Bullet, Formerly Zeta Markets, Launches App-Specific Solana Layer-2 Rollup for Perpetual Derivatives

Executive Summary

Bullet, previously known as Zeta Markets, is launching an app-specific Layer-2 rollup on Solana designed to facilitate high-performance perpetual derivatives trading. This strategic pivot aims to address the limitations of general-purpose blockchains for complex financial instruments, positioning Bullet to compete with both centralized exchanges (CEXs) and leading decentralized perpetual exchanges like Hyperliquid.

The Event in Detail

Bullet, which operated as Zeta Markets and achieved over $10 billion in annual volumes as Solana's first order book perpetual decentralized exchange (DEX), ceased its original product in May to concentrate on its new app-specific Layer-2 rollup. This decision stems from the need to scale beyond Solana's 400ms block time limitations, a factor that impacted Zeta's prior performance, particularly regarding transaction cancellations. Bullet co-founder Tristan Frizza stated, "We had to pay so many priority fees to allow..." and highlighted the lack of cancel prioritization as Zeta's "Achilles heel" on Solana, where reverted transactions peaked at 72% in April 2024 due to competition with MEV arbitrage bots.

The new architecture is a highly customized stack. It runs native Rust code without a general-purpose virtual machine, utilizing Celestia for data availability. Key features include an app-specific sequencer with FIFO (First-In, First-Out) transaction processing and critical cancel prioritization. This prioritization mechanism enables traders and market makers to reliably cancel orders during periods of market volatility, a feature considered instrumental to Hyperliquid's success. Early testnet results indicate ultra-fast latencies of 1.2ms, significantly outperforming Solana's 400ms block time and even Hyperliquid's 70ms block time. The long-term vision includes transitioning to a full zk rollup for enhanced verifiability and elimination of bridging.

Market Implications

Perpetual derivatives represent a "crown jewel" in the cryptocurrency market, accounting for at least 70% of CEX volumes and the majority of their revenues. Data from Kaiko indicates that 68% of all Bitcoin trading volume in 2025 originated from perps. Despite Solana's aspirations to rival traditional financial exchanges, its decentralized perpetual derivatives market currently holds a limited share. Solana's largest perpetual DEXs, Jupiter and Drift, combined hold approximately $533 million in open interest, which represents about 4% of Hyperliquid's open interest. Furthermore, Hyperliquid's monthly volumes of around $300 billion constitute only roughly 6% of the total CEX perps volumes.

Bullet's dedicated app-specific L2 rollup offers a direct challenge to this market disparity by optimizing for the unique performance demands of perpetual trading. By addressing latency and transaction reliability, Bullet aims to capture a larger share of the lucrative perpetual derivatives market. The success of this approach could significantly increase on-chain perp trading volume, potentially shifting market share from CEXs and validating the modular blockchain paradigm for specialized, high-throughput financial applications on Solana.

Expert Commentary

Tristan Frizza, co-founder of Bullet, emphasized the complexity of perpetual derivatives, stating, "Perps may be the most complex DeFi use case — you need high performance, low fees, low latency and forcing it onto a general purpose chain that isn't optimized for it is not ideal." He further elaborated on the architectural choices, noting that "What Bullet is optimizing for is…very hard to do on a geographically distributed validator set of 2,000." However, Frizza affirmed that Solana's global state machine remains excellent for most other use cases, suggesting that app-specific rollups are not a blanket solution but a targeted optimization.

Broader Context

Bullet's initiative is part of a broader trend within the Web3 ecosystem where projects are pursuing specialized solutions to overcome the limitations of general-purpose blockchains for demanding applications. Other Solana-based DEXs, such as Drift, are also innovating by leveraging Jito's newly launched Block Assembly Marketplace (BAM) for custom transaction-ordering logic. However, Bullet's commitment to an app-specific L2 represents a more radical divergence, seeking to build an entirely optimized environment. This strategy mirrors the success seen with platforms like Hyperliquid, which has dominated the perpetual DEX landscape through its tailored infrastructure. If successful, Bullet could set a precedent for high-performance DeFi applications on Solana, attracting more institutional and professional traders by offering an on-chain experience competitive with, or even superior to, traditional centralized platforms in terms of execution speed and reliability.