Key Takeaways
- OKX CEO Star Xu said Hyperliquid has shown that on‐chain perpetual derivatives (perps) can succeed even with very small teams, and that competitors like ASTER are now entering this competitive space.
- OKX Web3 has been testing a similar product since 2023 but has delayed launching on mainnet due to regulatory concerns.
- Star raised caution that, while on-chain perps are growing, the industry must not forget the CFTC’s 2023 enforcement actions against Deridex, Opyn, and ZeroEx, which highlight the need for clear regulatory rules.
Background
What are on-chain perps?
On-chain perpetual derivatives are contracts that allow traders to take leveraged positions on assets without expiry dates, executed via smart contracts on blockchains (i.e. decentralized exchanges or perpetual DEXes). Hyperliquid is one of the notable platforms currently popularizing this model.
Who is ASTER?
ASTER is a newer entrant in the decentralized derivatives/perps space, backed by entities including YZi Labs (formerly Binance Labs). Its token (ASTER) has seen significant upside since launch, attracting traders and attention as a competitive alternative to established players like Hyperliquid.
What Star Xu Said
- In posts on X (formerly Twitter), Star emphasized that Hyperliquid’s success demonstrates that even small teams can build viable on-chain perps.
- He noted that OKX Web3 has been exploring such a product since around 2023 but has not launched fully (mainnet) because of unresolved regulatory uncertainty.
- Star cautioned that the DeFi / crypto industry should keep in mind past regulatory enforcement — particularly the CFTC’s 2023 enforcement involving Deridex (among others) — as they design and deploy on-chain perpetuals. The Deridex, Opyn, ZeroEx cases were enforcement actions for offering leveraged or margined transactions, swaps, etc., without required registrations, compliance with U.S. rules.
Regulatory Context: CFTC 2023 Enforcement
- On September 7, 2023, the U.S. Commodity Futures Trading Commission (CFTC) filed and settled charges against Opyn, Inc., ZeroEx, Inc., and Deridex, Inc.
- Violations included failing to register as a Swap Execution Facility (SEF) or Designated Contract Market (DCM), failing to conduct required customer identity / KYC programs, and illegally offering leveraged and margined retail commodity transactions in digital assets.
- Deridex in particular was cited for offering perpetual contracts or derivatives-like instruments via decentralised protocol without proper registration / oversight.
These cases serve as precedent for the risks associated with launching unregulated or under-regulated perpetual derivatives products, especially with U.S. persons or from entities exposed to U.S. jurisdiction.
Implications for the Industry
- Innovation vs Compliance Tradeoff: OKX’s position shows many players are attracted to on-chain perps because of innovation potential (transparency, decentralization, new product designs) but are cautious because regulatory rules are currently uneven or unclear.
- Need for Clear Guidelines: The Deridex/Opyn/ZeroEx enforcement shows that regulators view many decentralized derivative offerings as subject to regulations (Swap, SEF, etc.), even when they are executed with smart contracts. Participants in this space must consider whether their product design might trigger regulatory obligations.
- Competition Heating Up: With entrants like ASTER coming in, and with Hyperliquid’s strong position, competition in decentralized perpetuals is intensifying. OKX may hold back launches until regulatory frameworks are clearer, giving competitors possibly an early mover advantage but also exposing risk.
Bottom Line
OKX’s CEO Star Xu is bullish on the potential of on-chain perpetual derivatives, citing Hyperliquid’s lean success and the rising competition from ASTER. However, in a sector facing regulatory crosswinds, OKX has delayed its own product’s mainnet launch due to concerns. The CFTC’s 2023 enforcement actions — especially against Deridex, Opyn, and ZeroEx — remain an important reminder: decentralized does not automatically mean regulation-free. As the industry grows, clarity from regulators will likely be a key factor in who succeeds and who is forced to retrench.
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