Macro update

FOMC-driven sentiment dominated markets last week, as the Fed delivered its first 25bps rate cut of the year. Powell’s cautious press conference, dismissing the chance of a jumbo cut and flagging lingering inflation risks, trimmed some of the initial euphoria, but equities still pushed higher, with the Russell 2000, Nasdaq, and S&P 500 all closing in positive territory. The dollar softened, gold held firm, and 10-year yields steadied, reflecting expectations for another 50 bp of easing by year-end (2x 25bps before YE @80.6% probability).

For crypto, the week opened quietly ahead of the FOMC. Markets warmed into late week before momentum faded: total crypto market cap retreated to $4 T after briefly topping $4.2 T but failing to hold gains. Sunday’s sharp flush erased $1.7 B in long positions, the largest leverage reset in recent memory. Bitcoin oscillated around its 50-day moving average, briefly slipping below $115 K and breaking $113 K on Monday as the final full week of Q3 began, while Ethereum lagged as the weakest major. For BTC, $112k is the key support level to watch here.

Altcoin performance was selective rather than broad-based: there's a clear appetite to let standout names run hard on the back of headlines, but not yet a sweeping altcoin rally. BNB’s record highs, Aster’s 1,650 % debut surpassing Hyperliquid’s volumes, and Avalanche picking up steam, with DEX trading volumes climbing, stablecoin transfers increasing, and Korea’s KRW1 stablecoin going live.

On an index performance, large caps (GMCI-30, -4.67%) were the most resilient, while mid (-10%) and small caps (-7.75%) lagged; Layer 1 chains (-2.19%) slightly outperformed BTC (-2.60%), and the steepest losses came from higher-beta sectors like Meme (-10.86%), DeFi (-10.76%), Utilities & Tooling (-9.35%), and Layer 2 (-8.64%), underscoring that smaller and thematic sectors bore the brunt of the selloff.

Our take:

“Leverage is flushed, liquidity is supportive, but conviction remains shallow. Recent momentum didn’t manage to shift into a lasting uptrend.”

The $1.7 billion liquidation flushed out leverage but hasn’t shifted sentiment dramatically, as we see leverage relatively quickly recovering post liquidations. Capital is still willing to chase headlines selectively, which last week were BNB’s record highs, Aster’s breakout, and Avalanche’s uptick in activity. While exciting, this is still far from a broad-based altcoin rally as we roundtripped the total crypto marketcap back to $4T. With Powell’s comments, Core PCE data, and a post-triple-witching positioning reset on deck, markets are likely to trade choppily and react to headlines until a clearer catalyst emerges. Seasonal Q4 tailwinds and looser policy could still ignite a sustained move higher, but for now risk appetite is selective and opportunistic, not euphoric.

Notable headlines

• FTX Creditor Payout: FTX will distribute $1.6B to creditors on Sept 30, closing a major bankruptcy chapter and injecting fresh liquidity.
• Coinbase Network Token: Coinbase hints at a network token to speed its mission but no firm plans yet.
• USDC on HyperEVM: Circle launches native USDC + CCTP V2 on HyperEVM, boosting Hyperliquid’s cross-chain ecosystem post last week's announcement to introduce USDH as the stablecoin landscape on HYPE becomes more competitive.
• Agents/dAI: Google in collab with the EF, Coinbase, etc announced the integration of crypto into AP2 (its AI agent protocol), enabling trusted AI-agent transactions. Simultaneously, the Ethereum Foundation announces its dAI team, marking a renewed push into agent economies after the post-Dec 2024 cooldown, signaling somewhat of a normalization of the AI-crypto narrative.
• US–UK Crypto Deal: Washington and London move toward stablecoin-focused regulatory alignment and joint sandboxes, aiming to streamline cross-border crypto markets.
• SEC Clears Path for Spot Crypto ETFs: Approves generic listing standards, streamlining approvals and reducing review times, allowing exchanges to list Solana, XRP and other spot products without lengthy, case-by-case filings.
• MetaMask Token & mUSD: Consensys’ Joseph Lubin confirmed the future launch of the MASK token to decentralize MetaMask governance and incentives for 30M+ users. MetaMask also launched mUSD, a USD-backed stablecoin enabling seamless on-ramps, cross-chain use, and card spending.

