Stock Contract Track Deep Research Report: The Next Trillion-Dollar Battlefield of On-Chain Derivatives

1. Product Essence: Structural Integration of Traditional Assets and On-Chain Derivatives

The essence of perpetual stock contracts is an on-chain synthetic derivative anchored to the price fluctuations of traditional stocks. Users can deposit stablecoins as margin to gain long and short exposure to the price movements of US stocks such as Apple, Tesla, Nvidia, and others, without actually holding the stocks themselves or enjoying shareholder rights like dividends or voting. This product design cleverly combines the asset base of traditional financial markets with the mature perpetual contract mechanisms of the crypto market, creating a new financial instrument that retains stock price risk characteristics while offering on-chain trading flexibility.

From a product positioning perspective, it is essential to clearly distinguish the fundamental differences between perpetual stock contracts and tokenized stocks (RWA Stock Tokens). Tokenized stocks are typically held by custodians who own the actual shares and issue tokenized certificates representing real equity on-chain, with legal attributes and regulatory frameworks closely aligned with traditional securities. In contrast, perpetual stock contracts do not involve equity rights; they track stock prices via oracles and establish a pure price risk trading market on-chain based on funding rates, margin, and liquidation mechanisms. This difference places them in entirely different categories: the former is a custodial and transfer solution for on-chain assets, while the latter is an innovation in risk derivatives.

The rise of perpetual stock contracts is not accidental but the result of multiple factors working together. On the demand side, there is a long-standing suppressed demand among global users for US stock trading—traditional brokerages have cumbersome account opening processes, cross-border fund flows are restricted, and trading hours are fixed—forming a stark contrast with crypto users’ “7×24 hours, stablecoin settlement, high leverage, and flexible trading” habits. Perpetual stock contracts provide an alternative path for users to bypass traditional financial systems and directly participate in US stock price movements. On the supply side, since 2025, the maturation of oracle technology, the proliferation of high-performance blockchain infrastructure, and intense competition among Perp DEXs have laid the technical and market foundation for productizing perpetual stock contracts. More importantly, perpetual stock contracts sit at the intersection of two major narratives: “RWA real-world assets” and “on-chain derivatives,” combining the vast capital base of traditional assets with the high growth potential of crypto derivatives, naturally attracting market attention.

2. Underlying Mechanisms: Price Discovery, Liquidation, and Leverage Challenges

The stable operation of perpetual stock contracts relies on a meticulously designed underlying mechanism covering price discovery, asset synthesis, risk control, and leverage management. Among these, the price source (oracle) is the cornerstone of the entire system. Since on-chain protocols cannot directly access real-time quotes from Nasdaq or NYSE, they must rely on decentralized oracles to reliably transmit traditional market price data to the blockchain. Current mainstream solutions include Pyth Network, Switchboard, Chainlink, and some protocols’ self-developed oracle systems. Pyth collaborates directly with market makers and exchanges to obtain first-hand quotes, emphasizing high-frequency updates and resistance to manipulation; Switchboard offers highly customizable price aggregation solutions, allowing protocols to switch update strategies based on different time periods; Chainlink relies on a decentralized network of nodes to provide robust, continuous, and verifiable price feeds. A few leading protocols like Hyperliquid use self-developed oracles, aggregating multiple data sources, constructing internal indices, and performing off-chain risk checks to achieve greater pricing autonomy.

The core issues for oracles go far beyond data transmission. US stock markets have unique structures such as trading hours restrictions (not 24/7), pre-market and after-hours volatility, and suspension mechanisms, requiring oracles to intelligently handle market state transitions. Mainstream solutions introduce market open/close markers, TWAP smoothing algorithms, and outlier filtering to ensure that prices on-chain do not deviate from real-world anchors during market closures, while also avoiding manipulation risks due to low liquidity. For example, after US markets close, oracles may automatically switch to low-frequency update modes or generate internal reference prices based on the last valid price combined with on-chain supply and demand, maintaining trading continuity while controlling tail risks.

At the asset synthesis layer, perpetual stock contracts do not mint tokens representing actual shares but create virtual positions linked to the stock’s price via smart contracts. Users deposit stablecoins like USDC as margin to open long or short positions, with profits and losses determined solely by the contract’s price and settlement rules. The protocol adjusts the balance of longs and shorts through a funding rate mechanism—when one side’s position becomes overly concentrated, the funding rate incentivizes opening positions in the opposite direction, maintaining overall system neutrality. Compared to crypto perpetuals, perpetual stock contracts must also consider overnight costs and the trading rhythm of the underlying US market, resulting in more complex cyclical patterns.

