It’s time to focus on regulatory issues not only today, but tomorrow. And that really means taking up the challenge of perpetual contracts.
Last week, Paradigm submitted a letter of comment to the CFTC offering that the agency performs a complete regulatory framework for perpetual derivatives listed in the United States. Although the recent request for comments from the Commission focuses closely on the perpes listed by centralized entities, the most important and really transformative opportunity is largely lacking: Perpetuals negotiated via decentralized financing protocols (DEFI).
Perpetuates are THE Dominant Global Crypto derived and already feed some of our most liquid and innovative markets. These inexpressing term contracts closely follow the markets in cash, offer significant capital efficiency and allow 24/7 exchanges without the reversal headaches of traditional term contracts. In fact, by 2025, Perps represented 93% of the whole volume of cryptographic derivatives – an amazing number which highlights their centrality on the market.
But perpetual ECFIs are only the miniature concept; These are perpetuals based on DEFI which are their true expression. Unlike their centralized counterparts, Perps DEFI are transparent and composable. Funding rates, open interest and commercial data are all in progress and verifiable. DEFI perpetuates integrate perfectly between the primitives DEFI, whether loan protocols, liquidity pools, prediction markets or options – unlocking powerful financial tools and without authorization. And because users have their own assets, the counterpart risk is minimized by design. The system is visible, forever moving and elegant.
However, despite these advantages, DEFI Perps remains effectively prohibited in the United States, trapped in regulatory and threatened gray areas (at least in recent years) by in-depth policies. The existing framework of the Commission is not designed for decentralized systems – and forcing PERPS in inherited boxes such as SEFS or DCMS risks stifling a whole category of financial innovation.
We ask the CFTC to adopt its mandate to promote responsible innovation and fair competition – and to do so by summoning a Perpetuals Special Advisory Committee (PSAC)Composed of experts from the academic world, the regulatory world and the private industry. This new organization should provide clear recommendations within 90 days on how Defi Perpetuals can legally operate under a modernized and neutral regulatory regime. This should be made up of experts in perpetuates, participants in cryptographic industry and also those who have an eye on Gimlet towards these products. The objective of the PSAC must be, like the other CFTC advisory committees, in search of truth, not just a group established to achieve a predetermined result.
More specifically, the PSAC should explore:
- Public interest exemptions For traditional SEF / DCM recording requirements;
- A Adjusted compliance framework This explains the decentralized nature of the Crypto Tech battery – with different rules for development teams, frontal and protocol users;
- A clear path to Detail participation which allows users of significant disclosure and appropriate guarantees, no spout or paternalism carrier.
The CFTC has already reported a distance from the regulations by the application – but it takes more. Defi protocols are not a fashion; These are substantial and sustainable financial infrastructures. The Commission has a unique opportunity to help America lead the next chapter of global development of derivative markets.
It is time to recognize that Defi Perps is not part of the market – it is his future. Let us give them the regulatory clarity they deserve and bring this activity to the ground.
Read the complete comment letter here.
