How to Build Your Own On-Chain Perpetual DEX Like Susa?

On-chain perpetual decentralized exchanges (DEXes) are quickly gaining traction in the DeFi space, transforming the way traders engage with financial markets. These platforms allow users to trade perpetual futures contracts directly on the blockchain, ensuring transparency, security, and decentralization. With the global decentralized exchange market surpassing $3.25 trillion in trading volume as of early 2025, it’s clear that the demand for transparent, decentralized trading solutions is surging. The concept of perpetual contracts, which have no expiration date, has attracted traders looking to capitalize on long-term price movements, providing an attractive alternative to traditional financial systems.

The rise of perpetual DEXes marks a significant shift towards decentralized finance, where trading is done without intermediaries. These platforms offer several advantages over traditional exchanges, including greater liquidity, lower fees, and reduced risk of centralization. The success of platforms like Susa, which leverages Layer N technology for scalability and speed, highlights the potential for decentralized trading solutions to disrupt the financial sector. As perpetual DEXes continue to grow in popularity, they are expected to become key players in the future of trading, combining the best of blockchain technology with advanced financial instruments.

Understanding the Mechanics of On-Chain Perpetual DEXes

How On-Chain Perpetual DEXes Operate: A Basic Overview

On-chain perpetual decentralized exchanges (DEXes) are blockchain-based platforms that facilitate the trading of perpetual contracts financial instruments allowing traders to speculate on asset price movements without an expiration date. These platforms operate entirely on the blockchain, utilizing smart contracts to automate trading processes, ensuring transparency, security, and decentralization. citeturn0search4

Key operational features include:

• Smart Contracts: Automate trade execution, settlement, and margin calculations, eliminating the need for intermediaries.
  
• Automated Market Makers (AMMs): Utilize liquidity pools instead of traditional order books, enabling continuous trading without relying on centralized liquidity providers.
  
• Funding Mechanisms: Implement periodic funding rates to align the perpetual contract prices with the underlying asset’s spot price, maintaining market equilibrium. citeturn0search5
  

Core Differences Between Traditional DEXes and Perpetual DEXes

While both traditional and perpetual DEXes operate on decentralized networks, they differ significantly in their trading mechanisms and offerings.

• Trading Instruments: Traditional DEXes primarily facilitate spot trading, where assets are exchanged immediately at current market prices. In contrast, perpetual DEXes offer perpetual contracts, allowing traders to speculate on price movements without a set settlement date.
• Liquidity Provision: Perpetual DEXes often employ AMMs with liquidity pools, enabling continuous trading and liquidity without relying on order books. Traditional DEXes may use order book systems, matching buy and sell orders from users.
• Leverage and Margin Trading: Perpetual DEXes typically offer leverage, allowing traders to control larger positions with a smaller initial investment. Traditional DEXes may have limitations in this regard.
  

Key Components That Power Perpetual DEX Trading

Several essential components underpin the functionality of perpetual DEXes:

• Price Oracles: Provide reliable and tamper-proof price feeds from external sources, ensuring accurate valuation of assets and proper settlement of contracts.
• Liquidity Pools: Allow users to pool their assets, providing liquidity for trades and earning fees in return. This system supports the AMM model, facilitating efficient and decentralized trading.
• Margin Accounts: Enable traders to borrow funds to increase their trading position size, with the borrowed amount secured by collateral. Proper margin management is crucial to avoid liquidations.
• Insurance Funds: Act as a safety net to cover potential losses from liquidations that cannot be fully covered by the margin, maintaining platform stability and protecting users.

The Building Blocks of Your Perpetual DEX: The Technical Foundation

Developing a perpetual decentralized exchange (DEX) involves integrating several key technical components to ensure a seamless and secure trading experience. Let’s delve into these foundational elements:

Smart Contracts: The Heart of Perpetual Trading

Smart contracts are self-executing agreements with the terms directly written into code, operating on the blockchain. They automate processes such as trade execution, settlement, and margin calculations, eliminating the need for intermediaries and reducing the risk of human error. By leveraging smart contracts, perpetual DEXs can offer trustless and transparent trading environments, where all transactions are recorded on the blockchain, ensuring accountability and security.

Automated Market Makers (AMM): Designing a Liquidity-Powered Exchange

AMMs are protocols that facilitate automated trading of digital assets by utilizing liquidity pools instead of traditional order books. This design allows users to trade directly against the liquidity pool, ensuring continuous liquidity and efficient price discovery. In the context of perpetual DEXs, AMMs enable traders to enter and exit positions without relying on centralized liquidity providers, thus enhancing decentralization and reducing potential points of failure. For instance, platforms like Uniswap have popularized the use of AMMs, allowing users to trade assets seamlessly without the need for an order book system.

