Ethereum's Perpetual Futures Trading Shifts to Layer-2 Networks Amid Execution Speed Concerns

Ethereum's perpetual futures trading has migrated to layer-2 scaling networks due to its base layer being optimized for security rather than execution speed. According to Brian Smith of the Jito Foundation, 'perps onchain are really hard,' requiring a high success rate and minimal outages.

The majority of Ethereum-based perpetual futures trading now takes place on Arbitrum and Base, with lower fees and faster block times compared to mainnet.

This shift has created competition from Solana and Hyperliquid, which offer lower fees and strong retail user bases. However, liquidity fragmentation across Ethereum's layer-2 ecosystem remains a significant challenge, acknowledged by Vitalik Buterin, co-founder of Ethereum.