DEVELOPERS
RESOURCES
Known as equity perps, perpetual futures on stocks and indexes are one of the fastest-growing products in DeFi. In a world of increased geopolitical uncertainty and interconnectedness, round-the-clock trading is the opportunity that is driving all the excitement.
A limited number of decentralized perps exchanges (perp DEXs) now offer 24/5 or 24/7 trading in these equity derivatives. Perps are an apt investment vehicle due to their existing 24/7, global trading in crypto assets derivatives, as well as their straightforward structure providing leveraged, directional exposure.
But the infrastructure underneath these markets, particularly the overnight spot markets that support the real-world asset (RWA) oracle layer, remains a limiting factor. This article covers some of the internal oracle solutions early innovators like Hyperliquid and Lighter have developed to cover the gap. However, tokenized, 24/7 stock markets must grow alongside equity perps, both for robustness of price discovery and trader hedging.
Below is a snapshot of the current landscape of equity perps DEXs and the internal pricing methods they use to replace RWA oracles during overnight and weekend periods.
Sources: Lighter, Ostium, Trade XYZ
Centralized exchanges (CEXs) like Kraken, OKX, and BitMEX have also launched equity perps trading. This article will focus on decentralized exchanges that operate onchain; their pricing methods tend to be more transparent and their need for RWA oracles more well defined.
The core technical challenge in equity perps is pricing: where does the reference price come from when the NYSE and Nasdaq are closed?
During exchange hours, RWA oracle feeds have spot data to work with. During weekday overnights, Alternative Trading Systems (ATS) data may be used. For example, Stork provides feeds from Blue Ocean ATS (BOATS) across their 24/5 trading hours.
BOATS has a long way to grow even within National Market System (NMS) ATS platforms, where other venues are market-hours only. The chart below shows Apple shares ($AAPL) on BOATS during a sample week, compared against the same week on all NMS venues, and against the entire market for Apple stock.
As you can see, stock market spot liquidity is an order of magnitude greater than NMS, and BOATS is a sliver of that.
\Perp DEXs offering 24/7 stock trading are filling the resulting gaps in RWA oracle data from BOATS with internal pricing mechanisms. For perp DEXs looking to support weekend trading, these mechanisms must be robust enough to protect against manipulation for 48 hours at a time.
When external data goes stale, perp DEXs like Lighter and XYZ switch to an internal pricing mechanism seeded from the last available external price and driven by live order book activity. This is especially challenging in a 24/7 context, since the equity perps order book itself tends to be thinner on the weekends. The mechanism perp DEXs use is a continuous-time exponential moving average (EMA) of impact prices.
The impact price is not a best bid or best ask. It is the volume-weighted average fill price for a specified notional size against the actual order book depth. A trader cannot manipulate it by posting a thin limit order; they would need to absorb the full configured notional on one side. This makes the internal pricing mechanism resilient to spoofing even when overall weekend liquidity is thin.
The EMA's role is smoothing. Without it, any single impact price reading could jerk the oracle sharply. With it, the oracle drifts gradually toward where the perp order book says the price should be, with limits on how fast it can move.
Notably, the impact price must cross the current orderbook price in order to change the oracle price: the price will only go up or down if there is a reasonable amount of volume bidding above or below the previous oracle price.
The following flow chart diagrams at a high level the off-market internal pricing methodology used by Trade XYZ, an equity perp DEX built on Hyperliquid, to support 24/7 trading in stock market derivatives.
Lighter does not support weekend trading in equity perps, but it does cover the overnight trading period, enabling 24/5 equity perps with a slightly different approach. Lighter ingests data from BOATS via Stork’s RWA oracle. If there are gaps, rather than a hard switch from oracle to internal pricing, the mechanism blends the two using exponential decay on the inactive source's weight.
These examples show what first movers and leaders are doing to cover spot market gaps and offer 24/5 or 24/7 stock trading, across times when there is scant or no spot market data for an RWA oracle to feed. As innovative as these mechanisms may be, perp DEXs will still face a problem building liquidity on nights and weekends. This problem comes down to the same issue that makes overnight pricing challenging: thin spot markets.
Professional market makers and other professional traders on perp DEXs hedge their derivatives exposure in real-time spot markets. When U.S. equity markets close, that hedge channel is thin or nonexistent. Makers respond by withdrawing liquidity or widening spreads. The equity perp DEX may continue to tick, but the order book thins out.
Tokenization issues an onchain representation of an asset held on deposit. (Learn more about the different risk and composability profiles of tokenized instruments vs blockchain oracle-backed synthetics.) If tokenized stock spot markets grow in liquidity, that can help remove growth limitations in equity perps. Tokenized market venues already offer 24/7 stock trading, but so far with relatively thin liquidity. The signals are strong that growth is around the corner. Established crypto and stock spot trading venues perceive a significant opportunity in tokenized stocks. The landscape of tokenized stock exchanges is about to double its number of operators.
The case for 24/7 equity perps seems obvious to those operating in onchain finance. Early innovators like XYZ and Lighter are showing the way, proving demand. For the opportunity to be realized, RWA oracle infrastructure and tokenized stock markets must develop in tandem.
The entrance of regulated players is perhaps the most encouraging sign that this convergence will take place. The NYSE and Nasdaq are both developing 24/7 stock trading capabilities, using tokenized stocks. Enthusiasm for equity perps alone won’t be enough to build a large and lasting 24/7 stock market, but these are strong signals that the other pillars of market maturity are moving into place.
As tokenized stock spot volume grows, overnight and weekend liquidity improves. Better liquidity gives traders better hedges; it also improves price discovery for RWA oracles. Better RWA oracles tighten equity perp mark prices. Tighter mark prices reduce maker risk, compress spreads, and deepen the order books that the internal EMA mechanism already samples. This virtuous cycle hasn’t begun to gain momentum, but the first signs of motion are visible.