Liquidation mechanisms are central to risk control in perpetual stock contracts, facing the challenge of managing two asynchronous markets: US stocks trade only during specific hours, while crypto markets operate 24/7. When US markets are closed and crypto markets experience sharp volatility, collateral values can rapidly decline, risking liquidation of stock positions. To address this, mainstream protocols incorporate cross-asset risk engines and dynamic parameter adjustments. During US market closures, they automatically raise maintenance margin requirements, lower maximum leverage, and set earlier liquidation thresholds to mitigate gap risks caused by information discontinuity. When markets reopen, risk parameters gradually return to normal. This design preserves on-chain trading continuity while reducing systemic risks from cross-market mismatches through dynamic risk management.

Leverage design also reflects the differences between traditional assets and crypto products. While some crypto perpetual platforms offer leverage of hundreds of times or more, the mainstream protocols for perpetual stock contracts generally cap leverage at 5x to 25x. This is due to multiple considerations: first, stock prices are influenced by fundamentals such as earnings reports, macro events, and industry policies, with volatility structures different from crypto assets; second, features like gap openings and after-hours trading in US stocks can trigger chain reactions of liquidations at high leverage; third, regulators remain cautious about stock-related derivatives, and restraint on leverage helps reduce compliance risks. Even if the platform interface shows a maximum of 20x leverage, actual usable leverage is often dynamically adjusted based on market conditions, asset liquidity, and user positions, forming a “flexible surface with strict underlying risk controls” system.

3. Market Landscape: Differentiated Competition among Perp DEXs and Ecosystem Evolution

The current market for perpetual stock contracts has formed a competitive landscape led by Hyperliquid, Aster, Lighter, and ApeX, each demonstrating distinct technical architectures, product designs, and liquidity strategies.

Hyperliquid leverages its self-developed high-performance blockchain and the HIP-3 third-party framework, rapidly entering the perpetual stock arena through projects like Trade.xyz. Its core advantage lies in deep order books and institutional-grade liquidity—XYZ100 (a Nasdaq 100 index synthetic contract) can reach daily trading volumes of around $300 million, with open interest in commodities like SILVER and GOLD remaining in the tens of millions of dollars. Hyperliquid employs a multi-source median pricing mechanism, combining external oracle prices, internal EMA smoothed values, and order book market prices to generate robust mark prices for liquidation and margin calculations. This “professional-grade matching + synthetic pricing” dual-channel design strikes a good balance between high-frequency trading and risk control.

Aster innovatively offers a dual-mode architecture: Simple and Pro, catering to different risk preferences. The Simple mode uses an AMM liquidity pool, allowing one-click opening and closing of positions with zero slippage, suitable for high-frequency, small, short-term trading, with leverage capped at 25x. The Pro mode relies on on-chain order books supporting limit and hidden orders, providing deeper liquidity and more precise strategy execution, with leverage capped at 10x. Data shows that in Pro mode, daily trading volumes for contracts like NVDA remain in the millions of dollars, with open interest steadily growing, indicating sustained participation by professional traders. Aster’s “traffic entry + deep market” dual-layer design enables effective user segmentation and ecosystem expansion.

Lighter emphasizes zk-rollup proof-based matching systems, with all trading and liquidation processes verifiable on-chain via zero-knowledge proofs, highlighting transparency and fairness. Its current stock perpetual contracts support 10 US stocks, with leverage fixed at 10x, reflecting a conservative risk approach. Liquidity tends to be concentrated among top players—COIN (Coinbase) often exceeds $10 million daily volume, while stocks like NVDA have moderate trading volume but high open interest, indicating long-term strategic capital presence. Lighter balances user experience with simplicity: a minimalistic front end for quick onboarding, while the underlying order book infrastructure meets institutional execution needs.

Notably, the traffic entry points for perpetual stock contracts are expanding from a single official website to a multi-ecosystem approach. Based.one aggregates Hyperliquid’s contract engine to offer more consumer-friendly trading interfaces; Base.app integrates Lighter as a built-in trading module, allowing users to open positions without leaving their wallets; super apps like UXUY further streamline operations, packaging perpetual stock trading into near-Web2 experiences. This “underlying protocol + application layer entry” division of labor is lowering participation barriers and promoting the evolution of perpetual stock contracts from niche professional tools to mainstream trading products.

