Decentralized perpetual volumes are soaring, dashboards are looking impressive, and the competition between venues is intensifying. However, not all volume is equal.
Here’s what you might be overlooking.
Source: TradingView
Exploring DEX Perpetual Markets
Data from Coinglass has uncovered a discrepancy between volume and actual market pressure.
Hyperliquid [HYPE] recorded $3.76 billion in trading volume, with $4.05 billion in open interest and $122.96 million in liquidations. This activity reflected real leveraged positions being initiated during volatile price movements.
In contrast, Aster [ASTER] reported $2.76 billion in volume with $927 million in open interest, but only $7.2 million in liquidations. Lighter [LIGHTER] exhibited similar patterns: $1.81 billion in volume, $731 million in open interest, and just $3.34 million in liquidations.
Source: X
Despite similar headline volumes to Hyperliquid, Aster and Lighter experienced liquidation activity that was significantly lower, ranging from 17 to 37 times.
Tracing Real Trading Activity in Perpetual Futures
Changes in open interest and liquidations often reflect real trading activity when leverage is involved. A surge in volume without proportional changes in OI and liquidations raises suspicions.
Source: X
Incentives, Reporting, and Demand Illusions
When there’s a discrepancy between high volume and low liquidations, it often indicates non-genuine risk-taking in trading. This could be due to incentives like points programs or airdrops, where traders engage in trades solely for rewards.
It could also result from market makers engaging in self-trading or variations in how exchanges calculate volume. While not necessarily indicative of foul play, there exists a significant disparity.
Hyperliquid stands out due to the synchronization of its volume, open interest, and liquidations, which aligns with genuine trader pressure.
Aster and Lighter’s headline volume warrants further scrutiny.
Final Thoughts
- High DEX perp volume means little without OI and liquidations to confirm risk-taking.
- Hyperliquid’s $123M in liquidations shows genuine market stress.
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