Crypto World
What is a perp DEX? The three architectures, compared
Every guide tells you a perp DEX is a decentralized exchange for perpetual futures. Almost none tells you that the label covers three incompatible designs, that who takes the other side of your trade differs completely between them, and that the difference only becomes visible during the hour you most need to understand it.
Summary
- A perpetual decentralized exchange lets traders take leveraged long or short positions on assets they never own, using contracts with no expiry, settled by smart contracts from a self-custodial wallet.
- Perpetual futures stay tethered to spot prices through the funding rate, a periodic payment between longs and shorts that makes deviation expensive, replacing the settlement date that anchors traditional futures.
- The term covers three different architectures: on-chain order books matching traders against each other, pooled-liquidity venues where depositors take the other side against an oracle price, and hybrids that separate matching from settlement.
- Who your counterparty is depends entirely on which architecture you are using, and that determines what happens under stress: order books face liquidity gaps, pooled venues face oracle dependence and depositor losses.
- Every design shares one risk chain, margin to liquidation to backstop to auto-deleveraging, and understanding where a venue sits in that chain matters more than any yield or fee comparison.
The definition of a perpetual decentralized exchange takes one sentence and explains almost nothing useful. Yes, a perp DEX is a platform for trading perpetual futures on a blockchain from a wallet you control. That sentence covers venues whose internals have almost nothing in common: one where your order rests in a public book and fills against another trader, one where a pool of depositors automatically takes the other side of everything you do at a price fed by an oracle, and one where matching happens off-chain while settlement happens on it. Those are different products wearing one label, and the difference is invisible in calm markets and decisive in violent ones, which is exactly the wrong distribution for a fact to be hidden. This guide starts with the instrument, then separates the architectures, then follows the risk chain that all of them share, because a trader who understands which machine they are inside understands what can actually go wrong.
The instrument first
Before the venue, the contract, because everything downstream follows from its structure.
A perpetual future is an agreement to take on price exposure to an asset without owning it and without an expiry date. You post collateral, open a long or a short, and your position gains or loses as the price moves, with leverage letting the position exceed the collateral behind it. Traditional futures solve the problem of keeping contract prices near spot prices by settling on a fixed date, which forces convergence. Perpetuals have no such date, so they use a different mechanism: the funding rate, a periodic payment flowing between longs and shorts depending on which side is more crowded. When the contract trades above spot, longs pay shorts, making the crowded side expensive to hold and pulling the price back. When it trades below, the flow reverses.
Two consequences deserve emphasis because new traders consistently miss them. First, funding is a real, recurring cost or income, not a technicality, and over a long hold in a persistently one-sided market it can dominate the profit or loss from price movement itself. Second, the design was invented in crypto, introduced in 2016, and became the dominant derivatives structure in the asset class, which means the vast majority of crypto derivatives volume trades in instruments with no settlement date and a payment stream that most participants never model.
Leverage completes the picture and supplies the danger. Collateral supports a position larger than itself, and when the position moves against you far enough that your collateral no longer covers the potential loss, the venue closes it. That event is called liquidation, it is automatic, it is priced off a reference calculation, not the last trade, and it is the single most common way retail participants lose money in these markets.
Three architectures
Here is where the generic explanations stop and the useful part begins. Perp DEXs solve one hard problem, how to have a counterparty, in three incompatible ways.
The on-chain order book. Traders post bids and offers into a book, and the venue matches them against each other, exactly as a traditional exchange does. Your counterparty is another trader. The design’s advantage is that pricing emerges from the book instead of from an external feed, so it can support tight spreads, professional market makers, and large size without a pool absorbing the risk. Its difficulty is technical: maintaining an order book with fast matching and cancellation is demanding on a blockchain, which is why venues using this model have generally built dedicated infrastructure instead of deploying onto a general-purpose chain. Its stress behavior is the classic one: when the book thins, liquidations execute at worse prices, and the gap between the liquidation price and the achievable price becomes somebody’s loss.
The pooled-liquidity model. Depositors contribute assets to a shared pool, and that pool takes the other side of every trade, with prices supplied by an oracle instead of discovered in a book. The advantage for the trader is that liquidity is always present at the quoted price with no slippage of the usual kind, and the advantage for the depositor is a yield derived from fees and, structurally, from trader losses. The costs are two: the venue depends entirely on the oracle’s accuracy, making price feed manipulation the primary attack vector, and the depositors are collectively the house, which means a period in which traders are systematically right is a period in which the pool loses money. That is not a malfunction; it is the design working as specified.
Hybrids and vault-backed books. Several major venues combine elements: an order book for matching, with a protocol-owned vault providing liquidity into that book and acting as the backstop counterparty when liquidations cannot clear on the open market. This structure gives traders order book pricing and gives the venue a capital buffer, funded by depositors who are compensated for absorbing exactly the events order books handle worst. The trade is that vault depositors, who often understand themselves as passive yield earners, are in fact short volatility and long the venue’s operational competence, which is a considerably more complicated position than an advertised annual percentage rate suggests. Crypto.news has also audited the category leader, where these design choices now carry market-wide importance.
The practical instruction: before using any venue, settle which of these three you are in. The answer determines whether your counterparty is a trader, a pool, or a hybrid, and therefore what stress does to your position.
The risk waterfall
All three architectures share one chain of defenses, and knowing its steps is what separates informed participation from surprise.
Step one, margin. Your position must maintain collateral above a maintenance threshold. Fall below and the position becomes eligible for closure. Thresholds vary by asset and leverage, and they are calculated against a reference price the venue computes, typically a blend of external and internal data, and not the last trade on the venue’s own book, which is a protection against manipulation and a source of confusion when a chart briefly shows a price that did not trigger anything.
Step two, liquidation. The venue closes the position, usually by pushing it into the market. If it clears near the expected price, the process ends there and the trader loses their margin, sometimes with a remainder returned depending on the venue’s rules.
Step three, the backstop. If the market cannot absorb the position, something else must. Depending on the architecture, that is an insurance fund built from prior liquidation proceeds, a protocol vault taking the position onto depositors’ balance sheet, or the pool that was already the counterparty. This is the step where designs diverge most, and where a venue’s real risk profile lives.
