Summary
- Hyperliquid is a decentralized exchange focused on perpetual futures trading.
- Since its inception in 2023, it has emerged as one of the largest DEXs in the crypto space, handling trillions in trading volume.
- The platform has garnered significant institutional interest, highlighted by ETF applications, pre-IPO trading, and discussions surrounding U.S. stablecoin regulations.
Hyperliquid, a decentralized exchange (DEX) that specializes in perpetual futures, has rapidly evolved from a market maker to a significant player within the cryptocurrency landscape.
According to DeFiLlama, Hyperliquid ranks as the fifth-largest DEX based on 30-day trading volume, having processed trillions of dollars since its launch.
This article explores what Hyperliquid is, its importance, and how it rose to prominence within the crypto industry.
What is Hyperliquid?
Hyperliquid operates as a decentralized exchange dedicated to perpetual futures, utilizing its own layer-1 blockchain.
The platform's native token, HYPE, has achieved remarkable success, placing it among the top 10 cryptocurrencies by market cap.
Why is Hyperliquid Significant?
Hyperliquid simplifies the process for traders to speculate on cryptocurrency price movements, offering low trading fees and a broad selection of assets.
Fees on Hyperliquid depend on the trading volume and market type, with spot taker fees ranging from 0.07% for low-volume traders to 0.025% for high-volume traders. Meanwhile, perpetual futures maker fees can drop to 0% for those with substantial trading volumes, as noted in the Hyperliquid documentation. Taker orders pull liquidity from the market, while maker orders contribute liquidity.
Similar to a centralized exchange, Hyperliquid allows users to trade major cryptocurrencies across various blockchains, including Bitcoin, Ethereum, and Dogecoin. Traders can leverage positions up to 40 times their collateral, although the maximum leverage decreases with larger position sizes.
This dynamic has turned Hyperliquid into a battleground for intense trading contests between large-scale investors and everyday traders.
In March 2025, for example, a trader opened a 40x leveraged short position valued at $521 million on Bitcoin, prompting everyday traders to band together to try to liquidate the position. The movements were publicly tracked on the Hyperliquid block explorer, which displayed wallet positions and liquidation prices. Ultimately, the whale successfully closed the position with a profit of $3.9 million.
These factors have contributed to Hyperliquid attracting over 1.2 million users since its launch, with a total trading volume of $5.91 billion, as per Dune Analytics.
The Genesis of Hyperliquid
Hyperliquid was entirely self-funded and developed by a small team of 11 individuals, as stated by founder Jeff Yan in an interview with WuBlockchain in August 2025. The team opted against accepting venture capital, seeking to prioritize genuine progress for users rather than investors.
Yan began trading cryptocurrencies in 2020 and established a market-making firm that laid the groundwork for Hyperliquid. By 2022, he noted on the When Shift Happens podcast that the market-making operations had reached their limits, prompting him to expand the project further.
The collapse of FTX, which misused customer funds to cover trading losses, catalyzed this expansion. As users rushed to withdraw their funds, they discovered their money was unavailable, leading to Bankman-Fried's conviction on multiple fraud-related charges and a 25-year prison sentence.
Yan referred to this incident as a pivotal moment that fostered distrust towards centralized exchanges, suggesting that the public was ready to embrace decentralized finance.
The downfall of FTX propelled Hyperliquid to fully commit to creating a decentralized exchange.
In February 2023, Hyperliquid launched its mainnet closed alpha, and within five months it reported attracting 4,000 users with 28 assets available for trading, reaching full mainnet in August.
The platform experienced significant growth following its $1.6 billion airdrop in November 2024, marking one of the largest crypto airdrops in history.
However, it faced challenges, including scrutiny from North Korean hackers looking for vulnerabilities in December 2024. Subsequently, it dealt with a liquidation crisis that forced it to delist a Solana meme coin to avoid covering substantial losses.
This incident raised alarms about how the exchange managed highly leveraged positions, with Bitget’s CEO Gracy Chen claiming it could become “FTX 2.0.”
