Several major entities within the crypto industry have responded to the CFTC’s request issued in April. Their views outline how perpetual contracts could be reestablished within the United States.
Leading crypto firms are urging regulators to adopt crypto perpetual futures contracts. They argue that, with proper regulation in the U.S., these financial instruments could transform the derivatives trading landscape.
In 1992, American economist and Nobel Laureate Robert Shiller proposed perpetual futures to facilitate the trading of illiquid assets such as human capital and real estate.
These contracts have no expiration dates and settle daily between long and short holders. Price indices determine the payout for each party.
Originally introduced as a theoretical concept, these instruments have since been practically implemented across the crypto sector. Experts estimate they now account for approximately 93% of all crypto derivatives trading.
The Commodity Futures Trading Commission is currently evaluating whether existing regulations adequately oversee perpetual derivatives or if new frameworks are necessary to manage associated risks—especially as these instruments rapidly expand in crypto markets and potentially enter traditional asset classes.
Industry leaders such as Coinbase, OKX, Paradigm, and Hyperliquid responded to the CFTC’s April request for comment, emphasizing that perpetuals have become the dominant form of crypto derivatives.
Crypto firms are delivering a clear message to the CFTC: perpetuals represent the most significant financial innovation in the crypto space. With proper U.S. regulation, they believe the country could access a multi-trillion-dollar market that has largely thrived overseas.
Strength Meets Simplicity
Coinbase Derivatives stated that integrating offshore crypto derivatives markets into the U.S. regulatory framework would significantly benefit domestic markets and consumers. The exchange further observed that perpetuals account for “more than 90%” of crypto futures trading volume, even exceeding the volume of spot trading.
The statement added that perpetual futures offer greater accessibility due to their simplicity, enabling retail investors to gain leveraged exposure without dealing with the complexities of traditional futures contracts or spot crypto.
A research-focused crypto investment firm, urged the Commission to adopt decentralized trading protocols instead of limiting perpetuals to traditional exchange platforms.
Paradigm noted last week that “although registered entities offer important perpetual contracts, these represent only the initial and most surface-level portion of the broader perpetual contracts landscape.”
Paradigm has proposed forming a dedicated advisory committee for perpetuals to explore DeFi perpetuals. The initiative aims to harness “the power of smart contracts and blockchain technology” to help “accelerate the evolution of broader financial markets.”
Clarity Enabled by Technology
Hyperliquid Labs, the principal development team behind Hyperliquid, a specialized Layer-1 blockchain, outlined three primary advantages of decentralized perpetuals.
Firstly, decentralized systems achieve an unmatched level of transparency by immutably recording all user activities—such as order placement, cancellation, execution, and liquidation—and making them publicly auditable. This approach contrasts sharply with conventional systems, where firms typically keep trading data proprietary.
Hyperliquid Labs suggested that the CFTC explore how blockchain’s open architecture fosters composability, allowing various protocols to interconnect and collaborate within the ecosystem.
Hyperliquid Labs further noted that composability enables participants and developers to create “a broad spectrum of applications and strategies.” This capability promotes product and market innovation and opens the door to new potential use cases.
Hyperliquid Labs advocated for self-custody, highlighting that it allows traders to manage their collateral directly within personal wallets. This approach reduces reliance on centralized exchanges and safeguards against risks tied to centralized intermediary failures, hacks, or mismanagement of funds.
OKX emphasized the liquidity benefits of perpetuals, pointing out that these instruments help concentrate trading volume. In contrast, traditional futures often fragment liquidity across multiple expiration dates.
OKX stated that “the absence of multiple expiration periods enables perpetual futures to draw in more liquidity compared to traditional futures, especially for contracts with distant maturity dates.” Analysts also noted that perpetuals attract options traders who aim to hedge their positions, as well as basis traders who pursue arbitrage opportunities across different exchanges.
Crypto firms issued remarks after outgoing CFTC Commissioner Summer Mersinger expressed the agency’s intention to see crypto perpetuals “trading live very soon.”
