In just 24 hours following its launch, Hyperliquid’s equity perpetuals (equity perps) achieved almost $100 million in trading volume. However, open interest reached a cap of $66 million.
This launch has sparked intense discussion within the crypto and DeFi communities, with many considering this a possible “golden opportunity” for the equity perps on-chain market. Others are skeptical, questioning if it is just a high-stakes experiment built on unstable foundations.
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New Opportunity: 24/7 Liquidity and the Evolution of Zero-Day Options
The remarkable debut of Hyperliquid’s equity perpetuals is generating discussions in the investment community. The standout feature of equity perps is their potential to convert the conventional equities market into a 24/7, fully on-chain trading environment.
Unlike traditional stock exchanges that operate for only a limited time each day, on-chain equity derivatives facilitate continuous, borderless, and transparent trading, in line with DeFi’s philosophy of open and permissionless markets.
Analysts maintain that equity perps are not intended to replace traditional stock futures, but rather to disrupt zero-day options (0DTE) – products that are popular among short-term speculators seeking leverage. Kirbyongeo explained that equity perps “don’t replace equity futures, they replace zero-day options.”
This transition taps into the greater demand for leverage in contemporary markets. José Maria Macedo pointed out that Robinhood generates nearly $1 billion yearly, about 25% of its total revenue, from options trading, showcasing a significant appetite for leveraged exposure. Equity perps could satisfy this demand on-chain, offering a more straightforward, decentralized alternative.
Some industry watchers even suggest that equity perps might rival crypto perps or stablecoins in scale. Ryan Watkins anticipates that global equity perps could represent crypto’s most substantial growth opportunity in the next 12–18 months, possibly outpacing stablecoins. Dylan G. Bane echoes this sentiment, proposing that the total addressable market (TAM) for equity perps could ultimately “outgrow stablecoins” as mainstream adoption takes hold.
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Risks and Realities: Legal Gaps and Market Depth
Despite the enthusiasm, several notable figures are expressing caution. DCinvestor criticized perpetual contracts as inherently flawed, cautioning that exchanges usually have insight into traders’ liquidation points, facilitating “liquidation hunts” in low-liquidity settings. Such dynamics could pose greater challenges in nascent on-chain equity markets, where liquidity and volatility might be limited.
“Perps are essentially a rigged game. Even if they weren’t necessarily rigged, the rules practically assure that you will eventually incur losses unless you possess exceptional risk and portfolio management skills,” he wrote.
Furthermore, equities are fundamentally different from cryptocurrencies. Stocks come with dividends, shareholder rights, and legal protections, none of which seamlessly translate to decentralized derivatives. An analyst warns that disconnecting equities from their legal structures may clash with long-term investment goals, while Sam suggests that current adoption expectations are “much higher than reality.”
“Equity perps could mark a pivotal moment for Hyperliquid. However, the road to adoption is uncertain, and current expectations are considerably higher than reality,” Sam observed.
Operationally, the primary challenge lies in developing transparent risk management systems, liquidation safeguards, and regulatory compliance. Absent these protections, similar to “circuit breakers” in traditional exchanges, on-chain equity perps could swiftly encounter skepticism and increased scrutiny from global regulators.
In summary, equity perps on-chain present a strategic innovation with vast potential, connecting traditional finance and decentralized trading. The allure is clear: 24/7 liquidity, heightened demand for leverage, and an internationally accessible framework. Nevertheless, success hinges on addressing critical challenges: liquidity, transparency, compliance, and investor protection.
