Blockchains create net new markets

The Core Question

The report asks whether blockchain technology can finally align the supply of financial markets with the long‑standing global demand for risk‑transfer tools. Historically, new markets emerged slowly, constrained by the need for centralized listing, regulatory approval, and geographic proximity. a16z crypto argues that blockchains, by making issuance permissionless and distribution global, remove these constraints and unlock a wave of net‑new markets.

Data and Methodology

The analysis draws on on‑chain volume data, case studies of emerging market categories, and a qualitative timeline of financial innovation. It highlights the rapid growth of perpetual futures on real‑world assets (RWA) and the expanding role of automated market makers (AMMs) as proxies for market‑making functions. a16z crypto estimates that July on‑chain RWA perpetual volume hit an ≈$1.4T run‑rate, representing roughly half of Hyperliquid’s total order book.

Main Findings

Blockchains have already generated both new units of risk—such as prediction contracts on elections, peer‑to‑peer credit exposure, and tokenized cultural relevance—and new instruments—like AMM‑based markets, perpetual contracts, and bonding‑curve issuances. The permissionless model creates a self‑selecting ecosystem where only markets that attract liquidity survive. The surge in on‑chain RWA perpetual volume illustrates how traditional risk exposures (equities, commodities, oil) can be paired with novel, always‑on transfer mechanisms, driving unprecedented trading activity.

Caveats and Limitations

The report acknowledges that permissionless issuance also produces “noise”: low‑quality or speculative markets that may never achieve depth. Moreover, reliable oracles and sufficient counter‑party capital remain essential for synthetic products like perpetuals. a16z crypto cautions that its observations are based on publicly available on‑chain data and third‑party sources, which may not capture the full scope of off‑chain activity or regulatory risk.

Implications for Readers

For participants in the broader crypto ecosystem, the findings suggest that value will increasingly accrue to protocols that enable easy market creation and robust price discovery. Investors and builders should watch for emerging risk units—compute, social trends, macro indicators—and the infrastructure that supports them, such as global derivative platforms like Hyperliquid. As traditional markets face constraints like limited trading hours and geographic gating, on‑chain alternatives are likely to capture a growing share of global risk‑transfer demand.