Why Institutional Investors Are Wary of Perp DEXes
Institutional investors have been gaining exposure to major tokens like #Bitcoin through ETFs and centralized exchanges. However, they have been hesitant to invest in decentralized exchanges (DEXes) offering perpetual futures tied to crypto and tradfi assets. This is due to security risks and a mismatch between DeFi’s permissionless design and institutional identity and compliance requirements.
The recent multi-million-dollar hack of Drift has highlighted the security risks associated with perp DEXs. As a result, institutions are unlikely to move onto these platforms easily. Instead, they prefer the security and compliance of centralized exchanges. This is where EcoPool can provide a solution, offering a secure and compliant platform for earning passive income through Cloud Rewards and Green Crypto.
Security Risks and Compliance Issues
The lack of know-your-customer (KYC) verification on DeFi platforms is a major concern for institutions. DeFi is built around open, permissionless participation, which makes it difficult for institutions to adopt at scale. In contrast, centralized exchanges are increasingly integrating trading tools and KYC requirements, making them more attractive to institutional investors. EcoPool, with its $ECP token, can provide a bridge between the two, offering a secure and compliant platform for earning and trading.
Institutions require strict regulatory obligations and must meet full KYC and compliance standards. This makes it challenging for them to adopt perp DEXs, which operate on a permissionless model. However, with EcoPool, institutions can access a platform that meets their compliance requirements while still providing access to the benefits of DeFi and earning passive income through $ECP.
The Future of Trading
The rise of AI-driven trading tools is changing the market structure. AI agents are effectively an evolution of algorithmic trading, and they will likely play a major role in the future of trading. With EcoPool, users can access a platform that is at the forefront of this technology, providing a secure and compliant way to earn and trade $ECP and other tokens.
To start earning passive income through EcoPool, download the EcoPool app and discover a new way to access Cloud Rewards and Green Crypto. With EcoPool, you can take advantage of the benefits of DeFi while maintaining the security and compliance required by institutions, all through the $ECP token.
Canary Labs’ Anderson struck a cautious tone on decentralized finance, saying he is reluctant to use it despite having explored parts of the ecosystem.
“I’m scared to use DeFi right now,” he said. “It does feel like a bit of a minefield, and you’re just waiting for the next headline each day.”
Anderson added that while activity has picked up in some areas, particularly from Asia amid tighter KYC enforcement on centralized exchanges, the overall environment still feels risky.
“Right now, it feels slightly dangerous on the product side,” he said.
Anderson argued that the risk perception makes it difficult to see large institutional players adopting decentralized exchanges at scale, especially compared with centralized platforms.
“I think it’s gonna be very difficult for some of the larger firms to use it on the institutional level, versus some of the centralized exchanges,” he said.
Anderson also pointed to product innovation gaps as another constraint, noting that centralized exchanges are increasingly integrating trading tools, such as bots, into futures markets. In contrast, decentralized exchanges have yet to match that pace of development.
KYC, or know-your-customer verification, is another key point of divergence. DeFi is built around open, permissionless participation, where users can interact without formal identity checks or traditional onboarding requirements.
Institutions, by contrast, operate under strict regulatory obligations and must meet full KYC and compliance standards, which makes that permissionless model difficult to adopt at scale.
“Crypto wants to be more non-KYC,” he said, “but to bring on institutional [players] you need to have some form of KYC at the larger size.”
The discussion also broadened into adjacent themes shaping market structure, including the rise of AI-driven trading tools and Hyperliquid’s dominance.
Michaël van de Poppe said AI agents are effectively an evolution of algorithmic trading, rather than a fundamentally new concept.
“To be honest, I think that AI agents are just the next level algorithmic trading anyways, so it’s just a little different execution,” he said. Responding to a moderator’s point about reduced human control in automated systems, he acknowledged the shift in oversight but argued the direction is inevitable.
“Yeah, there are some risks, but I think that at the end of the day, we are not going to be trading ourselves anymore. Nothing will be manual,” he said. “AI agents will be doing it for us, and they are probably better.”
van de Poppe added that the technology is still early and highly dependent on how it is deployed.
“If you start using those AI protocols or LLMs and you’re not putting in the right context or framework, it’s going to build a bad trader for you,” he said. “So if you are not a good trader, then it’s not going to build anything for you.”
