Analysis of Amber Labs' Latest Research Report: How Crypto Equity Perpetual Contracts Are Reshaping Traditional Finance

This report is organized, analyzed, and expanded based on the research report “The Perp-etual Question: Can Onchain Markets Capture Retail Equity Traders?” published by Amber Labs in November.

Author & Source: ME

Amber Labs is the leading global research and venture arm of Amber Group, focused on investing in and providing long-term support to high-potential Web3 projects. Its investment portfolio covers over 200 leading projects across key sectors such as Artificial Intelligence (AI), Decentralized Finance (DeFi), and Web3 infrastructure. The team upholds professional and compliant principles, deeply integrating cutting-edge blockchain research, precise market insights, investment, and liquidity solutions. With strong technical research capabilities and abundant ecosystem resources, Amber Labs continues to drive innovation and large-scale development of the crypto ecosystem, contributing to the industry’s sustainable and high-quality growth.

I. Introduction: Structural capital flow from Crypto to TradFi

Perpetual futures are considered one of the most disruptive financial innovations in the crypto industry.

With features such as no expiry date, 24/7 trading, unified margin system, and instant leverage operations, they have quickly become the core product of crypto derivatives and have surpassed traditional futures and options in trading volume.

Today, this successful mechanism is being introduced in reverse into traditional finance:

Equity perpetual contracts (equity perps) are bringing stock exposure on-chain, providing global users with a brand-new stock derivatives experience with no intermediaries, no geographic or account restrictions.

Equity perps allow users to gain synthetic exposure¹ to US stocks, indices, or even commodities, without relying on broker systems, exchange clearinghouses, or KYC. This structure means that, for the first time, the stock market may achieve 24/7 trading capabilities on blockchain infrastructure, bringing a completely different model of liquidity organization to the world.

II. The 0DTE Boom: Demand for Equity Perpetuals Already Exists

The emergence of equity perpetuals is not creating demand out of thin air—their growth logic stems from an already mature and rapidly expanding market: 0DTE (zero-day-to-expiry options).

Data for 2025 shows:

• Over 60% of SPX options are 0DTE

• About 50% of that volume comes from retail

• Research estimates: Average daily notional volume of index 0DTE exceeds $400–600 billion

Illustration: Share of 0DTE contracts in SPX options trading volume (2016–2025 to date). 0DTE now accounts for over 60% of SPX options, highlighting the growing retail demand for short-term leveraged exposure. (Source: Amber Labs, 2025)

This shows that global retail traders are flocking to:

Ultra-short cycles

High leverage

Strong speculative attributes

Rapid profit and loss feedback

These trading behaviors are highly consistent with the characteristics of perpetual contracts.

If equity perps capture even a fraction of retail 0DTE trading volume:

5% of retail 0DTE volume → Annualized revenue could reach $2–2.5 billion

10% of retail 0DTE volume → Annualized revenue exceeds $4 billion

In other words, the growth momentum of equity perps comes from an existing massive demand pool, not a new user education process.

III. Structural Opportunity: Short Selling Restrictions Give Perps a Natural Edge

Short selling mechanisms in the stock market have long been strictly limited. These restrictions not only suppress market efficiency, but also make it difficult for retail and some institutions to effectively express directional views.

Major constraints of traditional stock short selling include:

Securities available for borrowing only account for 2–3% of total market cap

Borrowing fees are consistently at 3–20% annualized, with hot stocks often exceeding 100%

High likelihood of securities recall, forcing investors to close positions

Retail traders typically lack qualifications or access to short selling

Thus, the ability to short is determined by broker, prime broker, and custody inventory, not by the trader’s views.

In contrast, perps build short positions in a fully synthetic way:

No need to borrow securities

No risk of recall

Shorting capacity is theoretically unlimited

Shorting cost is dynamically determined by the funding rate

Long-short symmetry, with more controllable risk

For example, in crypto markets, typical annualized funding rates for BTC/ETH perps are only 3–11%, much lower than borrowing costs for many hot stocks.

This means:

Equity perps have the potential to become the most accessible shorting infrastructure globally.

IV. Market Landscape: Divergence Between CLOB and GLP Models

Currently, equity perp DEXs are implemented mainly in two ways:

(1) CLOB (Central Limit Order Book) Model: Most Scalable

Representative platforms: Hyperliquid (HIP-3), TradeXYZ, Vest

Features:

Order book structure consistent with centralized exchanges

Depth comes from user behavior, not LP pools

Enables real price discovery

Supports high-frequency and institutional-grade strategies

Best suited for large-scale assets (e.g., index stocks)

Particularly, Hyperliquid’s HIP-3 mechanism makes it the first on-chain trading layer that allows “permissionless creation of new perp markets.”