Step four, auto-deleveraging. If the backstop is exhausted, the accounting must still balance, and the venue reduces positions on the winning side to close the gap. This publication covers the last step in the risk chain separately because it deserves its own treatment; the summary is that in extreme conditions, profitable traders can have positions closed against their will to keep the venue solvent. It is rare, it is disclosed in every serious venue’s documentation, and it is the risk that most surprises experienced traders when it arrives.
Any venue that cannot explain, in its own documentation, exactly what happens at steps three and four is a venue whose risk you cannot assess.
What you gain and what you give up
Set against a centralized exchange, the honest ledger has entries on both sides.
The gains are real: self-custody, so your collateral is not sitting on a company’s balance sheet, a lesson the industry paid for in 2022; transparency, since positions, liquidations, and in many cases the venue’s own vault activity are publicly verifiable instead of reported; permissionless access without account approval; and, increasingly, product range, since venues that can list markets by code instead of by committee have moved into assets a regulated exchange would take years to approve. Crypto.news has covered what these venues now list as equity perps and synthetic stock markets expand the category beyond crypto pairs.
What you give up is also real and less discussed. There is no support desk with the authority to reverse anything, no deposit protection, no regulator supervising the venue’s solvency, and no recourse if the code behaves as written but not as you expected. Oracle dependence introduces a failure mode with no equivalent on a traditional exchange. Smart contract risk is permanent even after audits. And venue concentration means most on-chain perpetual volume runs through a small number of platforms, so the sector’s risks are correlated in ways the self-custody story obscures: holding your own keys does not help if the venue holding the order book fails.
How the category arrived here
A short history clarifies why these venues look the way they do, because almost every design choice is a response to something that went wrong.
The perpetual contract itself was introduced on a centralized crypto exchange in 2016, solving a real problem: crypto markets trade continuously and globally, and a derivatives instrument requiring periodic settlement and rollover fits that badly. The funding-rate design let a contract track spot indefinitely, and the structure proved so well suited to the asset class that it became the dominant form of crypto derivatives, accounting for the large majority of all derivatives volume in the market.
Decentralized versions followed, and their first generation was defined by a problem they could not solve elegantly: blockchains were too slow and too expensive to host an order book with the constant order placement and cancellation that market making requires. The workaround was pooled liquidity with oracle pricing, which needs no order book at all, and that architecture dominated the early years while carrying its two structural costs, oracle dependence and depositors serving as the house.
Two events reshaped the category after that. The collapse of a major centralized exchange in 2022 made self-custody a mainstream priority instead of an ideological preference, and volume began migrating toward venues where collateral never left the user’s control. And a second generation of infrastructure, purpose-built chains and application-specific designs, made on-chain order books practical at speeds competitive with centralized matching, which is why the venues that lead the category today mostly run books and not pools.
The most recent shift is economic, not technical. The first wave of perp DEXs bought volume with token incentives, paying users to trade, which produced impressive numbers and little durable business. The current cohort competes on real revenue: fees actually collected, insurance funds actually capitalized, and yields paid from trading activity instead of from emissions. That distinction is checkable by anyone, since protocol revenue data is public, and it is the single most useful filter for separating venues with a business from venues with a marketing budget.
What to check before using one
Five things, in the order they will cost you money if you skip them.
The architecture. Order book, pool, or hybrid, and therefore who takes the other side. This is checkable in any competent documentation and determines everything else.
The oracle. If the venue prices positions from an external feed, find out which one, how it is aggregated, and what happens if it stalls. Manipulation of thin underlying markets to move a venue’s reference price is the attack that has actually happened, repeatedly.
The backstop and the ADL policy. Read steps three and four in the venue’s own words. If auto-deleveraging exists, learn how it selects positions, which is typically by some combination of unrealized profit, leverage, and size.The funding regime. Check current and historical funding on the market you intend to trade. A persistently expensive side turns a correct directional view into a losing position over time.
The collateral. In most venues, the position is only as stable as the asset backing it. Crypto.news has explained the collateral behind every position and how USDC, USDT, RLUSD, and other dollar tokens try to hold their peg.
Your own leverage. The most controllable variable and the one most often set by ambition. Lower leverage widens the distance to liquidation, reduces your ranking in any deleveraging queue, and costs nothing but patience.
One closing caution about a number these venues advertise heavily and readers should discount appropriately. Perpetual decentralized exchanges frequently promote maximum leverage figures, and the numbers have climbed steadily as venues compete. High leverage is not a feature in any meaningful sense; it is a permission, and the permission is asymmetric in whom it benefits. A venue earns fees on notional volume, so a trader using fifty times leverage generates fifty times the fee revenue of the same collateral deployed unlevered, while the trader’s probability of surviving ordinary volatility falls accordingly. The interface presents the choice as a slider, which is an unusually elegant way to disguise a decision that determines almost everything about the outcome.
The arithmetic worth internalizing is simple. At ten times leverage, roughly a ten percent adverse move eliminates the position, before fees and funding. At fifty times, roughly two percent does, and two percent moves happen in crypto several times a day. Reference prices, maintenance margin buffers, and partial liquidation mechanics change those numbers at the edges, but not the order of magnitude. Any strategy that requires high leverage to be worth executing is a strategy whose edge is too small to survive the costs, and the deleveraging queue discussed above ranks high-leverage positions first for closure precisely because venues understand which accounts are fragile. The traders who last in these markets are, with dull consistency, the ones using far less leverage than the platform allows.
A note on where this category sits relative to the regulated world, because the boundary is moving and it changes what these venues will be. Perpetual futures are, in American regulatory terms, derivatives, and offering them to US retail customers requires registration that most on-chain venues do not hold, which is why the largest perp DEXs restrict US access formally and operate offshore in practice. That arrangement has been stable for years and is now under pressure from two directions at once. Regulated venues are moving toward perpetual-style products of their own, and at least one designated contract market has been building in that direction, which would give American retail a licensed route to the instrument for the first time. That is the regulated alternative, compared.
