The "Invisible Hand" of Perp DEX: How Centralized Capital Manipulates Decentralized Markets?

The decentralized perpetual trading market is experiencing an unprecedented wave of growth and a reshaping of the competitive landscape. This article explores the phenomenon of power concentration under the seemingly decentralized Perp DEX, revealing how capital manipulates the market and users through four mechanisms. (Background: Perp DEX shuffle moment, how else can Hyperliquid play?) (Context: CZ confirmed the connection between Aster and former Binance employees, YZi Labs holds shares, the perpetual contract DEX track heats up) The core innovation of modern Perp DEX lies in the execution of smart contracts, on-chain transparency, and user self-custody. These technological advantages form its “decentralized” defensive cloak; however, this often obscures deeper power concentration. Power Concentration Trap: Implicit Monopoly of Economic Models and Governance Structures Although projects claim to be governed by the community, the distribution of tokens determines the centralization of power from the start. Most governance tokens are concentrated in the hands of founding teams, early investors, and VCs, turning the so-called “democratic governance” into a performance for a few large investors. More importantly, liquidity is the lifeline of Perp DEX, yet it is heavily monopolized by professional market makers and institutional LPs. Ordinary users find it difficult to compete in the “Matthew effect” of fee sharing and governance rewards, and the high proposal costs further exclude small investors from governance thresholds, making democracy an illusion. The Invisible Hand: Market Manipulation under Four Mechanisms Centralized capital does not directly attack the technical architecture, but achieves deep control over the market and users by establishing structural inequalities. 2.1 Monopoly: Capital-Driven Oligopoly Market Structure The Perp DEX market in 2025 shows astonishing concentration: the top four platforms (Hyperliquid, Aster, Lighter, edgeX) collectively control up to 84.1% of the market share. This extreme concentration is not the result of natural market selection but a product of capital filtering and skewing. For example, Aster gained nearly 10% market share shortly after its TGE, and its “airdrop success” fully demonstrates that background and capital play a decisive role far exceeding technological innovation. Large platforms attract more fees and resources through scale advantages, creating a positive feedback loop that establishes almost insurmountable liquidity barriers. In the current deteriorating financing environment, this oligopoly structure has been further solidified, nearly suffocating the survival space for new projects. Source: theblock Dual Standards of Governance and Trade-offs The most brutal manifestation of governance centralization is selective intervention mechanisms. Two classic cases from Hyperliquid clearly reveal how procedural justice fails in the face of the platform's own interests. The platform is not choosing whether to intervene or not, but is selectively exercising centralized power to ensure its interest structure is not threatened. The millions of dollars in losses for users are merely “market risks” in the eyes of the platform, while potential losses for the platform require urgent rescue by undermining the decentralization principle. The JELLY incident's lightning intervention: When the JELLY token faced significant price manipulation directly threatening platform liquidity and user treasury funds, Hyperliquid's response was remarkably swift. Validator nodes quickly reached an emergency consensus, bypassing all normal governance processes, initiating on-chain voting, and forcibly closing profitable orders, directly shutting down related manipulation accounts. The platform explained that this was an action taken to protect user treasury funds from loss, showcasing astonishing execution efficiency throughout the process. The XPL incident's indifferent response: In stark contrast, when manipulators profited over $46 million through a carefully orchestrated short squeeze operation in the XPL market, causing total losses for short order users of about $60 million (far exceeding the $11 million loss from the JELLY incident), Hyperliquid's attitude was entirely different. Source: hyperliquid discord The platform responded in its official Discord: “The XPL market experienced severe fluctuations, but the Hyperliquid blockchain operated normally as designed, with no technical issues. Liquidation and automatic position reduction mechanisms were executed according to public protocols, and due to the platform's completely isolated margin system, this event only affected XPL positions, and the protocol did not incur any bad debts.” In this capital feast, manipulators meticulously exploited the structural weaknesses of the Hyperliquid platform: First, the extreme on-chain transparency allowed manipulators to precisely calculate the necessary funds and expected effects; Second, the isolated oracle machine system caused XPL on Hyperliquid to adopt an independent pricing system, allowing manipulators to manipulate prices within this “encircled city” without worrying about the price balancing pressure from external exchanges; Third, they chose unlaunched “paper contract” tokens, which do not face spot delivery constraints; Fourth, they precisely selected the moment of weakest liquidity. The dual standard of interest calculation logic: This starkly different handling method exposes a clear interest calculation formula: the JELLY incident threatened the platform treasury, triggering intervention; the XPL incident only harmed user interests and did not damage the platform treasury, choosing to ignore it. The security of the platform's own funds is always the top priority, and the so-called decentralization principle is merely a decoration when it does not threaten the platform's core interests. The $60 million loss for users is merely a “market risk” in the eyes of the platform, while potential losses for the platform require urgent rescue by undermining decentralization. Protocol-Level Privilege and Liquidity Monopoly Source: hyperliquid According to the latest data, Hyperliquid's total TVL has reached $512 million, of which the protocol treasury HLP occupies $429 million, accounting for 84%. It has become the “shadow central bank” or “privileged class” of the protocol. In contrast, all User Vaults combined are about $83 million, dispersed across hundreds of independent vaults. Deep Analysis of HLP System Advantages Monopoly Mechanism of Liquidation Processing: HLP enjoys unique liquidation processing rights. When leveraged positions get liquidated and the order book cannot be fully matched, HLP absorbs the remaining positions with about 2x leverage and gradually closes positions through market-making strategies. This mechanism not only avoids cascading liquidations at the platform level but also directly allocates liquidation profits to HLP holders. In contrast, User Vaults cannot participate in backup liquidations at all, limited to custom trading strategies. Structural Advantages of Fee Sharing: HLP extracts about 45% of trading fees from the platform's overall trading volume, providing a stable passive income correlated with trading volume. Data from the first half of 2025 shows that HLP has obtained a significant share of cumulative platform revenue through this mechanism, while User Vaults rely solely on the performance of Leaders' strategies, with no fixed sharing rights. Collective Buffering of Risk Management: HLP achieves risk-sharing through a collective fund pool of over $400 million, and off-chain strategy optimization further reduces volatility. Data shows that HLP's volatility is far lower than BTC's 45%, allowing it to remain relatively stable in bull and bear markets, with an annual percentage rate of about 51%. In contrast, User Vaults are easily impacted by the failure of a single strategy. Systematic Constraints Facing User Vaults Structural Disadvantages in Information Acquisition: User …