Additionally, Hyperliquid has faced regulatory challenges. In May 2026, the UK’s Financial Conduct Authority issued a warning that Hyperliquid and the Hyper Foundation were unauthorized to offer financial services in the UK.
Recently, Hyperliquid has expanded its market offerings through two significant upgrades.
Introduction of USDH
As stablecoins gained traction in 2025, speculation arose about Hyperliquid launching its own stablecoin. Although founder Jeff Yan initially stated there were no plans for a native stablecoin, the platform later sought proposals for a "Hyperliquid-aligned" stablecoin, ultimately choosing Native Markets over other contenders like Ethena, Paxos, and Sky.
Since its launch in September 2025, USDH has reached a market cap of approximately $21.4 million and a circulating supply of around 21.4 million tokens, according to CoinGecko.
The revenue-sharing model for the stablecoin allocates 50% of reserve yield to the HYPE Assistance Fund and the other half towards promoting USDH adoption, making it central to Hyperliquid’s strategy for enhancing liquidity and aligning the platform's growth with HYPE holders.
In June 2026, the Hyperliquid Policy Center joined Paradigm to contest proposed U.S. anti-money laundering regulations for stablecoin issuers under the GENIUS Act, arguing for a distinction between primary stablecoin issuance and secondary-market activities across wallets, DeFi applications, and validators, cautioning that broad regulations might hinder the use of regulated stablecoins in decentralized networks.
Upgrades: HIP-3 and HIP-4
The HIP-3 upgrade, launched in October 2025, enabled third parties to create and manage their own perpetual futures exchanges using Hyperliquid's infrastructure, allowing for permissionless builder-deployed perpetual markets.
In February 2026, Hyperliquid expanded beyond traditional perpetual futures with the HIP-4 upgrade, introducing a framework for fully collateralized outcome markets. This upgrade facilitated prediction markets and event-based derivatives, allowing traders to speculate on specific outcomes through contracts that settle within a defined range, differing from the leveraged approach typical in perpetual trading.
A month later, traders increasingly utilized Hyperliquid for oil-linked perpetual futures amid escalating tensions between the U.S. and Iran, highlighting Hyperliquid’s role as a 24/7 trading venue for macro trading when traditional markets were closed. This also indicated Hyperliquid's growth into synthetic exposures related to commodities and global events.
In May 2026, Hyperliquid attracted more institutional interest as Bitwise and 21Shares filed for HYPE exchange-traded funds. Jeff Sprecher, founder of the Intercontinental Exchange, noted that Hyperliquid's trading volume had surpassed that of Nasdaq, as the platform broadened its scope to include real-world assets, commodities, equities, and pre-IPO trading. Moreover, it was reported that HIP-3 had processed over $120 billion in volume for pre-IPO markets involving companies like SpaceX, Anthropic, and OpenAI.
The Future of Hyperliquid
Since overcoming its initial challenges, Hyperliquid has secured its place in the crypto ecosystem.
Currently, Hyperliquid ranks as the eighth-largest DeFi chain by total value locked (TVL), ahead of networks such as Aptos, Avalanche, and Linea, according to CoinGecko.
However, Hyperliquid faces potential competition from outside the crypto space. As perpetual futures gain traction, traditional financial institutions are beginning to explore this market, which has long been dominated by crypto-native exchanges.
In May 2026, ICE's CEO Jeffrey Sprecher mentioned that they were examining Hyperliquid's continuous trading model to determine if regulated U.S. exchanges should offer similar perpetual futures products. Kalshi has already introduced Bitcoin perpetual futures in the U.S., while Coinbase is working on expanding institutional access to global perpetual futures markets.
In June 2026, BitMEX co-founder Arthur Hayes predicted that Wall Street firms and major exchanges would eventually develop their own perpetual futures products to compete with Hyperliquid.
While Hyperliquid has popularized on-chain perpetuals and currently leads the category, the pressing question remains whether it can retain its competitive advantage as traditional exchanges enter the fray.