Oracle Integration: Ensuring Accurate and Real-Time Price Feeds

Oracles serve as bridges between the blockchain and external data sources, providing smart contracts with real-world information such as asset prices, weather data, or sports scores. In the realm of perpetual DEXs, accurate and timely price feeds are crucial for determining contract values and triggering liquidations. Integrating reliable oracles ensures that the smart contracts have access to trustworthy data, maintaining the integrity and functionality of the trading platform. It’s important to note that relying on a single data source can introduce vulnerabilities; thus, utilizing decentralized oracles that aggregate data from multiple sources can enhance reliability and mitigate risks associated with data manipulation.

Liquidity Management for Perpetual DEXes: How to Attract and Maintain Liquidity

Ensuring robust liquidity is essential for the success of perpetual decentralized exchanges (DEXes). High liquidity enhances trading efficiency, reduces slippage, and attracts a broader user base. Let’s explore effective strategies to bolster liquidity in your perpetual DEX.

The Importance of Liquidity in Perpetual Trading

Liquidity serves as the lifeblood of any trading platform, especially in the realm of perpetual contracts. Here’s why liquidity is paramount:

• Smooth Trade Execution: High liquidity ensures that traders can execute large orders without significantly impacting the market price, leading to a seamless trading experience.
• Reduced Slippage: With ample liquidity, the difference between the expected price and the executed price narrows, minimizing slippage and ensuring fair trade execution.
• Attraction of Traders: Traders are drawn to platforms where they can swiftly enter and exit positions, making liquidity a key factor in user acquisition and retention.
  

Liquidity Pools vs. Order Book Models: Which to Choose?

When designing your DEX, choosing the right liquidity model is crucial. Let’s compare the two primary models:

• Liquidity Pools (Automated Market Makers – AMMs):
  • How They Work: Users contribute assets to liquidity pools, enabling the platform to facilitate trades directly from these pools.
  • Advantages:
    • Continuous Liquidity: Trades occur directly against the liquidity pool, ensuring uninterrupted trading opportunities.
    • Simplicity: AMMs operate on straightforward algorithms, making them user-friendly and transparent.
  • Considerations:
    • Impermanent Loss: Liquidity providers may experience temporary losses if the market price diverges significantly from the price at the time of deposit.
    • Capital Efficiency: AMMs might require substantial capital to maintain deep liquidity across various trading pairs.
  • Platforms like Uniswap and SushiSwap utilize AMM-based liquidity pools, allowing users to trade assets seamlessly without relying on order books.
• Order Book Models:
  • How They Work: Traders place buy and sell orders on an order book, and transactions occur when matching orders are found.
  • Advantages:
    • Price Transparency: Order books provide clear visibility of market depth and pricing, aiding traders in making informed decisions.
    • Reduced Slippage: Large orders can be executed at desired prices if sufficient liquidity exists at those levels.
  • Considerations:
    • Dependence on Market Makers: Maintaining liquidity requires active participation from market makers, which can be unpredictable.
    • Potential for High Fees: Managing an order book system can incur higher operational costs, potentially leading to increased fees for users.
  • Some DEXs, like dYdX, employ order book models, offering features like margin trading and advanced order types.
    

Incentivizing Liquidity Providers: Rewards, Fees, and Staking Mechanisms

Attracting and retaining liquidity providers (LPs) is vital for ensuring sustained liquidity. Consider implementing the following incentives:

• Trading Fees:
  • How They Work: LPs earn a portion of the fees generated from trades proportional to their share of the liquidity pool.
  • Benefits:
    • Passive Income: LPs receive continuous earnings as long as they maintain their liquidity provision.
    • Alignment with Platform Growth: As trading volume increases, LPs benefit from higher fee earnings, motivating them to keep their assets invested.
• Additional Incentives:
  • Yield Farming: Offer LPs additional rewards, such as native tokens, for providing liquidity, enhancing the attractiveness of participation.
  • Staking Mechanisms: Allow LPs to stake their liquidity provider tokens in exchange for extra rewards, further increasing their potential returns.
• Tiered Reward Structures: Implement reward systems where LPs receive benefits based on the duration and amount of their liquidity provision, encouraging long-term commitment.

