Perpetual Contract Liquidity Dilemma: Market Maker Neutral Strategies Break Down, Global Order Book Drops to Three-Year Low

TokenSherpa · 2026-01-08T12:16:13+00:00

The market crash in October severely impacted market makers, leading to the activation of the ADL mechanism and forced liquidation of short positions, resulting in approximately $20 billion in liquidations. Global liquidity declined, order book depth decreased, and the annualized return of Delta-neutral strategies fell below 4%. B-book platforms profited, while DeFi markets are more susceptible to manipulation, and traditional financial perpetual contract products are growing rapidly.

TokenSherpa

2026-01-08 12:16:13

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【CryptoPunk】The October crash not only impacted retail wallets but also dealt a fatal blow to market makers. According to the latest market analysis, this wave of行情 triggered the ADL (Auto Deleveraging) mechanism, directly tearing apart the market makers’ proud neutral hedging strategies.

What exactly happened? When ADL was triggered, the short positions held by market makers for risk hedging were forcibly liquidated. The problem was that, in a rapidly falling market environment, they were caught off guard—the long and short positions that should have offset each other instantly became unbalanced, exposing them to spot market risk. How intense was this shockwave? Approximately $20 billion in cascading liquidations.

The result was brutal. Market makers began to withdraw en masse, global liquidity shrank accordingly, and the depth of order books fell back to the lowest levels since 2022. Delta-neutral strategies that once earned easy profits through funding rate arbitrage saw their annualized returns shrink to below 4%—even amid a wave of imitators rushing in.

Interestingly, trading platforms operating under the B-book model actually profited quite a bit from this chaos. Meanwhile, the DeFi perpetual contract market remains susceptible to manipulation, whereas traditional financial perpetual products experienced explosive growth—markets are voting with their feet, moving toward more regulated and standardized directions.

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LiquidityLarry

· 01-11 08:17

Market makers have really been cut this time... As soon as ADL was activated, the entire hedging strategy exploded. The $20 billion disappeared in an instant, and they were still hoping for stable passive income. Now, everyone has run away.

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BankruptcyArtist

· 01-09 16:19

The market maker's hedging dream is shattered, now this is really satisfying.

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GasGuzzler

· 01-09 07:41

Market makers were directly wiped out this time, with the 20 billion liquidation indicating complete financial ruin.

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BlockchainBrokenPromise

· 01-09 07:25

Market maker's arbitrage dream shattered, $20 billion disappeared just like that—how can we continue playing like this?

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MetaMuskRat

· 01-08 12:45

Haha, the market maker got exposed this time. Neutral strategies also have their days of failure... A 20 billion liquidation is outrageous, and as soon as ADL is triggered, it just gets pushed in directly.

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EntryPositionAnalyst

· 01-08 12:45

20 billion liquidation, market makers have all fled. Still dare to play perpetuals? Laughing out loud, this is the real liquidity crisis.

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LiquidatedThrice

· 01-08 12:32

The days of market makers making easy money are gone for good. With a $20 billion liquidation in one go, all hedging strategies are useless.

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AirdropHunterZhang

· 01-08 12:28

Wow, even market makers are crashing. I told you that neutral strategies are unreliable, and once ADL steps in, no one can do anything.

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BlockchainArchaeologist

· 01-08 12:17

20 billion liquidation? The market maker's "steady arbitrage" is now a joke... Liquidity has dried up, and the next step directly triggers mechanism risk.

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