Meanwhile the on-chain venues have expanded into equity-linked and commodity-linked perpetuals, which pulls them further into territory that securities and derivatives regulators consider theirs.
The likely destination is a bifurcated market resembling every previous generation of derivatives: a regulated onshore version with lower leverage, identity requirements, and recourse, and an offshore permissionless version with the reverse. Traders should expect the choice between them to become explicit, not technical, and to be asked, at some point, to pick which set of protections and restrictions they want. Reading a venue’s own jurisdictional disclosures before depositing is the practical version of that decision, and it is worth doing now instead of after the perimeter moves.
Frequently asked questions
What is a perp DEX in one sentence?
A blockchain-based platform where traders take leveraged long or short positions on perpetual futures, contracts with no expiry date, using collateral from a self-custodial wallet, with pricing, margin, liquidation, and settlement handled by smart contracts rather than by a company holding customer funds.
What makes a perpetual different from a normal future?
No expiry date. Traditional futures settle on a fixed date, which forces the contract price toward spot as settlement approaches. Perpetuals never settle, so they use the funding rate, a recurring payment between longs and shorts based on which side is more crowded, to keep the contract tethered to the underlying price. That payment is a real cost or income, not a technicality.
Are all perp DEXs the same underneath?
No, and this is the most consequential thing most guides omit. Some run on-chain order books where your counterparty is another trader. Some use pooled liquidity where depositors collectively take the other side at an oracle-supplied price. Some combine both, matching on a book while a protocol vault provides liquidity and absorbs positions that cannot clear. Stress behavior differs completely across the three.
Who is on the other side of my trade?
It depends on the architecture. On an order book venue, another trader. On a pooled venue, the depositors in the liquidity pool, who profit when traders lose and lose when traders win. On a hybrid, some combination, with a protocol vault frequently acting as the counterparty of last resort during liquidations.
What happens if my position gets liquidated?
The venue closes it once your collateral falls below the maintenance requirement, calculated against a reference price rather than the last trade. If the position clears in the market, the process ends there. If it cannot, a backstop absorbs it, an insurance fund, a protocol vault, or the liquidity pool, and in extreme cases the venue reduces winning positions on the other side through auto-deleveraging to keep the books balanced.
Is a perp DEX safer than a centralized exchange?
Different, not uniformly safer. You keep custody of collateral, positions and liquidations are publicly verifiable, and access requires no account approval. Against that, there is no deposit protection, no support desk that can reverse anything, no supervisor checking the venue’s solvency, plus oracle dependence and smart contract risk that centralized venues do not share in the same form.
What is the funding rate costing me?
Whatever the crowded side is paying, charged periodically for as long as you hold. In persistently one-sided markets this can exceed the profit from a correct directional call, particularly on longer holds. Current and historical funding is published by every serious venue and should be checked before entering, not discovered afterward.
What should a beginner do differently?
Use low leverage, which widens the distance to liquidation and lowers your position in any deleveraging queue; read the venue’s documentation on backstops and auto-deleveraging before depositing; check funding history on the specific market; and size positions on the assumption that the worst-case mechanics will eventually apply to you, because in leveraged markets they eventually do. This is educational information, not investment advice.
Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. Leveraged derivatives trading carries substantial risk of loss, including total loss of collateral, and products described may be unavailable or restricted in your jurisdiction. Always do your own research. Information is accurate as of July 28, 2026.
Myanmar’s combined Parliament approved the Anti-Online Scam Bill on July 28 after reconciling amendments adopted by its lower and upper chambers.
Summary
- 10-year-to-life terms cover crypto scams and scam-centre operations under Myanmar’s published May draft legislation text.
- Parliament approved the bill July 28 after reconciling amendments previously adopted by both legislative chambers.
- Final text, presidential assent and commencement date remain unconfirmed in publicly available official records online.
The legislation targets digital-currency fraud, online scam centres, forced scam labour and financial infrastructure used by fraud networks.
The state-run Global New Light of Myanmar reported that the Pyidaungsu Hluttaw approved the bill in full. However, the final amended text, a presidential assent notice and a commencement date were not publicly available as of July 29. The exact penalties therefore remain based on the May draft and comments from lawmakers who reviewed the final version.
What penalties does the Myanmar crypto scam bill contain?
The 63-section draft published in May proposed prison terms of 10 years to life for operating an online scam centre or committing “digital currency fraud.” It also covered recruitment, financial facilitation, telecommunications support and other conduct connected with organised online fraud.
For violence, torture, unlawful arrest, detention or cruel treatment used to force another person into scam work, the draft allowed life imprisonment or capital punishment. It required the death penalty when that conduct caused death. Lower House lawmaker Aye Chan told AFP that the final bill retained the death-penalty provision and said there were “not many significant changes” to its important sections.
Because the enacted wording has not been released, it is not yet possible to confirm whether every offence, sentencing range and exemption survived the parliamentary amendments unchanged.
The bill creates broad financial and data powers
The draft establishes a central committee, regional bodies and an Anti-Scam Centre. It authorises coordination with foreign governments and information sharing among banks, telecommunications providers and state agencies. It also provides procedures for freezing suspicious accounts and confiscating proceeds or equipment linked to scams.
Human Rights Myanmar criticised the proposal before passage, arguing that its surveillance, account-freezing and website-blocking powers could be used against journalists, civil society and political opponents. The group called the bill “a repressive security instrument.” That is an advocacy assessment rather than a finding by a court or independent regulator.
The organisation also questioned the use of capital punishment and the absence of independent oversight. Those concerns will remain difficult to assess fully until authorities publish the final law and any implementing rules.
Scam compounds remain active despite regional raids
The bill arrives as evidence shows Myanmar’s scam-centre industry remains active. Satellite analysis reviewed by Wired identified at least 25 suspected sites built or expanded around Myawaddy during the first half of 2026. The International Justice Mission said the construction suggested previous crackdowns had not stopped the networks.
A July United Nations Office on Drugs and Crime assessment said fraud groups were responding to raids by dispersing, relocating and using smaller operations. Separately, the U.S. Justice Department charged two Chinese nationals in April over an alleged cryptocurrency-investment fraud compound in Burma and announced the restraint of about $700 million in cryptocurrency alongside broader website seizures.