4. Regulatory Challenges: Balancing Innovation and Compliance

The greatest uncertainty facing perpetual stock contracts comes from the regulatory environment. Although there is no specific legislation targeting these products globally, regulators are highly attentive to their potential risks. The core issue is the legal classification: do perpetual stock contracts constitute unregistered securities derivatives?

In regulatory practice, the US SEC generally adopts a substance-over-form approach to securities-based derivatives. As long as the product’s economic substance is closely linked to regulated securities, regardless of its technical packaging, it may fall under securities law jurisdiction. The European ESMA, under the MiCA framework, has repeatedly emphasized that on-chain derivatives anchored to traditional financial assets must comply with existing financial regulations. This means that, although perpetual stock contracts do not involve actual custody of shares, their close correlation with US stock prices could lead to classification as securities derivatives or CFDs, triggering licensing, disclosure, and investor protection requirements.

Current regulatory focus remains on tokenized stocks directly mapped to physical assets, but for “synthetic risk exposure” like perpetual stock contracts, authorities are still observing. Future regulatory pathways may include: strengthening compliance responsibilities of front-end operators (such as trading interfaces and liquidity providers); requiring transparency of price indices and oracle data sources; restricting high leverage, enhancing KYC and regional access controls; and explicitly including these products within existing derivatives regulatory frameworks.

For protocols, strategies to reduce compliance risks include: clearly distinguishing “price tracking” from “equity tokens,” emphasizing the synthetic and hedging nature of the product; employing multi-source decentralized oracles to prevent manipulation; setting reasonable leverage caps and risk parameters to prevent excessive speculation; and fully disclosing product risks and legal disclaimers in user agreements. Long-term, the compliant development of perpetual stock contracts may involve collaborating with licensed institutions, offering services in restricted jurisdictions, or conducting innovative pilots within regulatory sandboxes.

Beyond regulatory risks, perpetual stock contracts also face market and technical risks such as oracle failures or malicious manipulation causing incorrect liquidations; cross-market volatility mismatches amplifying tail risks; insufficient liquidity leading to extreme slippage and difficulty closing positions; and smart contract vulnerabilities that could be exploited for funds loss. These risks necessitate protocols to establish multi-layered risk control systems, including but not limited to: multi-oracle redundancy and anomaly detection, dynamic margin adjustments, insurance funds, security audits, and bug bounty programs.

5. Future Outlook: From Niche Innovation to Mainstream Financial Infrastructure

From a market size perspective, the potential of perpetual stock contracts is vast. The total market capitalization of listed companies worldwide approaches $160 trillion, with over half outside the US, forming a massive asset pool of approximately $80 trillion. Even a tiny fraction of this capital participating via perpetual contracts could easily reach hundreds of billions of dollars in scale. Given that perpetual contract trading volume in crypto already exceeds spot trading by more than three times, perpetual stock contracts are poised to replicate similar derivativeization trends in traditional assets.

Product evolution-wise, perpetual stock contracts may just be the starting point of a “full-asset perpetualization” wave. As pricing mechanisms, clearing systems, and liquidity infrastructure mature, macro assets such as commodities (gold, oil), stock indices (S&P, NASDAQ), foreign exchange (EUR, JPY), and even interest rates could be incorporated into perpetual contract frameworks. Perp DEXs will gradually evolve from crypto-native trading platforms into comprehensive derivatives markets covering multiple asset classes, becoming key interfaces connecting traditional finance with on-chain ecosystems.

Regulatory environments are expected to shift from ambiguity toward clarity. Over the next 2-3 years, major jurisdictions are likely to introduce classification guidelines and regulatory frameworks for on-chain derivatives, clarifying the compliance boundaries for perpetual stock contracts. While this may cause short-term disruptions, it will ultimately benefit industry standardization and healthy development. Platforms that proactively build compliance capabilities, establish risk management systems, and maintain communication with regulators will gain competitive advantages under new rules.

In summary, perpetual stock contracts are at a critical breakthrough phase from zero to one. They are both an inevitable choice for Perp DEXs seeking new growth narratives and a testing ground for the integration of traditional assets with crypto finance. Despite ongoing technical challenges and regulatory uncertainties, the enormous market demand and asset scale behind them make this an unavoidable and highly promising track. In the future, perpetual stock contracts could become a pillar of the on-chain derivatives market and even reshape how retail investors participate in US stocks and global assets, truly realizing borderless, 24/7, and democratized financial markets. In this process, protocols that balance innovation, risk, and compliance are most likely to become the builders of the new era’s financial infrastructure.