Onchain Perps Close Execution Gap, But Pricing Challenge Remains

A recent study by Castle Labs found that onchain perpetuals, also known as Hyperliquid, have closed the execution gap with traditional centralized exchanges (CEXs) for most crypto assets. The study analyzed live order books and discovered that Hyperliquid held as much resting liquidity as the median of Binance, Bybit, and OKX on four out of five crypto assets, and cost less to trade. However, the remaining gap lies in how venues price stocks and commodities when the underlying market is closed.

The study suggests that onchain perpetuals have made significant strides in bridging the gap with traditional exchanges, but there is still room for improvement. The fact that Hyperliquid can offer competitive pricing and liquidity without the need for central intermediaries is a major advantage. Nevertheless, the pricing of stocks and commodities remains a challenge for onchain perpetuals when the underlying market is closed.

The study's findings have implications for the development of onchain perpetuals and the broader cryptocurrency market. As the market continues to evolve, it will be interesting to see how onchain perpetuals adapt and improve in response to the challenges and opportunities presented by traditional exchanges.