Ethereum moves to clearing role, perpetual contracts thrive on Arbitrum and Solana

Ethereum shifts to a settlement role in the perpetual contract boom, with Arbitrum and Solana becoming new home fields

Ethereum has long been regarded as the cornerstone of decentralized finance, providing impetus for early innovations such as on-chain lending and tokenized assets. However, one of the fastest-expanding sectors in the cryptocurrency field, perpetual contracts, is increasingly moving away from the Ethereum main network and finding a new home in other ecosystems.

Perpetual contracts find new home outside the Ethereum main network

Although Ethereum popularized many original DeFi protocols, perpetual contract transactions are now booming mainly on other networks. Traders often turn to platforms like Hyperliquid and Solana, which are built for speed and cost efficiency. AJ Warner, chief strategy officer of Offchain Labs, Arbitrum's main development team, pointed out that perpetual contracts require fast trading and deep liquidity, which makes Arbitrum an ideal choice. He emphasized that unlike the Ethereum main network, the layer 2 network can provide the performance required for high-frequency decentralized transactions.

Perpetual contracts require frequent transactions, rapid execution and deep liquidity, which makes them natural suitable for platforms like Arbitrum. These features have become increasingly important as decentralized sustainable exchanges expand from early crypto users to attract institutional investors. Perpetual contracts rely on rapid updates and continuous uninterrupted operation-if the platform is offline, the consequences can be severe.

Layer 2 networks improve performance, but fragmentation issues intensify

The Ethereum main network prioritizes security, which ensures secure settlement, but can lead to slow block times and high costs. This poses a challenge for delay-sensitive transactions, especially as perpetual agreements gain increasing attention. In 2021, the decentralized sustainable exchange GMX will be launched on Arbitrum, setting a template for subsequent projects. Offchain Labs has adjusted its strategy to make sustainable contracts a priority development direction, attracting a large number of builders and liquidity to gather on its platform. Today, most of the perpetual contract trading activity on Ethereum has been migrated to second-tier networks such as Arbitrum and Base, taking advantage of its lower costs and shorter block times. These developments have also improved the user experience by increasing mobility and community engagement.

Experience with Aerodrome, a decentralized exchange built on Base, shows that technical capabilities alone are not enough. Chris Boulous of Dromos Labs said that liquidity and the network effect created by users and protocol clusters are as critical as transaction speed.

Trading is essentially a network effect business-you have to choose to build where liquidity and users already exist.

Competition from private chain with Solana

Other ecosystems have adopted different expansion paths. Hyperliquid has developed a chain specifically designed for sustainable trading. At the same time, Solana has attracted a large retail transaction group with its low fees and fast processing capabilities, becoming a popular venue for sustainable contracts on the chain. Brian Smith of the Jito Foundation said retail activity is Solana's core strength, which allows Solana to maintain a leading position in high-volume, retail-driven transactions.

Smith also pointed out that the fragmentation of Ethereum is a challenge because the network spreads mobility and users across multiple Layer 2 networks. This can complicate the trading experience compared to the relatively unified landscape of single-chain networks such as Solana. Ethereum's expansion path prioritizes the use of Layer 2 networks to handle higher-frequency activities, while developers continue to explore ways to improve interoperability and reduce friction among traders when transferring assets between different ecosystems.

Settlement and collateral: The evolution of Ethereum's role

Despite these challenges, many industry leaders believe that Ethereum's function as a core settlement and collateral layer remains critical. Matthieu Saint Olive, product manager at MetaMask, emphasized that competition in the on-chain trading space may be exaggerated. In his view, even if faster transactions occur elsewhere, Ethereum remains the foundation of global liquidity, assets and stablecoins.

The leading decentralized perpetual contract platform is deeply bound to Ethereum, relying on its second-layer network for expansion, settlement, and developer support. Layer 2 networks enable Ethereum to support active transactions while protecting the network's basic security and composability.

With institutional interest in on-chain derivatives growing, the next challenge facing the space is attracting substantial institutional funding. Warner of Offchain Labs said that the issue of capital fragmentation still exists, and institutions want more efficient cross-margin management, better credit access, and simplified trading processes across exchanges.

In this evolving landscape, the ability to efficiently transfer and diversify assets is receiving more attention. Platforms such as 1stepSwap meet these needs by integrating traditional assets with digital assets. 1stepSwap introduces real-world assets directly into the blockchain, allowing users to gain shares of leading U.S. companies and commodities such as gold and silver directly from their wallets, and always trade at the best price on the market. This ability to buy and sell major stocks instantly at optimal prices helps broaden portfolio opportunities for a variety of market participants.

As perpetual contract trading infrastructure matures, observers see it as a testing ground for programmable chain-based markets. The continuous migration of financial activity from traditional systems to blockchain is shaping Ethereum's new positioning, and its role as a core settlement and collateral hub is becoming increasingly prominent.