Perpetuals Landscape

Perpetuals Landscape

Perps DEX Architecture

The design of perp DEXs across crypto have changed drastically over the past few years.

Offchain Order Books 

Typically, orderbook-based perp DEXs execute order matching offchain, keeping a traditional orderbook and matching engine on centralized servers or specialized sequencers. Only trade settlement or occasional state roots are posted onchain. This offloads heavy computation and enables high throughput with low latency. 

For example, dYdX v4 still runs the orderbook and margin engine offchain. This allows the protocol to have low latency* *and cost - trades can be confirmed near-instantly without waiting for block times. However, compared to fully onchain orderbooks, they suffer from lack of transparency: users must trust the operator to match orders fairly since activity happens in a “black box” offchain. This introduces risks of frontrunning or hidden advantages for insiders. It also exacerbates MEV at the order placement level, as a malicious sequencer/matching engine could reorder or cancel user orders for profit. Verifiable computation via zk-proofs is one solution being adopted to remove this trust requirement while keeping high performance (more on this below).

Fully Onchain Order Books