Perp DEX Growth Faces Sustainability Challenge as Token Rewards Rise

Platforms such as dYdX, Hyperliquid and Lighter use points, airdrops and trading rewards. These tools can help new platforms get users and build market activity.

But there are concerns about Sustainability.

Some users may join a platform mainly to earn rewards. They may stop trading when rewards become smaller or lose value. This means high trading volume does not always show strong long term demand.

The launch of a platform token is also an important test. Before the token launch, rewards can help increase trading. After the launch, platforms need to show that users will stay because of the product and not only because of rewards.

Results from some platforms are mixed. Hyperliquid saw its average daily trading volume rise after its token launch. Its market share also increased.

Lighter saw its trading volume fall after its token launch. Its market share also dropped. edgeX also recorded lower trading volume and market share after its launch.

The story also shows that holding a platform token does not always mean a person is an active trader. On Hyperliquid, 86% of HYPE holders had never traded futures.

PopDEX is looking at a different way to share value. The platform wants trading-fee value to return more directly to real users and other people who help the market grow.

The main lesson is clear. Token rewards can help a new platform grow. But long term success will depend on real trading demand, good products, strong liquidity, low costs and users who stay without needing large rewards.