At Consensus Miami, panelists discussed why institutional investors largely avoid perpetual decentralized exchanges (perp DEXs), citing security risks and KYC friction as main barriers. The session, featuring Wizard of SoHo, Michaël van de Poppe, and Michael Anderson, highlighted recent exploits like the Drift hack as reinforcing institutional caution. Anderson admitted to being scared to use DeFi, calling it a minefield. They noted that institutions require robust security and compliance, conflicting with DeFi's permissionless design. KYC requirements are a key divergence: DeFi is non-KYC, but institutions need identity verification. Panelists also discussed AI-driven trading, with van de Poppe seeing AI agents as inevitable evolution of algorithmic trading. The implications for wallet and key holders: high security risks persist in perp DEXs; users should exercise caution and prioritize platforms with strong security track records. Institutions may eventually demand hybrid models combining DeFi efficiency with KYC compliance. Users must stay vigilant against exploits and ensure private key security.

Key facts

• Institutional investors avoid perp DEXs due to security risks like the Drift hack.
• Michael Anderson said he is scared to use DeFi, calling it a minefield.
• KYC friction clashes with DeFi's permissionless model, blocking institutional adoption.
• AI agents are seen as the next level of algorithmic trading, inevitable in crypto.
• Panelists agree that onboarding institutional capital is the biggest challenge for perp DEXs.

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