As crypto.news previously reported, U.S. authorities also seized a fraudulent investment domain operated from Burma’s Tai Chang compound. In related coverage, crypto.news reported that India opened an investigation into allegations that citizens were trafficked into Myanmar and forced to conduct crypto scams.
Promulgation and enforcement are the next steps
The immediate next step is publication of the final amended law. That should clarify whether presidential assent has occurred, when the rules begin, which agencies receive enforcement authority and whether transitional provisions apply.
Implementation will also require financial institutions and telecom companies to build reporting and information-sharing systems. International cooperation will be central because victims, workers, operators, payment routes and digital assets often cross several jurisdictions.
No verified crypto-market price reaction was directly attributable to the parliamentary vote. The practical test will be whether authorities pursue senior operators and financial networks, protect trafficking victims and apply the law with due-process safeguards rather than relying mainly on raids against workers.
Crypto is trading on a cautious note. The upswing in bitcoin, the leading digital asset by market value, has stalled since last Wednesday, with prices pulling back to just under $64,000 from the high of nearly $67,000.
July hike to end forward guidance
Citadel’s rate hike call is less about where the data land and more about tactics, specifically, why Warsh has more to gain from raising rates today than from waiting until September.
A surprise hike Wednesday, Frank Flight, head of macro strategy at Citadel Securities, writes, “would emphatically end the forward guidance era in which every policy move is pre-signaled and act as a cleansing event, forcing markets to price what the data imply the central bank should do rather than what they expect it will do.”
It would also “clearly underline Federal Reserve independence after two years in which it has been repeatedly questioned.”
Forward guidance is a tool central banks use to signal how they expect interest rates to evolve over the coming months, helping households and businesses adjust consumption, investment, and borrowing without sudden shocks.
Over time, however, forward guidance has, according to many, including Warsh, distorted the market’s reaction function to the point where assets began trading off expectations of how the Fed might respond to news and data, rather than on the underlying data itself.
Regulated Layer One, or RL1, began operations on July 28 as a Luxembourg-based European Cooperative Society owned by 10 financial institutions.
Summary
- Ten institutions launched RL1 as a Luxembourg cooperative for regulated tokenized markets and digital money.
- SWIAT’s production network processed more than 50 transactions worth over €700 million before RL1’s launch.
- NatWest is expected to join shortly, while KfW and L-Bank continue supporting network expansion efforts.
The founding group includes ABN AMRO, Cecabank, Chartered Investment, Crédit Mutuel Alliance Fédérale, DekaBank, DZ BANK, LBBW, Natixis CIB, SC Ventures and Seturion.
Former SWIAT managing director Henning Vollbehr will lead the cooperative. RL1 now owns the underlying distributed-ledger network, while SWIAT remains its software supplier and technical operator. The launch announcement did not include a new token, public investment product or regulatory approval for a specific security.
RL1 gives 10 institutions equal governance rights
RL1 says each founding member has an equal vote over network governance and development. The structure includes a general assembly, a supervisory board and an operational management board. The network is private and permissioned, although membership remains open to additional regulated financial-market participants.
The current RL1 participant page lists NatWest as “joining soon” and says the bank will enter in the coming weeks. That is a more concrete update than the launch release, which said discussions were underway. No formal accession date has been published. KfW and L-Bank are supporting the network’s expansion but are not among the 10 institutions named as founding cooperative members.
The site also identifies eight technical operators linked to the existing SWIAT network, including DekaBank, LBBW, SC Ventures and SWIAT. However, it states that migration of those validators to RL1 is still intended. The list should not be treated as confirmation that every operator has completed the transfer.
SWIAT gives RL1 an existing production record
RL1 is based on SWIAT’s production network, which operated for three years before ownership moved to the cooperative. The platform completed more than 50 transactions with a combined value above €700 million, according to the launch statement. Those figures refer to the inherited SWIAT network rather than activity completed by the newly established cooperative after July 28.
SWIAT’s applications, including German electronic securities registry services, remain with SWIAT. The company said those services can migrate to RL1 without changing the software layer. The separation leaves the cooperative owning the common network while SWIAT continues providing technology and operating services.
The arrangement is intended to reduce reliance on separate institutional ledgers that cannot easily exchange assets or settlement instructions. Whether RL1 achieves that goal will depend on additional members, interoperable applications and sustained transaction activity. This is an inference based on the cooperative’s stated objectives. RL1 has not published volume targets or a timetable for moving all existing SWIAT services.
RL1 targets bonds, collateral and digital money
The network is designed to support tokenized bonds, funds, real-world assets, collateral, repo transactions, securities lending and digital money. RL1 also lists stablecoins and commercial or central-bank money among potential settlement tools. These are proposed use cases, not confirmation that every product is already live.
A practical test is expected through KfW’s third blockchain bond. KfW issued the €100 million security in June and plans an autumn migration of its registrar and underlying ledger from Cashlink and Polygon to DekaBank and SWIAT/RL1. KfW also intends to use the Eurosystem’s Pontes infrastructure for later payments, although the migration and Pontes connection have not yet been completed.
ECB settlement plans could shape RL1 adoption
The European Central Bank plans to launch Pontes in the third quarter of 2026. Pontes will connect market DLT platforms with the Eurosystem’s TARGET Services so tokenized transactions can settle in central-bank money. The longer-term Appia program is expected to produce a blueprint for an integrated European tokenized financial ecosystem by 2028.
As crypto.news reported, the ECB views central-bank money as a necessary settlement anchor for tokenized securities, deposits and stablecoins. In related coverage, crypto.news reported that RL1 member Seturion is building blockchain settlement links with Société Générale and SG-FORGE.
RL1’s claim that it will become “the connecting infrastructure for Europe’s digital financial market” remains forward-looking. Its next measurable steps are NatWest’s formal admission, validator and application migrations, KfW’s autumn bond test and technical connectivity with Pontes. No deadlines have been announced for broader membership or commercial-scale transaction targets, and no verified market-price reaction followed the cooperative’s launch.