Perp Dex "Wars"

After months of native-DeFi challengers testing Hyperliquid’s dominance, the first direct pushes from centralized exchanges arrived. Binance-backed Aster, Coinbase-backed Avantis, and Justin Sun’s SunPerp each signaled serious intent to compete in on-chain derivatives, mirroring the earlier pattern when CEXs either launched their own Layer-1s or aligned closely with specific chains to anchor liquidity. The rationale is simple: as perpetual DEXes capture mindshare and flow, CEXs can’t afford to stay on the sidelines.

Aster and Avantis

Two names dominated conversation this week. 

• Aster, formerly Astherus, is a multichain, high-frequency trading hub offering both perpetual and spot markets. With ultra-low maker fees (0.01%), hidden orders, and cross-chain bridging, it’s designed for speed and flexibility. Backed by Binance Labs and publicly endorsed by CZ, $ASTER surged more than 1,000 % in September, briefly reaching a $13 b FDV and surpassing $500 b in cumulative volume.
• Avantis, meanwhile, is built on Coinbase’s Base L2 and differentiates itself with zero-fee perps (charging only on profits), loss rebates, and listings that extend beyond crypto into RWAs such as FX, gold, and equities. It notched a $1.7 b weekly-volume high but still needs to establish recognition beyond Coinbase’s halo.

Perp DEXes have become a flagship DeFi narrative this cycle. Last week’s volumes across all perp DEXes hit $154 B, with Hyperliquid accounting for $60 B even despite strong short-term incentives to use other platforms (airdrops, etc.). Innovations such as custom chains, zk-rollups, verifiable orderbooks, and composable liquidity have made on-chain derivatives credible alternatives to CEX venues. The “farm-first, trade-later” meta of airdrops and liquidity rewards has supercharged adoption: Aster alone reached $340 M TVL before its token launch (now $1.14 B). Meanwhile, competitors are expanding addressable markets by adding RWAs like forex and commodities, giving traders leveraged exposure without relying on custodial platforms.

Our take:

“As one of the most successful pockets of DeFi, it is natural to see competition heating up. However this has been a trend of the past few quarters which just suddenly sees limelight due to CEXes entering the arena.”

This escalation isn’t noise but healthy market evolution. Diverse approaches, Hyperliquid’s buyback engine, Aster’s multichain bridging, Avantis’s RWA zero-fee model, force the market to compete on fee structures, capital efficiency, liquidity depth and privacy solutions. Such competition benefits end users and helps identify which mechanisms have staying power.

Although headlines frame this moment as “perp DEX wars,” the real story is expansion, not saturation. Reality is that competition in the perp dex landscape has been there for the past year, and is evident by HYPEs stagnating marketshare as newer players like Lighter, Orderly and EdgeX gained share from last generation incumbents like DYDX.

 it has just not been fueled by bids from CEXes entering the fray. Hyperliquid remains the clear leader yet aggregate weekly volumes across decentralized perps continue to climb sharply (see weekly-volume chart). What looks like a turf battle is, in reality, DeFi derivatives maturing and steadily eroding CEX advantages in pricing power, listing fees, and long-tail liquidity.

Conclusion

The arrival of heavyweight CEX-linked players was inevitable: perpetual futures are one of DeFi’s most lucrative businesses, and incumbents will not surrender that ground quietly. Circle’s CCTP V2 reaction to USDH illustrates how even infrastructure giants are adjusting to defend market share within DEX perp platforms. Perp DEXes have shown product–market fit, consistent revenues, and longevity, cementing them as the winning meta of this DeFi cycle. Expect consolidation around a few dominant venues by 2026, but for now, competition is growing more intense and innovation is accelerating as the perp DEX landscape is going through changes.

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