There are no transaction fees on Omni.
Omni charges a flat fee of $0.10 per deposit/withdrawal to prevent junk transactions and cover gas costs.
OLP
Omni Liquidity Provider (OLP) is a vertically integrated market maker that acts as the counterparty to all trades on Omni.
OLP can be broken down into three key components: vault, market-making engine, and risk management system.
Vault: The vault is a smart contract where the capital (USDC) powering OLP is securely stored. The vault is the source of OLP margin and the place where OLP's market-making profits accumulate.
Market Making Engine: OLP runs sophisticated market-making strategies, responsible for generating competitive quotes and acting as the counterparty for every trade executed on Omni. OLP runs proprietary internal algorithms that analyze real-time data (such as fund flows and volatility) from CEXs and on-chain sources to determine fair prices. The primary goal of the market-making engine is to maintain the tightest possible spreads across all markets.
OLP is based on the same market-making engine that the founders of Variational have used and improved for over 7 years.
OLP as the sole counterparty
For every transaction on Omni, both the OLP and the user must adhere to margin requirements. This means that both parties need to maintain margin in the settlement pool, and if their margin level falls below the requirement, they may be liquidated.
A key difference between Omni's design and other platforms is that OLP is the counterparty to all trades on Omni. This brings several benefits to traders:
Zero fees: Since all market making on Omni is done by OLP, rather than external market makers, Omni does not need to generate revenue through fees.
Loss refund: A portion of the spread income is immediately returned to the trader, including through Omni's loss refund mechanism.
Listing diversity: For new listings, OLP only requires a reliable price source, a pricing strategy, and a hedging mechanism—all of which can be built and maintained internally. This is reflected in the approximately 500 tradable markets on Omni, with the potential addition of RWA and other alternative markets in the future.
OLP makes money through the following process:
OLP continuously determines a fair spread for each asset.
Users open positions with OLP at the quoted price.
OLP hedges its directional risk exposure accumulated from traders through external venues as needed.
Variational protocols earn money by taking a percentage of Omni's spread revenue. For a high-level example, a Variational protocol might earn 10% of all paid spreads on Omni.
OLP funding sources
Initially, the Variational team provided the initial capital for OLP. Once the system has proven stable on the mainnet over time and has a good track record of generating market-neutral returns, the team plans to open it to user deposits through a community treasury.
Variational Oracle
Variational oracles provide price and market information for all assets supported by the Variational protocol.
This oracle works by streaming multiple different real-time data sources to each listed market, using a weighted combination of prices from different exchanges. Having a customizable in-house oracle allows Variational to quickly support new assets and (in the future) list alternative and novel markets.
Omni's permissionless perpetual contract listing feature is enabled by its custom oracle, which can autonomously assess price reliability, decentralization, and market activity before activating a new market.
Trading via RFQ
Variational is a Request for Quote (RFQ) protocol that does not use an order book.
Source: https://hummingbot.org/blog/exchange-types-explained-clob-rfq-amm/#request-for-quotation-rfq-exchanges
At a high level, an RFQ system consists of a requester seeking a quote and a quoter responding with a buy and/or sell price. The general RFQ process (at the protocol level) is as follows:
Offer seekers create RFQs by selecting the structure they want to trade. For example, an ETH contract with a settlement date of January 1, 2026. Offer seekers can broadcast the RFQ globally (to all offerers) or to specific whitelisted offerers.
Eligible bidders can respond with a quote. Each quote includes the following terms:
The price at which the transaction is executed. The quoting party can quote a two-sided price (with both a bid and ask price) or a one-sided price (either a bid or ask price).
The settlement pool to which the transaction will be settled. This can be an existing pool between the two parties (if one exists), or a new pool created at the same time as the transaction. Regardless of whether the transaction uses an existing pool or a new pool, margin requirements, liquidation penalties, and other pool parameters will be proposed here before the quote is accepted.
If the terms are acceptable, the offeror can choose to accept an offer. At this stage, the offeror needs to approve a smart contract call to move the collateral into the pool. However, the funds do not actually move until the offeror's final confirmation.
The offeror has a final confirmation phase, which is the final confirmation of the transaction and all terms. If the offeror gives the final "OK" by approving the smart contract call, the pending transaction will enter the liquidation process. If a new settlement pool needs to be created, it will be done at this stage. At this point, the collateral of both parties is moved into the pool, the transaction is credited, and the new position will be reflected in the pool's ledger.
In summary, Variational represents a fundamentally different approach to derivatives trading. By combining an RFQ-based execution model with vertically integrated liquidity providers, Variational acts as a well-constructed perpetual contract DEX aggregator, abstracting fragmented liquidity across CEXs, DEXs, DeFi protocols, and OTC markets into a single, zero-fee trading interface.
The result is a system that offers institutional-grade pricing, broad market coverage, and capital efficiency, while directly returning a portion of market-making profits to traders through loss refunds and rebates. Traditional perpetual contract DEXs rely on external market makers and fee collection, while Variational internalizes liquidity supply, adjusts incentives, and removes unnecessary intermediaries. This design makes Variational more than just another perpetual contract venue; it acts as an execution layer connecting retail and institutional trading within a unified on-chain framework.
Brief Argument
The long-term trajectory of DEXs is not a winner-takes-all battle, but rather a cycle of gradual improvement driven by self-custody needs and capital efficiency. As traders increasingly value retaining control over their assets, DEXs will continue to gain appeal.
However, once the meta-trend of a perpetual contract DEX takes off, it's inevitable that dozens of teams will rush to launch cheap imitations and points-driven clones. These products are less optimized for traders and more designed to extract fees from those cultivating the "next big DEX" before the window of opportunity closes. This is the same late-cycle behavior we've seen in every successful meta-trend—essentially a saturation phase where it's best to simply protect your capital.
What we are seeing now bears a striking resemblance to the broader crypto cycle:
Paradigm shift and tremendous success: A high-quality pioneer reshapes expectations; Hyperliquid pioneers deep on-chain liquidity, a unique technical architecture, and sets a new benchmark.
New entrants with a real value proposition: Protocols like Lighter and Variational highlight a specific structural advantage (Lighter's zero fees, and Variational's zero fees, RFQ-based aggregator model, and transaction rebates).
Saturation and low-quality late entrants: As the narrative becomes crowded, late entrants and derivative imitations emerge, many of which offer little real differentiation beyond speculative gains. This reflects the saturation phase we've seen in NFTs, interest-bearing stablecoins, the ICO boom, and even early perpetual markets like GMX and its numerous forks.
This pattern is a structural feature of the crypto narrative. Early adopters gain an unfair advantage because they establish new paradigms that many traders haven't yet priced in. Early entrants can still profit if they can meaningfully differentiate themselves. Late entrants face two simple realities:
Most of them will never have real liquidity and will not offer serious traders any meaningful better options.
For users, once a meta-trend has become crowded, it is generally wiser to protect capital than to spread funds across redundant farming activities.
Differentiation is a key factor in paradigm shifts.
Hyperliquid is a paradigm shift because it combines depth, unified liquidity, a fully on-chain order book, and CEX-level performance on its self-built L1.
Lighter differentiates itself by making a very clear and decisive bet: zero transaction fees.
Variational, on the other hand, took a completely different approach, adopting an RFQ-based aggregator model that abstracts fragmented liquidity across venues and returns a portion of the market-making profits to traders.
Trends may change, and in some cases, competitors may still exist; what ultimately distinguishes them is the specific value they bring.
If you're working on a Perp DEX that looks similar to these platforms: the same order book, a promised value proposition without pre-token value, and the same points system, then you're probably too late.