Decentralized perpetuals exchange Trade.xyz said it will reimburse traders liquidated when its SK Hynix perpetual futures contract crashed 19% late on Monday, a loss the company attributes to a single executed trade on a thin Korean pre-market venue rather than any failure in its systems.
The mark price, the reference figure used to calculate profits, losses and liquidations, fell from about $1,128 to $917 at 23:01 UTC on July 27, according to the company. The print came from an executed trade relayed by multiple independent data providers, and the data point feeding the contract was tracking what Trade.xyz called the primary Korean pre-market venue.
“The oracle system worked as intended according to its specification,” the company said. Nothing malfunctioned and nobody manipulated anything, on the evidence so far
The oracle, a tool that fetchs data from outside points to within a blockchain-based system, faithfully reported a real trade on a market thin enough that one order moved the price nearly a fifth, and the contract liquidated positions accordingly.
Trade.xyz said covering the losses is a one-time discretionary decision rather than a commitment to do so again, with eligibility rules to follow and payouts expected within days.
Uniswap founder Hayden Adams rejected claims on July 28 that the decentralized exchange’s newly activated v4 protocol fees reduce liquidity providers’ existing earnings.
Summary
- Uniswap governance activated v4 protocol fees across seven chains after 46.6 million UNI supported proposal.
- Liquidity providers retain existing pool fees while traders pay a separate protocol charge, Adams said.
- A 30-basis-point pool adds five basis points, making the protocol fee 14% of total fees.
He said critics had misunderstood how the charge is calculated after governance approved the change.
The response followed the execution of Proposal 100 on July 27. The vote received 46.6 million UNI in support and 1.27 million against, clearing the 40 million UNI quorum. It activated the fee-controller system on Ethereum, Arbitrum, Base, BNB Chain, Polygon, OP Mainnet and Robinhood Chain.
Uniswap v4 fees are additive under the new design
Adams used a pool charging traders 30 basis points as his example. Under the approved curve, LPs continue earning 30 basis points, while the protocol adds five basis points. Traders therefore pay a combined fee near 35 basis points. The protocol’s five-basis-point portion equals about 14% of that total, not 25% of the LP fee stream.
Uniswap v4’s published code supports that distinction. The Pool contract describes the total swap charge as the LP fee plus the protocol fee. It calculates the protocol amount separately and routes the remaining fee growth to liquidity providers. The exact charge varies because v4 supports hooks and dynamic pool fees.
In addition, the proposal created a V4FeePolicy contract to classify pools and calculate charges, alongside a V4FeeAdapter that applies governance rules and sends collected assets to TokenJar contracts. For ordinary static pools, the policy uses a curve tied to the LP fee. Aggregator-hook pools use separate fixed rates.
Not every participant accepted the design. Panoptic founder Guillaume Lambert argued during the governance discussion that taking 10% to 25% of fees could weaken LP returns and push capital toward competing automated market makers. He called for protocol charges to depend on whether LP positions were already profitable. That criticism treated the charge as a reduction to LP income, while Adams’ response focused on v4’s additive implementation.
Adams also criticised a rival Uniswap fork that routes all swap fees away from LPs and uses token emissions allocated through voting to compensate them. He did not name the protocol in the July 28 post. His comparison was separate from the technical question of how Uniswap v4 divides fees.
Uniswap says previous fees did not drive liquidity away
Uniswap Labs said earlier fee activations on v2 and v3 had not produced a broad liquidity exit. Its July 18 governance response said Ethereum’s 25 largest fee-enabled v3 pools retained 98.5% of their pre-activation liquidity in token terms. It also said protocol fees funded about 7.5 million UNI in burns since December.
Those figures came from Uniswap Labs and have not yet established how v4 providers will respond. V4 pools can use customised hooks, dynamic pricing and different strategies, so their economics are not identical to v3. Labs said governance could submit another proposal to adjust rates if the new charges were not well tolerated.
DefiLlama listed Uniswap’s combined total value locked at about $3.06 billion on July 29. The dashboard also showed $88.4 million in gross fees over 30 days and about $3.36 million in protocol revenue. Those totals cover multiple Uniswap versions and chains rather than only the newly activated v4 pools.
More v4 fee activation and monitoring comes next
Fees collected through the new system move into TokenJar contracts. Searchers can claim those assets by providing and burning UNI through the protocol’s Firepit mechanism. Fees generated on supported layer-2 networks are connected to burns on Ethereum mainnet.
As crypto.news previously reported, the broader UNIfication programme began with a 100 million UNI treasury burn and protocol-fee collection across v2 and v3 deployments. In related coverage, crypto.news examined how Robinhood Chain activity increased Uniswap’s fee base before the v4 vote.
The executed proposal covers the first group of v4 deployments. Its text says Celo, Soneium, World Chain, X Layer and Zora require a later proposal because Uniswap’s governance contract limits the number of executable actions in one vote. No filing date has been announced for that second vote.
The next measurable test will be whether affected pools retain liquidity and trading volume after the charges begin accumulating. Governance can change individual pool overrides, fee-family rules or the underlying policy contract. Adams’ post settles the intended fee arithmetic, but LP behaviour will determine whether the model remains competitive.
South Korea’s Financial Services Commission (FSC) is reportedly preparing to work with the ruling Democratic Party on a consolidated “Digital Asset Basic Act,” aiming to unify the country’s fragmented crypto and stablecoin rulemaking after months of legislative delays. The plan comes as multiple bills remain stuck in Parliament and key policy disagreements continue to stall progress on a second-stage regulatory framework.
Separately, lawmakers are also moving toward reviewing an opposition-backed proposal to repeal South Korea’s planned crypto income tax before it takes effect on Jan. 1, 2027. That effort, along with earlier petitions, adds to the uncertainty around how and whether the tax regime will ultimately be implemented.
Key takeaways
- The FSC intends to draft a consolidated Digital Asset Basic Act with the ruling Democratic Party, potentially replacing or coordinating today’s patchwork of crypto and stablecoin bills.
