Evolution of Exchanges: From Intermediaries to Digital Empires
Decentralized exchanges are undergoing an unprecedented evolution, even to the point that the models they construct have surpassed the traditional notion of a 'trading platform,' gradually moving towards a form resembling a 'digital empire.' Observing the trends of leading exchanges over the past few years reveals this trend: Binance launched BNB Chain and used BNB as the 'currency' within its ecosystem, establishing a near-fiscal system 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 also trying to build an 'empire map' through token issuance, cross-chain systems, and proprietary markets. These actions indicate that the identity of exchanges has expanded from a simple matching intermediary to an entity akin to a 'country': they have their own currency and fiscal policies, establish institutional arrangements similar to financial regulation, undertake public service functions, and also need to expand influence through diplomacy (cross-chain cooperation, ecosystem investment).
In this landscape, a simple 'trading tool' can no longer meet development needs. 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 play a 'central bank' role on-chain: it needs to have risk management capabilities, liquidity allocation abilities, and macro-control capabilities to support the operation of the entire ecosystem. This is precisely why innovation in perpetual contracts and synthetic assets is 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 meet users' diverse needs; second, the low capital utilization efficiency leads to insufficient participation from liquidity providers. The gradually rising path of 'synthetic assets' 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 simply provide stablecoins to serve dozens or even hundreds of assets for long and short trading. Traders can perform operations such as Bitcoin longs, yen shorts, and gold buys on the same interface. This transformation is not only a technical efficiency optimization but also a change in trading philosophy: from the past 'asset dispersion, market segmentation' to 'liquidity integration, maximizing asset coverage.'
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 yen through a USDC pool and is gradually extending its reach to emerging assets like on-chain crypto stocks. This means that the idea of 'one DEX supporting all assets' is being rapidly advanced. Rather than just being a minor adjustment to the existing model, this represents a fundamental reconstruction of the decentralized perpetual market: previously, different assets required independent markets and fragmented liquidity; now, they are aggregated within the same mechanism through synthetic methods, greatly enhancing capital efficiency and product diversity.
Crypto stocks boost the perpetual DEX revolution, an overlooked super opportunity: crypto stocks
It is worth noting that the sector of crypto stocks may be an overlooked super opportunity. By market capitalization, MicroStrategy has exceeded $110 billion, Coinbase about $80 billion, and Robinhood over $100 billion, with the total market capitalization of the entire 'crypto stock club' reaching around $370 billion, equivalent to one-third of the total market capitalization of current altcoins.
(Image Resource: Youfenxi)
Compared to most tokens, these companies have stronger capital market foundations, broader distribution channels, and higher levels of institutional trust, thus their growth rates often exceed those of traditional crypto assets. However, currently, these crypto stocks exist on-chain only in spot form, lacking the support of a 7×24 hour perpetual derivatives market. Considering that 74% of the overall cryptocurrency trading volume comes from the derivatives market, the lack 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 for this sector could reach between $45 billion and $90 billion per month. This overlooked super opportunity has already been discovered by many practitioners who are beginning to prepare to seize this lucrative market. One such entity is Avantis, which aims to create a unified perpetual trading interface for crypto stocks, forex, commodities, and cryptocurrencies through its synthetic asset system, becoming a potential carrier for all asset categories.
Behind this model is the logic of 'Liquidity as a Service' (LaaS). Previously, each protocol needed to attract liquidity individually, leading to fragmented funds and inefficiency. Synthetic asset protocols can achieve liquidity reuse between multiple assets by centralizing 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 greater the concentration of liquidity. Ultimately, the protocol evolves from a single trading venue into the underlying 'leverage engine' of the entire ecosystem.
Another noteworthy direction is that it exists not only as a trading platform but also as 'infrastructure' that other protocols can call upon. For example, developers have embedded Avantis's perpetual contract functionality into the AI trading agent Bankrbot, allowing the AI to directly formulate and execute cross-asset trading strategies. This model showcases the composability advantages of DeFi: at the front end, it could be an RWA project or social application; at the back end, it is the leverage engine provided by synthetic asset protocols like Avantis. As this modular integration becomes commonplace, complex on-chain strategies, structured products, and even cross-market arbitrage can be rapidly realized.
The Base ecosystem, as a cradle for various DEXs, 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 segment within the Base ecosystem. In a certain sense, to completely achieve the next generation of perpetual DEX revolution, Base must be a pioneer.
BSX, currently a stable CLOB DEX operating on Base, has completed integration with Coinbase and has received financing from institutions like the Base Ecosystem Fund, led by former Coinbase developers, with a clear overall development path.
Avantis, another gem of the Base ecosystem, has a more stable positioning within the ecosystem. It received early support from Coinbase Ventures and the Base ecosystem fund, and is now one of the more active derivative protocols on the Base chain. According to public data, Avantis's fee income and sequencer contributions on Base have entered the top ten, indicating a certain level of user activity and trading depth.
At the product level, Avantis focuses on on-chain perpetual contracts and synthetic assets, gradually exploring zero-fee models and richer derivative designs. This positions it in the ecosystem not just as a single trading platform, but also with certain scalability and composability. Some in the industry refer to it as 'Drift Plus on Base' because it continues to meet the demand for perpetual trading while making differentiated attempts in product mechanisms.
Overall, both BSX and Avantis are promoting the development of the Base ecosystem's derivatives market, but in terms of data performance and product layout, Avantis has already shown stronger first-mover advantages and growth certainty.
Overall, as regulations become clearer, 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 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 development story of a decentralized exchange, but a process of redefining on-chain financial infrastructure.
Conclusion: The Paradigm Shift in Perpetual Trading
Overall, on-chain perpetual contracts are in a phase of rapid development, with technological advances and market demand mutually catalyzing the rapid growth of this field. With the optimization of clearing mechanisms, improved stability of oracle prices, and the enhancement of liquidity incentives, the protocol's performance in capital efficiency and user experience is continuously improving.
At the same time, the expansion of synthetic assets and cross-market trading further enriches the application scenarios of on-chain derivatives, making them capable of meeting the needs of crypto asset traders while gradually becoming an important bridge connecting traditional finance and crypto finance. Coupled with open composable 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 globalized direction, and are expected to become a key engine for the next stage of DeFi growth.
