Hyperliquid is a high-performance decentralized perpetual futures exchange built on its own custom Layer-1 blockchain. It is designed for traders who want the speed and functionality of a centralized exchange, but with the transparency and self-custody of a decentralized finance (DeFi) platform.
Core technology and features
- Purpose-built Layer-1 blockchain: Unlike many decentralized exchanges (DEXs) that are built on top of existing blockchains like Ethereum, Hyperliquid runs on its own chain, Hyperliquid L1. This proprietary blockchain is engineered for speed and high transaction throughput, allowing it to rival the performance of centralized exchanges.
- High performance and on-chain order book: Hyperliquid utilizes a custom consensus algorithm called HyperBFT to achieve sub-second transaction finality and process up to 200,000 orders per second. It uses a fully on-chain order book for its perpetual futures and spot trading, ensuring that every order, trade, and liquidation is transparent and verifiable.
- Zero gas fees: Traders on Hyperliquid do not pay gas fees for transactions. Instead, the platform charges low maker and taker fees that decrease with higher trading volume.
- Advanced trading tools: The exchange supports advanced order types typically found on centralized platforms, including market, limit, stop-loss, take-profit, and scale orders. Traders can also use leverage of up to 50x on certain perpetual contracts.
- Hyperliquidity Provider (HLP) vaults: Hyperliquid offers an innovative system where users can deposit USDC into liquidity vaults. These vaults actively provide liquidity for market-making and earn profits from trading fees and liquidations.
- Community-first tokenomics: The platform has no venture capital backing and launched its native HYPE token via a massive airdrop to early users in November 2024. The token is used for staking, governance, and fee discounts.
The HYPE token
As the native token of the ecosystem, HYPE plays several roles:
- Staking: HYPE holders can stake their tokens to help secure the network and earn a portion of the trading fees as rewards.
- Governance: HYPE token holders can participate in the platform’s decision-making processes by voting on key proposals.
- Discounts: Holding or using HYPE can result in discounts on trading fees.