- At least 10 separate digital asset and stablecoin bills are currently pending, but disputes have prevented resolution of crucial details for the next phase of regulation.
- Major unresolved issues include whether won-denominated stablecoin issuers must be majority-owned by banks and whether ownership limits should apply to large crypto exchanges.
- An opposition proposal to eliminate the crypto income tax before its Jan. 1, 2027 deadline is expected to be considered by committee structures, though review dates are not yet set.
FSC signals a consolidated legal framework for crypto and stablecoins
According to an Edaily report published Wednesday, the FSC informed the National Assembly ahead of a policy briefing that it intends to pursue a consolidated bill jointly with the ruling Democratic Party. The move is designed to establish a government-backed core framework for negotiations across the digital asset sector, particularly stablecoin issuance and circulation.
If advanced, the consolidated proposal would reportedly cover a broad set of regulatory topics, including rules for digital asset businesses, requirements for exchange entry, disclosure obligations, internal controls, and standards tied to system resilience. By centralizing these elements, the FSC appears to be targeting a common complaint among market participants: overlapping and inconsistent requirements emerging from separate bills.
Right now, South Korea has multiple legislative tracks for crypto and stablecoins. The same Edaily report says 10 separate digital asset and stablecoin bills are already pending, and that disagreements have prevented the country from settling key components of its second-stage crypto legislation.
What remains disputed: stablecoin issuer structure and exchange ownership limits
Despite the FSC’s reported plan to draft a consolidated act, the timing and method for introducing the bill have not been finalized, and crucial policy fights remain unresolved.
As the Edaily report notes, one major point of contention involves won-denominated stablecoin issuers. Regulators and lawmakers appear to be split on whether those issuers should be majority owned by banks, a structure that would effectively tie stablecoin minting power to traditional banking oversight. Another dispute centers on whether ownership limits should apply to major crypto exchanges, an issue that could significantly shape how capital and corporate control are distributed across the ecosystem.
For investors and operators, these unresolved questions matter because they influence both compliance planning and competitive dynamics. Issuer ownership rules determine who can practically obtain approval and how quickly market actors can scale. Exchange ownership limits, meanwhile, can affect the flow of liquidity and the incentives around custody, trading venues, and market-making—areas that are often central to stablecoin usage patterns.
At present, the FSC has not set a clear timetable for when the consolidated bill will be formally introduced, leaving the market to watch for further legislative signals from the FSC and the ruling party.
Opposition targets crypto tax—review expected, but not scheduled
On the tax front, separate action is underway in the National Assembly. The Finance and Economic Planning Committee was scheduled to table an opposition bill on Wednesday that seeks to abolish South Korea’s crypto income tax before it begins on Jan. 1, 2027.
The income tax amendment was introduced on March 19 by People Power Party lawmaker Song Eon-seok, according to earlier coverage by Cointelegraph in connection with the proposal to scrap the crypto tax. The bill aims to remove the provision that taxes income from transferring or lending digital assets. After being tabled, it is expected to move to the committee’s tax subcommittee for detailed consideration, Edaily reported in a separate article: Edaily (May) coverage.
In parallel, a separate repeal petition backed by more than 50,000 people is also expected to be routed to a petitions subcommittee. However, according to the Edaily reporting cited in the original coverage, the relevant subcommittees have not yet been fully constituted, and no review dates have been announced.
Why the crypto tax debate is still live despite prior confirmation
From Jan. 1, 2027, the planned tax framework would apply to annual crypto income from transferring or lending above 2.5 million won (about $1,700), at a rate of 20% plus a 2% local income tax. Supporters of the regime—namely the government and the ruling Democratic Party—argue for implementing the tax as scheduled.
Opposition lawmakers, however, contend that taxing crypto income while many traditional stock investors remain exempt is inequitable. The broader dispute is therefore less about whether crypto should be taxed at all, and more about whether the tax treatment aligns with how other asset classes are treated under South Korea’s current tax code.
Earlier, South Korea’s Finance Ministry signaled that the crypto tax would proceed after repeated delays, which means the repeal bill could become one of the key tests of how quickly political disagreement translates into legislative change. Earlier coverage by Cointelegraph said the tax would go ahead following those delays.
For market participants, the practical question is whether committee-level review and possible revisions could still alter—or unwind—the January 2027 implementation timeline. With no review dates set for either the subcommittee handling the income tax repeal bill or the petitions process, the near-term path to a definitive outcome remains unclear.
As South Korea works on a consolidated stablecoin-and-crypto regulatory baseline while simultaneously debating the crypto tax’s future, the next signals to watch are the draft Digital Asset Basic Act’s scope and timing, and whether opposition efforts on tax repeal progress into committee decisions that could credibly challenge the existing plan for 2027.
South Korea’s Financial Services Commission (FSC) is reportedly preparing to consolidate fragmented crypto rules into a single, government-backed legislative package in coordination with the ruling Democratic Party, according to an Edaily report published Wednesday. The move comes after months of delays and renewed uncertainty over how stablecoins and the broader digital-asset market will be regulated under the country’s next phase of crypto legislation.
Separately, lawmakers are also set to consider an opposition proposal to repeal the planned crypto income tax before it takes effect in 2027—an effort that could become another flashpoint in South Korea’s evolving policy debate around digital assets.
Key takeaways
- The FSC reportedly plans to work with the ruling Democratic Party on a consolidated Digital Asset Basic Act covering stablecoins and wider market conduct.
- South Korea currently has multiple separate bills pending in Parliament, but unresolved disagreements have delayed progress on its second-stage crypto framework.
- Major outstanding disputes include whether won-denominated stablecoin issuers must be majority bank-owned and whether limits should apply to ownership of major crypto exchanges.
- An opposition bill aims to abolish South Korea’s planned crypto income tax prior to its Jan. 1, 2027 start, and is expected to move to committee review.
A consolidated Digital Asset Basic Act enters the policy lane
According to Edaily, the FSC told the National Assembly ahead of a policy briefing that it intends to introduce a single consolidated bill rather than continue advancing a patchwork of proposals. The rationale, as implied by the report, is to create one central framework that lawmakers can negotiate against—potentially reducing the gridlock created by overlapping and separate draft measures.
