The Shifting Power Dynamics in Perpetual DEX Volume: Lighter's Rise and Hyperliquid's Fall

The perpetual decentralized exchange (Perp DEX) market in 2025 is a battlefield of innovation, scalability, and institutional adoption. While Hyperliquid once dominated with a staggering 71% market share in May 2025, its position has eroded to 20% by November 2025, as Lighter and Aster surge forward. This shift raises critical questions: Can Lighter's zero-fee model and ZK-rollup infrastructure sustain its growth? Is Hyperliquid's institutional-grade architecture enough to reclaim dominance in a consolidating market? Let's dissect the long-term viability of these protocols through their technological, governance, and tokenomic strategies.

Hyperliquid: Institutional Strength vs. Technical Vulnerabilities

Hyperliquid's proprietary Layer 1 blockchain and HyperBFT consensus mechanism have long positioned it as the go-to platform for institutional traders, offering sub-second order finality and 200,000 transactions per second. Its governance model, centered on ecosystem expansion and capital retention, includes initiatives like HyperEVM, Kinetiq (a liquidity staking hub), and USDH-a stablecoin backed by U.S. Treasuries according to reports. These tools reinforce its appeal to risk-averse, institutional-grade participants.

However, Hyperliquid's recent struggles are telling. Despite holding 63% of the total open interest across the top four platforms, its market share has plummeted from 71% to 20% in just six months. The October 2025 flash crash exposed critical weaknesses: a $10.31 billion liquidation event and performance issues that undermined user confidence. While its 99% fee-to-HYPE buyback model strengthens token utility, the platform's reliance on institutional infrastructure may not resonate with retail traders increasingly drawn to zero-fee alternatives.

Lighter: Retail-Centric Innovation and Scalability Risks

Lighter's meteoric rise is fueled by a zero-fee model, ZK-rollup-based infrastructure, and sub-five-millisecond latency-features that rival centralized exchanges. Its 27.7% market share in November 2025, with $12.78 billion in 24-hour volume, underscores its appeal to retail traders. A partnership with Chainlink further solidified its infrastructure, enabling Lighter to surpass Hyperliquid in 24-hour volume with $8.85 billion.

Yet, Lighter's long-term sustainability is in question. Its zero-fee strategy relies on future monetization through institutional API access and an unlaunched token, creating uncertainty about revenue streams. The October flash crash also revealed vulnerabilities: sequencer outages led to user losses, raising concerns about operational resilience. Additionally, its Lighter Liquidity Pool program, offering over 60% APY to attract liquidity, could prove unsustainable if yield demands outpace protocol revenue.

The Consolidating Market: Aster and EdgeX as Wild Cards

Aster and EdgeX are reshaping the landscape. Aster's 19.3% market share and $11.17 billion in 24-hour volume are bolstered by Binance integration and high leverage, but its credibility is marred by artificial volume manipulation and centralized risks. EdgeX, with $134.7 billion in October volume, is gaining traction as a secure, compliant alternative for risk-averse traders according to reports. These platforms highlight the market's shift toward hybrid models that balance decentralization with institutional-grade security.

Long-Term Viability: Institutional vs. Retail Dynamics

The Perp DEX market is consolidating into a duopoly of Hyperliquid and Lighter, with Aster and EdgeX playing supporting roles. Hyperliquid's institutional focus and USDH stablecoin provide a hedge against retail volatility, but its technical shortcomings could alienate users. Lighter's retail-centric approach and Chainlink integration position it as a disruptor, yet its zero-fee model and governance incentives may struggle to scale.

For investors, the key differentiator lies in tokenomics and governance. Hyperliquid's 99% fee buybacks create strong token demand, while Lighter's unproven monetization strategy risks dilution. Meanwhile, Aster's centralized risks and EdgeX's compliance focus suggest they will remain secondary players.

Conclusion: A Market at a Crossroads

The Perp DEX wars of 2025 are defined by a tug-of-war between institutional-grade infrastructure and retail accessibility. Hyperliquid's decline reflects the market's appetite for innovation and zero fees, but its technical resilience and institutional partnerships could still secure a comeback. Lighter's rise is impressive, yet its long-term success hinges on resolving scalability issues and launching a sustainable token model.

As the market consolidates, the winner will likely be the protocol that best balances scalability, security, and user incentives. For now, the data suggests a hybrid future: Hyperliquid may retain its institutional edge, while Lighter captures retail dominance. Investors must watch closely for governance upgrades, flash crash resilience, and tokenomic adjustments-factors that will determine which protocol emerges as the true leader in 2026.