Creating a Secure and Scalable Perpetual DEX: Overcoming Common Challenges

Developing a perpetual decentralized exchange (DEX) that is both secure and scalable is no small feat. It requires a deep understanding of blockchain technology, a commitment to best practices, and a proactive approach to emerging challenges. Let’s break down the key areas to focus on:

Security First: Best Practices for Protecting User Funds and Preventing Hacks

Ensuring the security of user funds is paramount. Here’s how you can bolster your DEX’s security:

• Smart Contract Security: Your DEX’s operations hinge on smart contracts. Ensure they’re free from vulnerabilities by:
  • Code Quality Assurance: Implement rigorous code reviews and testing protocols to identify and fix potential weaknesses.
  • Regular Audits: Schedule consistent audits with reputable security firms to assess and enhance contract security.
• User Authentication Measures: Protect user accounts with robust authentication methods:
  • Two-Factor Authentication (2FA): Require users to provide two forms of verification, adding an extra layer of security.
  • Secure Wallet Storage: Encourage users to store their private keys securely, preferably offline, to prevent unauthorized access.
• Continuous Monitoring: Stay vigilant against emerging threats by:
  • Real-Time Surveillance: Monitor transactions and activities for suspicious behavior.
  • Incident Response Planning: Develop and regularly update response strategies to address potential security breaches swiftly.

Scalability Solutions: Layer-2 Protocols and Sharding for Handling High Volume

To accommodate a growing user base and high transaction volumes, scalability is key. Consider these solutions:

• Layer-2 Protocols: These are built on top of existing blockchains to enhance transaction speed and reduce costs.
  • State Channels: Allow transactions to occur off-chain, settling final states on the main chain, thus alleviating congestion.
  • Rollups: Bundle multiple transactions into a single one, improving throughput and efficiency.
• Sharding: This involves dividing the blockchain network into smaller, manageable pieces (shards), each handling a portion of the network’s transactions and data.
  • Benefits: Enhances parallel processing, reduces latency, and increases overall network capacity.
  • Considerations: Implementing sharding requires careful planning to ensure security and data consistency across shards.

Minimizing Gas Fees and Improving Speed: Optimizing Your DEX for User Experience

A seamless user experience hinges on transaction efficiency. Here’s how to optimize:

• Gas Fee Optimization: High fees can deter users. Mitigate this by:
  • Efficient Contract Design: Write gas-efficient code to minimize computational costs.
  • Batch Processing: Group multiple transactions into one to reduce the number of operations and associated fees.
• Transaction Speed Enhancements: Users expect swift transactions. Achieve this by:
  • Off-Chain Computations: Perform non-essential computations off-chain to reduce load on the main network.
• Optimized Consensus Mechanisms: Utilize consensus algorithms that balance speed and security, such as Proof-of-Stake or Delegated Proof-of-Stake.

Designing User Experience (UX) for a Seamless Perpetual Trading Platform

Creating a user-friendly interface for a perpetual trading platform is essential to attract and retain traders. Here’s how you can achieve this:

How to Build a Simple and Intuitive User Interface for Complex Products

• Simplify Complex Processes: Break down intricate trading functionalities into easy-to-understand steps. Use tooltips, tutorials, and onboarding guides to assist new users.
• Consistent Design Elements: Maintain uniformity in design elements like buttons, fonts, and color schemes to create a cohesive and professional look.
• Responsive Layout: Ensure the platform is accessible and fully functional across various devices, including desktops, tablets, and smartphones.
  

Fast Execution and Low Latency: How to Keep Trades Smooth and Reliable

• Optimize Backend Infrastructure: Utilize high-performance servers and content delivery networks (CDNs) to reduce latency and ensure quick trade executions.
• Efficient Codebase: Regularly review and optimize the platform’s code to eliminate bottlenecks and improve processing speeds.
• Load Testing: Conduct regular load tests to identify and address potential performance issues under varying user loads.

Enhancing the Trading Experience: Adding Advanced Features Like Leverage and Margin

• Leverage Trading: Offer leverage options to allow traders to amplify their positions. For instance, providing leverage ratios such as 2x, 5x, or even higher can cater to different risk appetites. However, it’s crucial to implement robust risk management systems to prevent significant losses.
• Margin Trading: Enable margin trading to let users borrow funds to increase their trading positions. This feature can attract more experienced traders seeking advanced trading strategies. Ensure clear communication of margin requirements and potential risks.
• Risk Management Tools: Incorporate features like stop-loss orders, margin calls, and automated liquidations to protect users from excessive losses and maintain platform stability.