The proposed framework would reportedly address a broad set of issues that have become common regulatory themes in South Korea’s digital-asset discussions. Edaily reports that the consolidation would cover stablecoin issuance and circulation, rules for digital-asset businesses, exchange entry requirements, disclosure obligations, internal controls, and system-resilience standards.
At present, 10 separate digital asset and stablecoin bills are already pending in Parliament. The same Edaily reporting indicates disagreements have blocked progress on crucial components of South Korea’s second-stage crypto legislation—leaving stakeholders without a clear, unified rulebook.
Disputes that could determine the shape of stablecoin regulation
While the FSC has not finalized timing or the exact form of how the consolidated bill will be introduced, Edaily points to specific disagreements that remain unresolved. Two issues stand out as likely to shape the final outcome.
First, the debate over whether won-denominated stablecoin issuers should be majority owned by banks remains unsettled. That question has direct implications for how stablecoin risk and reserve oversight would be structured, and whether issuance would effectively be channeled through institutions already embedded in South Korea’s financial system.
Second, lawmakers are also divided on whether ownership limits should apply to major crypto exchanges. That dispute matters for market concentration and conflicts of interest—particularly if exchange-linked entities can influence the stablecoin ecosystem or market access rules.
Because these decisions are described as unresolved, the consolidated approach may not immediately resolve uncertainty for market participants. Instead, it could shift negotiations from parallel bills into a single legislative vehicle—making the eventual compromises more visible, but not necessarily faster.
Opposition seeks to scrap the crypto income tax before it starts
While stablecoin and exchange regulation appears to be moving toward consolidation, South Korea’s tax policy is also entering a new round of legislative scrutiny. Separately, Edaily reported that the National Assembly’s Finance and Economic Planning Committee was scheduled to table an opposition bill on Wednesday aimed at abolishing South Korea’s crypto income tax before its planned Jan. 1, 2027 implementation.
The Income Tax Act amendment was introduced on March 19 by People Power Party lawmaker Song Eon-seok, according to earlier coverage from Cointelegraph. The proposal seeks to delete a provision that would tax income derived from transferring or lending digital assets. After being tabled, Edaily reports that the bill is expected to be sent to the committee’s tax subcommittee for detailed consideration.
In parallel, a separate repeal petition backed by more than 50,000 people is expected to go before a petitions subcommittee, though Edaily notes that neither subcommittee has been fully constituted and no review dates have been set.
What the tax schedule says—and why the repeal fight matters
The planned taxation framework starts on Jan. 1, 2027. As described in the source reporting, income from transferring or lending crypto exceeding 2.5 million won (about $1,700) annually is set to face a 20% income tax plus a 2% local income tax.
Support for implementing the tax has been attributed to the government and the ruling Democratic Party, while the opposition’s position is that taxing crypto income while most ordinary stock investors remain exempt is unfair. In May, the Finance Ministry indicated the tax would proceed after repeated delays, as noted in Cointelegraph coverage, underscoring that the issue is not simply theoretical—it is tied to a concrete start date.
From an investor and market-structure standpoint, the repeal effort is significant because tax rules can influence participation patterns, custody and lending behavior, and how users route activity between exchanges and other venues. It can also affect how issuers and intermediaries plan compliance and reporting, especially when rules are introduced in advance of a hard start date.
What to watch next in South Korea’s crypto policy churn
For now, the most immediate developments are legislative: whether the FSC’s consolidated Digital Asset Basic Act framework moves from briefing to formal proposal, and how the opposition’s tax repeal bill progresses through the committee process. Readers should watch how the unresolved stablecoin disputes—bank-ownership requirements for won-denominated issuers and any exchange ownership limits—are ultimately translated into a single bill, while also tracking whether the crypto tax debate stays on course for 2027 or gains enough momentum to change its trajectory.
South Korea’s Financial Services Commission told the National Assembly ahead of a July 29 policy briefing that it plans to prepare a consolidated Digital Asset Basic Act with the ruling Democratic Party.
Summary
- 10 pending digital asset bills could be folded into a government-ruling party proposal this year.
- 22% crypto tax remains scheduled for January 2027 despite the opposition’s repeal bill and petition.
- 2.5 million won annual exemption would apply before South Korea taxes qualifying digital asset income.
The proposed framework would cover stablecoins, exchanges, disclosures, internal controls and system resilience.
Separately, the National Assembly’s Finance and Economic Planning Committee was scheduled to table an opposition amendment seeking to remove the crypto income tax before its Jan. 1, 2027 start date. Neither proposal has changed current law.
South Korea stablecoin bill would unify 10 proposals
The FSC’s planned bill would establish rules for stablecoin issuance and circulation, define digital asset businesses and regulate their conduct. It would also set exchange entry standards, disclosure requirements and controls intended to protect users and maintain reliable trading systems.
Ten digital asset and stablecoin bills are already pending in the National Assembly. The FSC now plans to coordinate a single government-ruling party proposal that could serve as the main text for negotiations. Chairman Lee Eog-weon previously told the government that digital asset legislation should be completed during 2026, including stronger anti-money-laundering rules for stablecoins.
The plan follows South Korea’s broader effort to create a full digital asset framework. The current Virtual Asset User Protection Act mainly addresses custody, unfair trading and user safeguards. The proposed second-stage law would regulate issuers, service providers and market structure more broadly.
Issuer ownership and exchange limits remain unresolved
The FSC has not completed the bill’s wording or announced a filing date. One central dispute is whether issuers of won-backed stablecoins must be controlled by bank-led consortiums holding at least 50% plus one share. The regulator has repeatedly said that issuer ownership rules have not been finalised.
The Bank of Korea supports giving banks a leading role, arguing that stablecoins could affect monetary and financial stability. In related coverage, crypto.news reported that the central bank also favours a statutory body involving several authorities. Industry participants and some lawmakers support allowing qualified non-bank issuers under licensing and reserve requirements.
