Data & Insights: Funding, Futures, DEX Volume Are All Down

Future(s)-Proof

• Total futures volume across major exchanges hit a 12-month low in May, closing the month at approximately $2.9 trillion, a level not seen since late 2023 and well below the $6-7 trillion monthly peaks recorded during last year's more active trading periods. 
  • The decline reflects a broader pullback in speculative activity across crypto markets, with spot volumes and on-chain activity similarly subdued heading into the summer.
• The composition of that volume remains heavily concentrated among a handful of exchanges, with Binance maintaining its dominant share, followed by OKX, Bybit, and Gate. Smaller venues have seen the most pronounced erosion in activity as traders consolidate onto deeper liquidity pools during quieter periods.
• Against this backdrop, the CFTC moved to formally open the door for crypto perpetual futures contracts in the US, a structurally significant development for a derivatives product that has until now existed largely outside the reach of US regulation.
• Perpetual futures differ meaningfully from traditional futures instruments: they carry no expiry date, eliminating rollover costs and calendar risk. Funding rates, paid periodically between longs and shorts, continuously anchor the contract price to spot, functioning as a real-time gauge of market sentiment and leverage positioning. Combined with capital efficiency advantages over margin accounts, perps have become the dominant trading vehicle in crypto derivatives globally.
  • The regulatory opening matters less for access, as a meaningful share of US-based traders already route through offshore exchanges via VPNs, and more for what legitimized domestic perp markets could unlock via institutional participation, cleaner compliance infrastructure, and onshore liquidity that does not require regulatory arbitrage.
• Whether this translates into a volume recovery remains the open question. Demand exists and the structural case for perps is well established. The more relevant variable is whether regulated US venues can compete on the margin and liquidity terms that offshore exchanges currently offer.

Find Funding

• Monthly venture deal count in crypto has fallen to roughly 50 deals in May, a level last seen in the pre-2021 era when the industry was a fraction of its current size. The compression is visible across nearly every category in the chart, with Infrastructure and Crypto Financial Services, historically the two most active buckets, both tracking near multi-year lows.
  • The decline reflects a combination of factors. Investor attention has broadly shifted toward AI, pulling capital and mindshare away from crypto venture at a structural level. Simultaneously, the crypto space has struggled to surface the volume of compelling early-stage opportunities that characterized the 2021 and 2024 cycles.
• Deal count tells one part of the story while dollar volume tells another. Despite the slowdown in deal activity, funding totals have remained somewhat elevated relative to what the deal count alone would suggest. Kalshi's $1 billion raise earlier this month is a recent example of how capital concentration is playing out: fewer deals, but larger checks when a category-defining company emerges.
  • This dynamic points to a market that is consolidating rather than contracting uniformly. Generalist crypto VCs are becoming more selective, while the projects that do attract conviction are commanding outsized rounds.
• For builders, the current environment carries an underappreciated upside. With deal count at pre-cycle lows, the competitive noise that characterized prior boom periods is largely absent. Projects that can demonstrate clear utility and traction are operating with less crowding than at any point in recent years.
• Whether deal activity rebounds in the second half of 2026 will depend in part on whether new verticals, beyond prediction markets and financial infrastructure, can generate the kind of investor conviction that drives a broader funding recovery.

Star Spangled Betting

• Polymarket US has posted all-time highs across volume, trade count, and fees in the month of May, just seven months after launch.
  • Polymarket US collected a record $11.8 million in May, up over 36% MoM.
  • Meanwhile, the number of trades on the platform grew five times faster than volume, compressing the average trade size to $202.
  • In comparison, the average trade size on Polymarket US was over $240 last month.
  • This isn’t necessarily a bad thing either, as it could be a signal that the platform has entered its mass retail penetration phase
  • It is worth noting that Polymarket US is still restricted to sports markets only.
  • Hence, it makes sense that the platform’s current trading cohort is smaller, higher-frequency tickets that mirror sports-betting unit economics rather than traditional crypto-speculator economics
  • It also implies different defensibility, as sports-heavy markets rely on retention from frequency and rewards programs rather than from deep liquidity.
• The main factor to watch for Polymarket US in the near future is when they decide to expand their markets.
  • Polymarket US operates under a CFTC-registered DCM framework, therefore any expansion into crypto-price contracts, election rerun markets, or novelty categories requires additional approvals, and approval cadence is the current structural ceiling on the platform’s total addressable market.

Hyper Dominance

• Hyperliquid's share of monthly perpetual volume against all centralized exchanges reached 6.63% in May, its highest-ever point
  • Against Binance specifically, the ratio reached a record high of 14.4%
  • HIP-3, Hyperliquid’s builder-deployed perpetual framework, has been the engine behind this growth, posting over $62 billion in volume in May alone and $3B in open interest at the time of writing.
• Over the past month or two, Binance has launched their own equity and pre-IPO perps on their platform, disclosing $280 million in cumulative volume across its pre-IPO perpetuals in their first five days.
  • Against that, HIP-3 printing over ~$62 billion in May shows that their lead in the category is wide enough that Binance's entry has not yet affected them meaningfully.
• Amidst all the bullish headlines on HIP-3, it is worth noting that Hyperliquid's pure crypto volumes are down significantly YoY, as is the case with other exchanges due to the broader crypto market downturn.
  • This is still fine for the bullish case on HYPE as HIP-3 fees flow through to the protocol anyway, but it means the binary risk concentration is on tokenized-equity flow rather than on crypto market structure
  • If Binance's equity perps were to achieve significant adoption, which is highly possible considering its large existing user base, in addition to their addition of spot tokenized shares onto the platform via a partnership with Nest Trading and Alpaca, then Hyperliquid's category lead could compress faster than its crypto-native business can backstop.
• With Hyperliquid and HIP-3 now blessed on the regulatory side via the SEC’s innovation exemption, the durability question is now on whether trade.xyz can hold its >90% builder share as new entrants spin up under the same framework, and whether Hyperliquid's asset breadth advantage over Binance widens or narrows.

Onchain Wasteland

• Monthly DEX spot volume fell to ~$111 billion in May, the lowest monthly reading since September 2024
  • This figure has now declined for seven consecutive months since its October 2025 peak.
  • A 75% peak-to-trough decline in seven months is also the second-steepest DEX volume drawdown on record, exceeded only by the 2022 post-Luna collapse.
  • The decline is primarily a memecoin story, as the global memecoin market cap fell over 60% over the past year.
  • Pump.fun, Solana’s primary token launchpad, has seen trading volumes cut nearly in half
  • Meanwhile, the Solana DEX cluster of Raydium, Meteora, Orca, PumpSwap saw $16.5 billion combined in May, less than half of Uniswap alone.
• Liquidity provider (LP)  economics have also likely deteriorated in parallel with volume.
  • With aggregate DEX volumes down 75% from peak, fee yield on AMM TVL has compressed, and LPs would much rather allocate capital toward T-bills or on-chain yield products.
  • In late April, Pump.fun also  reversed its policy of using all protocol revenue for PUMP buybacks and burns, and resumed converting fees from SOL to stablecoins, adding direct sell pressure to SOL and confirming the operator-side view that memecoin TAM has structurally contracted
• Stablecoin supply expansion has historically led to DEX volume recovery by 1–2 months.
  • In our newsletter coverage two weeks ago, we mentioned how total stablecoin supply has stagnated considerably over the last several months.
  • With this in mind, until aggregate stablecoin float resumes meaningful growth, the base case for DEX volumes is continued contraction.
  • The structural read is that on-chain speculation has been and continues to rotate from DEX spot toward either Hyperliquid perps (including HIP-3) and prediction markets.