The Core Shift: Brokers Go Onchain

eToro’s $12.5 million investment in Extended, an onchain perpetual futures exchange founded by former Revolut executives, marks a decisive move in the race to merge traditional brokerage with decentralized finance. The deal, announced July 2, 2026, follows eToro’s $70 million acquisition of self-custody wallet Zengo in April and signals a clear strategy: bring DeFi products directly to mainstream investors without forcing them to leave the safety of a regulated broker.

Elad Lavi, eToro’s executive vice president of corporate development, stated: “We are seeing growing demand from our users for seamless access to DeFi products.” The plan is to integrate Extended’s perpetual futures engine into the Zengo wallet, giving users onchain derivatives while retaining self-custody. Over time, broader DeFi products will be folded into the core eToro platform.

Why Perpetual Futures Are the Battleground

Perpetual futures have exploded from a niche crypto product into one of the fastest-growing markets in finance. Extended alone has processed over $245 billion in trading volume as of June 2026, supporting more than 100 perpetual markets. The platform plans to expand into spot trading, tokenized real-world assets, and multi-asset collateral.

Ruslan Fakhrutdinov, Extended’s CEO and former Revolut crypto head, described the two-phase strategy: “The first phase was building for DeFi natives. The next is expanding the infrastructure and partnerships needed to support the next stage of onchain derivatives.” eToro’s investment provides both capital and a massive distribution channel—its user base of millions of retail traders.

Competition is fierce. Robinhood rolled out its own blockchain and expanded tokenized stocks on Wednesday, with plans to extend perpetual futures to commodities like gold and oil. Coinbase has already entered perpetuals, and prediction market operator Kalshi recently joined the fray. The lines between crypto exchanges, brokerages, and prediction markets are blurring into a single “everything exchange” model.

Strategic Winners and Losers

Who Gains?

eToro gains a competitive edge by offering onchain perpetuals within a regulated, user-friendly wallet. This attracts DeFi-savvy users who want self-custody without leaving a trusted platform. Extended gains capital and distribution, accelerating its expansion into spot and RWA markets. Zengo becomes the hub for onchain derivatives, increasing its utility and user stickiness.

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Who Loses?

Traditional derivatives exchanges like CME face disintermediation as onchain platforms offer 24/7 trading, lower costs, and self-custody. Centralized crypto exchanges like Binance risk losing market share to regulated brokers offering integrated DeFi products. The hybrid model—regulated broker + self-custody wallet + onchain perps—could become the default for retail traders.

The Everything Exchange: Convergence of CeFi and DeFi

eToro’s move is part of a broader convergence. Capital markets are increasingly merging with digital asset infrastructure. Ouriel Ohayon, Zengo’s managing director, noted: “Capital markets are increasingly converging with digital asset infrastructure. eToro’s investment in Extended reflects a mutual conviction that the future of trading will be digital, accessible and can operate 24/7, beyond the traditional trading week.”

This convergence creates a new competitive dynamic. Brokers that can offer stocks, crypto, derivatives, and prediction markets—all onchain—will dominate. Those that cannot will be left behind. The race is on to become the “everything app” for finance.

Outlook: What to Watch in the Next 30 Days

Watch for integration milestones: when Extended’s perps go live in Zengo, and how quickly eToro expands DeFi products to its core platform. Also monitor Robinhood’s commodity perps launch and Coinbase’s response. Regulatory scrutiny will intensify as onchain derivatives reach mainstream users; the US Treasury’s recent sanctions on crypto addresses highlight compliance risks. Finally, watch Extended’s expansion into spot and RWA—if successful, it could become a major liquidity hub.



Source: CoinDesk

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Intelligence FAQ

To meet growing user demand for DeFi access and to compete with Robinhood and Coinbase by offering perpetual futures within a self-custody wallet.

Extended is an onchain perpetual futures exchange founded by ex-Revolut employees, with $245B+ volume and 100+ markets. It matters because it brings DeFi derivatives to mainstream brokers.

Onchain perps offer 24/7 trading and lower costs, threatening CME’s market share in derivatives as retail and institutional traders shift to blockchain-based platforms.