TradeXYZ launched NASDAQ100 perps based on this system, demonstrating real weekend price discovery during traditional market closures, moving in line with CME futures openings. (Source: Amber Labs, 2025)

Vest’s advantage lies in data integrity, integrating:

NASDAQ, NYSE, CBOE, Pyth, pre-/post-market EDGX, and overnight BlueOcean ATS—its price coverage is closest to the traditional exchange system.

(2) GLP/OLP (Asset Pool Counterparty) Model: Easy to Launch but Has Limits

Representative platforms: Ostium, Gains Network

Features:

Similar to GMX, traders settle against an asset pool

Pricing relies on oracles, not order books

Easy to bootstrap liquidity, retail-friendly

Scalability is limited by TVL, cannot support large index perps

Usually cannot trade continuously during market closures, lacks 24/7 price discovery

Inherently zero-sum: asset pool profits only when traders lose

Therefore, GLP models are more suitable for early-stage exploration or small-scale assets, not large-scale products like stock perps.

V. Oracle Design is Core to Platform Competition

Unlike crypto assets, stock prices are distributed across distinct time segments:

Main trading session

Pre-market / post-market

Overnight

Market closed

Weekends

Event-driven gaps

Thus, the core technical challenge for equity perp DEXs is:

How to maintain reasonable price anchoring and funding rate logic during market closures.

Oracles affect not only price accuracy, but also:

Funding rate fairness

Exposure risk management

Liquidation paths

Cross-market arbitrage

Therefore, oracle capability directly determines platform usability and institutional participation.

VI. Core Challenges: Can Perps Carry the Long-Term Nature of Stocks?

Despite the promising outlook for equity perps, several structural criticisms remain, rooted in the asset’s nature:

1. Stocks are long-term assets, perps are short-cycle instruments

Stocks feature:

• Dividends

• Tax advantages for long-term holding

• Corporate governance rights

Perps lack these features, so their investment attributes are not equivalent.

2. Missing dividends create “long-short asymmetry”

Long perps cannot receive dividends, while shorts do not pay dividend costs.

This can affect funding rate balance.

3. Regulatory uncertainty

Perps are not under SEC/FINRA/MiFID frameworks, lacking clear regulation and protection.

4. Lack of investor protection

No mechanisms like the Securities Investor Protection Corporation (SIPC).

5. Large gap risk during market closures

Weekends and event-driven moves may lead to huge price differences between perps and spot.

These challenges will not halt the development of equity perps, but show that their positioning is closer to the trading layer rather than the investment layer.

VII. Outlook: Equity Perps May Become DeFi’s Next Growth Engine

If equity perpetuals mature successfully, they will drive three major structural changes:

(1) Introducing “external incremental capital” to DeFi

Including:

Retail traders who only trade stocks and not crypto

Global investors seeking 24/7 exposure

DAOs with high hedging demand

Hedge funds restricted from shorting

This is the most promising capital inflow channel for crypto markets in recent years.

(2) Creating a “global, round-the-clock, 24/7 price discovery layer” for stocks

On-chain perp markets can price in advance on weekends or react continuously during events,

For the first time, stock prices may not depend entirely on traditional exchanges.

(3) Posing competitive pressure on traditional exchanges

If on-chain perps have advantages in depth, responsiveness, fee structure, and global accessibility, TradFi will be forced to redesign its market structure.

VIII. Conclusion: Equity Perpetuals Are a Key Step Toward “Full Financialization” of Crypto Finance

Equity perps are not meant to replace stocks or serve as substitutes for traditional investment instruments.

Their significance lies in:

Modernizing stock trading capabilities, allowing global users to participate in borderless, intermediary-free, low-threshold, global price discovery on-chain.

This may be the first time the crypto industry exports market structure to traditional finance, instead of passively following.

From this perspective, equity perps are not just a new product, but the starting point for DeFi’s next phase—from the crypto asset market toward the “full financial asset market.”

¹ Equity perps replicate US stock price behavior through oracle pricing and funding rate models, allowing users to gain highly correlated economic exposure to spot stocks without actual ownership. This formalized price exposure is called “synthetic exposure.”

References

1. Amber Labs. The Perp-etual Question: Can Onchain Markets Capture Retail Equity Traders? November 2025.

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