Susa-Inspired Innovations: How to Add Unique Features to Your Perpetual DEX

Developing a perpetual decentralized exchange (DEX) that stands out in the competitive DeFi landscape requires innovative features that enhance user experience and platform performance. Drawing inspiration from platforms like Susa, here are key areas to focus on:

Introduction to Susa’s Innovative Features and How They Elevate User Experience

Susa, SushiSwap’s on-chain perpetual DEX, has set new standards in decentralized trading by integrating advanced features that prioritize user experience:

• High Transaction Throughput: Leveraging Layer N’s modular technology, Susa achieves transaction speeds exceeding 100,000 transactions per second (TPS) with latency under 1 millisecond. This ensures a seamless trading experience, even during peak times.
• Capital Efficiency: Utilizing technologies like the Nord Engine, Susa optimizes resource usage, enabling deeper liquidity pools and more cost-effective trading. This reduces slippage and ensures fair pricing for traders.
• Enhanced Security: Built on the secure foundations of Ethereum and Layer N, Susa protects against exploits while maintaining decentralization. This approach offers users a trustworthy trading environment, distinguishing it from centralized platforms.
  

Unique Liquidity and Risk Management Models: Setting Your DEX Apart

To differentiate your DEX, consider implementing unique liquidity and risk management models:

• Dynamic Liquidity Pools: Incorporate multi-asset liquidity pools that adapt to market conditions, supporting various tokens like BTC, ETH, and stablecoins. This approach enhances liquidity depth and provides traders with a diverse range of assets.
• Innovative Risk Management Tools: Implement features such as adjustable leverage, customizable margin requirements, and automated liquidation mechanisms. These tools empower traders to manage their positions effectively while maintaining platform stability.
  

Creating Cross-Chain Functionality: Unlocking Greater Market Access

Integrating cross-chain functionality can significantly expand your DEX’s market reach:

• Cross-Chain Asset Swaps: Enable seamless token exchanges across different blockchain networks, allowing users to trade assets without relying on centralized exchanges. This enhances liquidity and user engagement.
• Interoperability Protocols: Utilize protocols like LayerZero to facilitate trustless communication between disparate blockchains. This ensures users can trade assets across multiple ecosystems without the need for intermediaries.

Integrating Advanced DeFi Protocols and Technologies

Building an on-chain perpetual decentralized exchange (DEX) like Susa involves incorporating advanced decentralized finance (DeFi) protocols and technologies to enhance functionality, user experience, and market competitiveness. Key integrations include:

Using Synthetic Assets in Perpetual DEXes: Unlocking New Trading Opportunities

Synthetic assets are blockchain-based representations of real-world assets, enabling traders to gain exposure to various markets without directly holding the underlying assets. Integrating synthetic assets into your perpetual DEX can offer several advantages:

• Increased Accessibility: Synthetic assets lower barriers to entry by allowing traders to access a wide range of assets without owning them, making trading more inclusive. citeturn0search4
• Enhanced Liquidity: The use of synthetic assets can significantly boost liquidity on DEXs, facilitating smoother trade executions at better prices. citeturn0search4
• Diversification Opportunities: Synthetic assets enable traders to diversify their portfolios by gaining exposure to various asset classes, helping manage risk and optimize trading strategies. citeturn0search4
  

To implement synthetic assets effectively, collaborate with established liquidity protocols and integrate reliable price feeds from decentralized oracles to ensure accurate and real-time valuations.

The Role of Decentralized Oracles in Ensuring Fair Price Discovery

Decentralized oracles are crucial for providing real-time, reliable data from external sources to on-chain smart contracts, ensuring that decentralized applications (dApps) react to real-world events and interoperate with traditional systems. 

• Price Accuracy: Oracles enhance price accuracy on DEXs by delivering current market prices from various exchanges and data providers, ensuring trades are based on the latest information. 
• Transparency: By providing accessible real-time price data, oracles increase transparency, helping build user trust in the platform. citeturn0search1
• Risk Management: Accurate price feeds from oracles allow DEXs to manage risks associated with price volatility, ensuring that trades are executed based on reliable data. 
  

Integrating decentralized oracles is essential for maintaining the integrity and reliability of a perpetual DEX, fostering a trustworthy trading environment.

