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Ethereum’s perps push shifts trading to layer-2 networks

Builders say perpetual futures demand low-latency, low-cost execution, which has helped Arbitrum and other layer-2s absorb much of the activity instead of Ethereum mainnet.

Reported · Written up by our desk · Market Structure

CoinDesk reports that as decentralized perpetual futures, or perps, have expanded, much of the trading activity has moved away from Ethereum’s base layer and toward faster layer-2 networks. Traders looking for onchain perpetuals are more likely to find venues such as Hyperliquid or Solana, and perps on Ethereum increasingly rely on layer-2 infrastructure.

The outlet attributes the shift to how perps work, noting they require frequent transactions, fast execution, and deep liquidity. AJ Warner, chief strategy officer at Offchain Labs and developer of Arbitrum, said the performance requirements make perps a natural fit for the Arbitrum platform.

According to CoinDesk, decentralized perps exchanges are also described as operationally demanding, with exchanges needing rapid updates, liquidations, funding payments, and order execution without interruption. Brian Smith of the Jito Foundation said perps platforms face existential risk if they go down, and that performance must reach very high success levels.

CoinDesk also points to economics as a driver, saying historically Ethereum mainnet fees and block times made it expensive for latency-sensitive trading applications. It notes that GMX’s 2021 launch on Arbitrum helped establish a template for later builders, and that Offchain Labs prioritized perpetuals as a strategic category, leading to more of Ethereum’s perps trading living on layer-2 networks like Arbitrum and, increasingly, Base.

Latest closeEthereum $1,882.90 ▼1.9%|Solana $72.59 ▼1.5%

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