Blockchains Unlock New Markets for Risky Assets

Andreesen Horowitz (a16z) argues that blockchains have removed geographic and listing constraints, allowing for new markets to form around risks that traditional finance struggled to package or distribute.

The firm's crypto post by Robbie Peterson frames blockchains as infrastructure for creating markets that traditional finance struggled to list efficiently. According to Peterson, geography, listing committees, and legal frameworks constrained market supply more than demand. Blockchains remove this friction by making issuance permissionless and distribution global, allowing exposures to emerge around events, credit, physical assets, and computing resources.

Permissionless markets expand what can be traded by separating risk into two dimensions: the underlying unit of exposure and the instrument used to transfer it. Traditional finance expanded slowly, with futures, options, ETFs, and credit derivatives emerging over decades. Crypto compresses this process by letting developers create both new assets and trading mechanisms onchain.

Perpetual futures provide a clear example. Because perps are synthetic, a market can exist once there is a reliable oracle and counterparties willing to trade. Hyperliquid's HIP-3 and HIP-4 frameworks push that model further by allowing users to launch derivatives and access liquidity. Permissionless perpetuals can transform equities, commodities, and other real-world exposures into 24/7 markets without waiting for traditional exchange listings.