Lawmakers must also decide whether ownership caps should apply to major exchanges. The FSC’s Virtual Asset Committee discussed bank-led issuance, ownership dispersion, exchange internal controls, computer-security standards and no-fault compensation in March, but the regulator did not settle those provisions.
Opposition moves to repeal the 22% crypto tax
People Power Party lawmaker Song Eon-seok introduced bill number 2217609 on March 19. It would delete the Income Tax Act provision covering income from transferring or lending digital assets. As crypto.news previously reported, the opposition argues that taxing ordinary crypto investors while most retail stock gains remain exempt is unfair.
Under current law, annual crypto income above 2.5 million won will face a 20% national tax and a 2% local income tax from Jan. 1, 2027. The tax has already been postponed three times since its original 2022 start date.
The government and ruling party support implementation. Tax officials have said the National Tax Service is preparing guidance and has established a dedicated digital asset unit. A separate repeal petition supported by more than 50,000 people is also awaiting committee review.
What happens next for both proposals?
The FSC must complete consultations with the ruling party and other authorities before submitting its consolidated bill. The 10 existing proposals would then be reviewed alongside the new text, with unresolved stablecoin ownership and exchange-shareholding rules likely to shape negotiations.
The tax repeal amendment is expected to move to the Finance and Economic Planning Committee’s tax subcommittee. The public petition would go to a separate petitions subcommittee. Neither panel had been fully constituted when the July 29 meeting was announced, and no review dates were available.
Unless lawmakers approve a repeal or another delay, the 22% tax will take effect on Jan. 1, 2027. No verified crypto-market price movement has been directly linked to the two legislative developments.
SpaceX (SPCX) stock has fallen about 29% over the past month and now trades below its initial public offering price of $135. Yet, Jim Cramer told viewers to hold off buying for now.
One key factor sits behind that call. Roughly 911.5 million shares become eligible for sale on August 6, and Cramer expects the supply to drag the price lower.
SPCX Sinks to New Lows, but Cramer Says Wait for Thursday’s Unlock
SPCX fell to $107.01 on Tuesday, its lowest level since the IPO. The stock then recovered to close at $116.41, up 2.56%. It now sits roughly 48% below its June 16 high of $225.64.
Follow us on X to get the latest news as it happens
Yet, Cramer expects further downside. This is because the number of Nasdaq shares available for trading will rise sharply next week. Around 911.5 million shares will become eligible for sale next Thursday. That will more than double SpaceX’s public float.
“If you’re looking to buy SpaceX … I’m begging you if you want to go big to at least wait for the first wave of the lockup on insider selling to expire next Thursday and let it drag the share price lower before you pull the trigger,” he said.
Despite his long-term bullish view on Musk and SpaceX, Cramer cautioned that the company’s August 4 earnings report and the August 6 lockup expiration could drive further weakness in the stock.
“Even if they report a great quarter on Tuesday, I don’t know if it can withstand the lockup expiration on Thursday,” he added.
SpaceX reports after Tuesday’s close, its first set of numbers as a listed company. Cramer said investors will closely watch its AI business, which has been boosted by multibillion-dollar computing deals with Anthropic and Alphabet.
However, he noted the contracts can be terminated with 90 days’ notice, making “new revenue stream very tough to model.” He also questioned expectations for similar deals, warning that there “aren’t many other companies with such deep pockets.”
Cramer said both issues leave Wall Street’s multi-year earnings estimates hard to trust.
Subscribe to our YouTube channel to watch leaders and journalists provide expert insights
The post SpaceX Stock Hits New Low but Jim Cramer Says Do Not Buy Yet appeared first on BeInCrypto.
Hayden Adams said critics misunderstood Uniswap’s newly approved v4 protocol fees, rejecting claims the change reduces liquidity providers’ earnings.
Kiniksa Pharmaceuticals Shares Surge 21% on Strong ARCALYST Sales and Raised 2026 Guidance
Myanmar crypto scam bill clears parliament
Sam Altman is ready to decelerate
-
Fashion5 days agoWeekend Open Thread: Brooks Brothers
-
Sports2 days agoCommonwealth Games boxing: Jadumani Singh seals dominant 5-0 win over Pakistan’s Sumama Rehman to enter quarter-finals | Commonwealth Games News
-
Tech2 days agoIntel is reversing course and bringing hyper-threading back to its server chips
-
Crypto World6 days agoEthics, other provisions in crypto Clarity Act to be further discussed
-
Politics2 days agoLuke Littler dismantles Gerwyn Price to retain title in Blackpool
-
Sports5 days ago2026 3M Open leaderboard: Scottie Scheffler finds putter in Round 1, sits three back
-
Politics21 hours agoThe Part of the Electric Transition Nobody Wants to Discuss
-
Entertainment5 days agoA New Post-Apocalyptic Gundam Anime Series Blasts Into SDCC
-
Fashion5 days ago16 Dresses for the High Summer Event
-
News Videos2 days agoBITCOIN JUST ENTERED THIS CRITICAL ZONE…
-
News Videos5 days agoThe Peugeot Family: How 200 Years of an “Old Money” Dynasty Died in A Boardroom
-
Politics3 days agoSpain sweeps the board at 2026 World Cup with individual awards
-
Crypto World3 days agoRipple bought a bank in pieces. The $4 billion audit
-
Business1 hour agoMajor shareholder moves on Canyon
-
Crypto World3 days agoXRP Ledger adds $2.6B as RWA inflows rank second
-
Crypto World6 days agoUniswap (UNI) pushes deeper into tokenized RWAs with permissioned trading pools
-
Tech4 days agoAnthropic launches Claude Opus 5, a cheaper AI model for coding, agents and enterprise workflows
-
Entertainment11 hours ago‘Stargate’ Creator’s New Sci-Fi Series Returns for Season 3 Tomorrow
-
Crypto World6 days ago
SEC Agrees to Overhaul Recordkeeping After Settling Coinbase Lawsuit Over Gensler’s Lost Texts
-
Business5 days agoAlliance Entertainment Holding Corporation (AENT) Discusses Evolution Into Omnichannel Distribution and Fulfillment Platform for Media and Collectibles Transcript
You must be logged in to post a comment Login