Institutional investors are increasingly exposed to Bitcoin and other major tokens are traded through ETFs and centralized exchanges.
However, panelists told Consensus Miami that they are largely staying away from decentralized exchanges (DEXs) offering perpetual (perp) futures related to cryptocurrencies and tradfi assets, citing security risks and a mismatch between DeFi’s permissionless design and institutional identity and compliance requirements.
The session titled “Perp DEX Explosion: Bullish Volume and Bear Resilience” was moderated by veteran trader and family office manager Wizard of SoHo; Michaël van de Poppe, founder and CIO of MN Fund and MN Capital; and Michael Anderson of Canary Labs. Jason Atkins, chief commercial officer at liquidity provider Auros, moderated the discussion.
The discussion focused on permanent decentralized exchanges and how they can attract institutional capital and scale.
Wizard of SoHo said that due to recurring security/exploitation risks highlighted by the recent multi-million dollar hack of Drift, institutions are unlikely to easily switch to Perp DEX, and the next major competitive battleground for all Perp DEX will be whether any of them can safely absorb institutional capital.
“How do you convince the big institutional players to continue Perp development? I think that’s going to be the biggest challenge, especially given the vulnerabilities on Drift. And, you know, we’ve had a lot of vulnerabilities lately,” he said.
Canary Labs’ Anderson is wary of decentralized finance, saying that while parts of the ecosystem have been explored, he’s reluctant to use it.
“I’m scared to use DeFi right now,” he said. “It does feel like a bit of a minefield where you’re waiting every day for the next headline.”
Anderson added that while activity has picked up in some regions, particularly in Asia as centralized exchanges tighten KYC enforcement, the overall environment remains risky.
“Right now, it feels a little dangerous on the product side,” he said.
Anderson believes that risk perception makes it difficult for large institutional players to adopt 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 on an institutional level compared to some of the centralized exchanges,” he said.
Anderson also pointed to the product innovation gap 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 keep up with this pace of development.
KYC (Know Your Customer Verification) is another key point of disagreement. DeFi is built around open, permissionless participation, where users can interact without formal identity checks or traditional onboarding requirements.
In contrast, institutions operate under strict regulatory obligations and must meet full KYC and compliance standards, making this permissionless model difficult to adopt at scale.
“Cryptocurrencies want to become more non-KYC,” he said, “but bring in institutions [players] At larger scale, you need some form of KYC. “
The discussion also expanded into related topics shaping market structure, including the rise of AI-powered trading tools and the dominance of Hyperliquid.
According to Michaël van de Poppe, AI agents are actually an evolution of algorithmic trading, rather than an entirely new concept.
“To be honest, I think AI agents are just the next level of algorithmic trading anyway, so the execution is just a little different,” he said. Responding to the moderator’s point about reduced human control in automated systems, he acknowledged the shift in supervision but argued that this direction was inevitable.
“Yes, there are some risks, but I think ultimately, we will no longer be trading ourselves. Nothing will be manual,” he said. “AI agents will do it for us, and they’ll probably do it better.”
The technology is still in its early stages and highly dependent on how it is deployed, van de Poppe added.
“If you start using these AI protocols or LL.M.s and you don’t put in the right context or framework, then that’s going to make you a bad trader,” he said. “So if you’re not a good trader, it’s not going to build anything for you.”