What is Hyperliquid?

Hyperliquid is a high-performance Layer‑1 blockchain and decentralized exchange (DEX) designed for both perpetual futures and spot trading on a fully on-chain order‑book. Its custom consensus, HyperBFT, enables sub‑second finality, zero gas fees, and real-time transparency.

Founded with the goal of merging the best aspects of centralized exchanges (CEX) — namely user experience and liquidity — with decentralized finance’s benefits, Hyperliquid launched its perpetual DEX in 2023. By Q1 2025, it held ~70% of monthly on‑chain perpetual trading volume, outperforming rivals by significant margins.

Layer 1 & HyperEVM

Hyperliquid’s L1 blockchain uses HyperBFT — an adaptation of Byzantine Fault Tolerance consensus — for both speed and security. The chain supports two execution environments:

• HyperCore: Powers perpetual and spot trading with a fully on-chain central limit order book (CLOB).
• HyperEVM: A full EVM-compatible environment, enabling developers to build smart contracts that leverage Hyperliquid’s fast and transparent infrastructure.

Perpetual DEX & Order-Book Trading

The core trading engine in Hyperliquid is a fully on‑chain order‑book for perpetual futures. Unlike AMM-based DEXs, users benefit from:

• CEX-style order types: market, limit, stop-loss, take-profit, TWAP, scale orders.
• High leverage capability — up to 50× on BTC, ETH, SOL, and more.
• No gas fees — all transactions and order matching occur on L1 with zero gas costs.
• Fast finality — trade settlement in under a second thanks to HyperBFT consensus.

Spot Exchange & Vaults

In 2024, Hyperliquid introduced spot trading through HIP standards:

• HIP-1: Token listing standard ensuring vetted, quality assets.
• HIP-2: Automated liquidity support via native market-making vault mechanisms.
• Vaults: Users can deposit into protocol vaults (e.g., HLP) or create custom vaults — earning shares of profits and replicating trading strategies on-chain.

The HYPE Token

HYPE is the native utility and governance token of Hyperliquid serving multiple functions:

• Governance: Token holders participate in protocol decisions, including vault parameters and fee structures.
• Staking: HYPE can be staked with validators, supporting network security and earning rewards.
• Vault Creation: HYPE is required to create and manage custom vaults, enabling strategy leaders to earn performance fees.
• Fee Buybacks: ~97% of protocol fees are used to buy back HYPE, fueling deflationary dynamics.

Vault Types & HLP

Vaults are a cornerstone of Hyperliquid’s capital deployment model:

• HLP (Hyperliquidity Provider): Automated vault providing liquidity and absorbing risk. TVL exceeds $390 M with ~36% APR.
• User Vaults: Anyone can be a vault leader with a minimum deposit (e.g., 100 USDC), managing strategies transparently and earning protocol fees.

Market Metrics & Adoption

By mid-2025, Hyperliquid had become a market-leading perpetual DEX with:

• Daily perp volume of $3–4 billion—rivaling centralized exchanges.
• ~71% of all on-chain perp trading volume.
• Support for 130+ assets with full order types and margin features.
• Robust contract levels: 200k orders/sec throughput and sub-second finality.

Security & Audits

Hyperliquid emphasizes transparency: all trades, orders, and liquidations are on-chain. While smart contracts undergo auditing, the platform is relatively new compared to Ethereum. Users should still practice diligence by verifying contract addresses and using trusted wallet interfaces.

Developer Ecosystem

Thanks to HyperEVM, developers can:

• Build DeFi apps, bots, automation, and DEX tools;
• Interface directly with HyperCore smart primitives;
• Tap into fast oracle data, funding rates, and on-chain order book logic.

Frequently Asked Questions About Hyperliquid