Integrating Layer-2 Solutions for Seamless Performance and Reduced Costs

Layer-2 solutions are secondary frameworks built on top of existing blockchain networks to enhance scalability and efficiency. Incorporating Layer-2 solutions into your DEX can provide:

• Scalability: Layer-2 solutions can handle a higher number of transactions per second (TPS), accommodating increased trading volumes without congesting the main blockchain. 
• Reduced Costs: By processing transactions off-chain and settling final states on the main chain, Layer-2 solutions can significantly lower transaction fees, making trading more cost-effective for users. 
• Improved User Experience: Enhanced transaction speeds and lower costs contribute to a smoother and more responsive trading experience, attracting and retaining users.

Developing the Back-End Infrastructure for Perpetual DEXes

Creating a robust back-end infrastructure is the backbone of any successful perpetual decentralized exchange (DEX). Here’s how to build it:

Choosing the Right Blockchain for Your Perpetual DEX

• Ethereum: Renowned for its security and widespread adoption, Ethereum is a popular choice for DEX development.
• Binance Smart Chain (BSC): Known for faster transaction times and lower fees, BSC is suitable for high-performance DEXs.
• Solana: Offers high throughput and scalability, making it ideal for handling large volumes of trades.
  

Smart Contract Development and Testing: Building Trustworthy Code

• Security Audits: Regularly conduct audits to identify and fix vulnerabilities, ensuring the integrity of your DEX.
• Formal Verification: Use mathematical proofs to validate that your smart contracts function as intended, minimizing the risk of errors.
• Testnets: Deploy your contracts on test networks to simulate real-world conditions and gather feedback before the main launch.
  

The Importance of Blockchain Interoperability for DeFi Projects

Blockchain interoperability is crucial for the success of DeFi projects, including DEXs. Here’s why:

• Enhanced Liquidity: Interoperable DEXs can access liquidity across multiple blockchains, offering users better trading opportunities.
• Expanded User Base: By supporting various blockchains, your DEX can attract users from different ecosystems, increasing adoption.
• Risk Mitigation: Interoperability allows for diversified asset storage, reducing the impact of potential security breaches on a single blockchain.

Marketing and Growth Strategies for Your Perpetual DEX

Launching a perpetual decentralized exchange (DEX) is an exciting venture, but standing out in the crowded DeFi space requires strategic marketing and community engagement. Let’s explore effective approaches to elevate your platform’s visibility and user adoption.

Attracting Early Adopters: How to Market a New DeFi Platform

Gaining traction with early adopters is crucial for the success of your DEX. Here are some strategies to consider:

• Offer Incentives: Encourage active trading and liquidity provision by rewarding users with tokens or other benefits. This not only attracts new users but also fosters engagement among existing ones. 
• Content Marketing: Create informative content such as blog posts, tutorials, and videos that educate potential users about your platform’s unique features and the benefits of perpetual trading. 
• Social Media Engagement: Utilize platforms like Twitter, Reddit, and Telegram to share updates, answer questions, and build a community around your DEX. 
  

Building a Strong Community: The Role of Tokenomics and Incentives

A vibrant community is the backbone of any successful DeFi project. Here’s how tokenomics and incentives play a pivotal role:

• Define Your Target Audience: Understand who your ideal users are and tailor your messaging to address their needs and interests. 
• Create Valuable Content: Develop content that resonates with your audience, helping them understand the value proposition of your DEX and how to use it effectively.
• Engage Regularly: Maintain active communication through social media, forums, and events to keep your community informed and involved.
• Implement Reward Systems: Introduce staking mechanisms, governance participation rewards, or loyalty programs to incentivize active community involvement.
  

Partnerships and Integrations: Collaborating with DeFi Ecosystem Players

Strategic collaborations can significantly boost your platform’s credibility and reach:

• Identify Synergistic Partners: Look for projects that complement your DEX’s offerings, such as lending platforms, yield aggregators, or other DeFi services.
• Cross-Promotions: Engage in mutual marketing efforts, such as co-hosted events, joint content creation, or shared liquidity pools, to expand your user base.
• Integrate with DeFi Aggregators: Ensure your DEX is accessible through popular DeFi aggregators and wallets to increase visibility and user accessibility.

Conclusion

Building your own on-chain perpetual DEX like Susa requires a combination of innovative features, robust back-end infrastructure, and strategic marketing efforts to ensure its success in the competitive DeFi space. By focusing on scalability, security, and user experience, you can create a platform that meets the needs of modern traders while staying ahead of industry trends. If you’re looking to bring your vision to life, Blockchain App Factory provides expert DEX development services, helping you design and launch a cutting-edge decentralized exchange tailored to your business needs.