Exchange operators are always looking for liquidity, usually subsidizing 2-3 market makers to come on board and run hybrid maker/taker strategies against each other to create the appearance of volume and post some amount of visible liquidity on the book in exchange for a stipend or rebates. As the market matures those rebates decrease, but can't really ever go away as market making without rebates on leveraged instruments is not generally sustainable under all market conditions, yet markets need liquidity under all market conditions. What's often overlooked is the need to onboard a diverse set of takers, largely retail. A market with just 3-5 bots trading with each other around Binance mid has a verisimilitude of existing, but in fact does not. It's an echo chamber. This is the case for most perps DEXs out there, largely informed flow around the same reference price playing book spoofing and skew sniffing games, trying to catch mean reversion off of each other. It's a negative sum game either for the participants or the exchange depending on incentive structure. In 2010 Easley, Lopez de Prado, and O'Hara built a way to measure this. VPIN, volume-synchronized probability of informed trading, tracks buy/sell imbalance across volume buckets in real time. If you run VPIN on a tail perps DEX book it would read persistently elevated, because the flow is almost entirely informed. You can put a dollar figure on what that uninformed flow is worth. Citadel, Virtu, and Jane Street pay billions for the right to stand on the other side of retail order flow. Hyperliquid took a novel approach to the bootstrap problem via having in-house liquidity with HLP. Lighter took a different path, charging time instead of fees. Zero transaction fees but a 200-300ms delay on standard orders, the delay being the fee, with the vault trading against the delayed flow. This means that even with "zero fees", actual execution costs run 6-12 basis points per trade for standard accounts. Structurally identical to payment for order flow. Both of these venues were able to capture enough retail flow to get the flywheel spinning. So, as an exchange, what are the dimensions of differentiation? Instrument structure, leverage, underlying selection, latency, fee structure, UX. However, if all of the DEXs are trading the same basket of 30 cryptos copying the BitMEX margin system, running perps with the same kappa and iota, using NextJS and Tailwind with vanilla design and copycat product experience, websocket API hosted in Tokyo, then what really is there to differentiate on beyond incentive and fee structure? As mercenary capital rotates to new points programs and incentives, exchanges will live and die by, and only get traction, with proper incentive structures. Like anything there will be a handful that have staying power, and the meta overall is already pretty played out. That handful of venues is where the uninformed flow which makes markets sustainable will trade. For those high frequency trading on these venues there is obviously the latency and modeling race to be played, propagating information between venues and running volume to earn rebates. However, none of these games are really worth playing without uninformed flow present. It may well be, because of all of this, that significant value accrues at the perps frontend layer, enabling cross-DEX basis capture, providing superior execution, curating incentive structures. The exchange becomes the pipe. The frontend owns the user. And the user is the product that makes the market real. In fact, a large share of Hyperliquid's daily active users already trade through third-party frontends rather than the native UI. The top three builders have captured over tens of million in fees via builder codes. On Solana, trading terminals captured the majority of DEX revenue over the past year. This is unsurprising, and mirrors how tradfi played out with platforms like Robinhood. What it means is that owning the frontend experience is hugely valuable. The frontend owns the retail relationship, and the retail relationship is the uninformed flow, and the uninformed flow is what keeps markets healthy.