Institutional investors have increasingly gained exposure to bitcoin and other major tokens through ETFs and centralized exchanges.
However, they have largely stayed away from decentralized exchanges (DEXs) that offer perpetual (perp) futures tied to crypto and tradfi assets, panelists at Consensus Miami said, citing security risks and a mismatch between DeFi’s permissionless design and institutional identity and compliance requirements.
The session titled “Perp DEX Explosion: Bullish Volumes & Bear Market Resilience” featured Wizard of SoHo, a veteran trader and family office manager; Michaël van de Poppe, founder and CIO of MN Fund & MN Capital; and Michael Anderson of Canary Labs. Jason Atkins, chief commercial officer at liquidity provider Auros, moderated the discussion.
The discussion focused on ever-focused decentralized exchanges and what it would take for them to attract institutional capital and scale up.
Wizard of SoHo said that institutions are unlikely to readily enter perp DEXs due to recurring security/exploitation risks highlighted by the recent multi-million-dollar hack of Drift, and that the next major competitive battleground for all perp DEXs will be whether any of them can safely onboard institutional capital.
“How do you convince the big institutional players to go after perp developers? I think that’s going to be the biggest challenge, especially given the leverage on Drift. And you know, we’ve had a lot of holdings lately,” he said.
Canary Labs’ Anderson struck a cautious note on decentralized finance, saying he is reluctant to use it despite exploring parts of the ecosystem.
“I’m scared to use DeFi right now,” he said. “It feels like a bit of a minefield and you’re just waiting for the next headline every 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 a little dangerous on the product side,” he said.
Anderson argued that the perception of risk makes it difficult to see large institutional players adopting decentralized exchanges at scale, especially compared to centralized platforms.
“I think it’s going to be very difficult for some of the larger companies to use it at the institutional level, versus some of the centralized exchanges,” he said.
Anderson also pointed to product innovation gaps as another limitation, 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 important point of divergence. DeFi is built around open, permissionless participation, where users can interact without formal identity checks or traditional onboarding requirements.
Institutions, on the other hand, operate under strict regulatory obligations and must meet full KYC and compliance standards, making the permissionless model difficult to adopt at scale.
“Crypto wants to be more non-KYC,” he said, “but to create institutional [players] you have to have some form of KYC in the larger size.”
The discussion also extended to adjacent themes shaping the market structure, including the rise of AI-powered trading tools and the dominance of Hyperliquid.
Michaël van de Poppe said that AI agents are really an evolution of algorithmic trading rather than a fundamentally new concept.
“To be honest, I think AI agents are just the next level of algorithmic trading anyway, so it’s just a slightly 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 that direction is inevitable.
“Yes, there are some risks, but I think that at the end of the day, we will not act ourselves anymore. Nothing will be manual,” he said. “AI agents will do it for us, and they’re probably better.”
van de Poppe added that the technology is still early and highly dependent on how it is implemented.
“If you start using these AI protocols or LLMs and you don’t put the right context or framework in, it’s going to build you a bad dealer,” he said. “So if you’re not a good negotiator, it’s not going to build anything for you.”
