Hyperliquid: how an innovative exchange is conquering the market

New crypto projects emerge every day: according to CoinGecko, in 2024, over 5,000 new crypto assets were launched daily, and the total number exceeded 37 million.

Most new crypto projects remain relatively unknown, but some manage to become popular and take leading positions in the crypto industry within a short time. One such example is Hyperliquid.

What is Hyperliquid?

Hyperliquid is a cryptocurrency derivatives* exchange built on its own Layer-1 blockchain. The decentralized exchange and the leading Hyperliquid network were launched in June 2023.

* A cryptocurrency derivative is a financial instrument based on cryptocurrencies that represents a contract for the future value of a digital asset. Derivatives include futures, perpetual contracts, options, and swaps.

Although the platform operates on a blockchain, Hyperliquid is functionally more similar to centralized trading platforms as it has a deposit-based system. This means that to trade, users must deposit digital assets into a separate wallet on the exchange. However, all transactions on Hyperliquid are conducted on the blockchain. Additionally, unlike many other centralized platforms, Hyperliquid does not require user verification (KYC).

Hyperliquid started rapidly gaining popularity due to the following advantages:

High transaction processing speeds, including order execution;
Support for leveraged trading*;
Advanced features include risk management (stop losses* and take profits*).

* Leverage (or credit leverage) is a financial tool that enables traders to control a larger market position with a smaller amount of capital. In simpler terms, leverage enables borrowing money from a broker to increase the size of a trade. For example, if a trader has $100 and uses a 10:1 leverage, they can control a $1,000 trade. This increases both potential profits and possible losses.

* A stop-loss is an order that automatically closes a position at a specific loss level, thereby limiting losses. For example, if a trader buys an asset for $100 and sets a stop-loss at $90, the order will sell the asset if the price drops to $90, preventing further losses.

* Take-profit is an order that automatically closes a position when the price of an asset reaches a predetermined profit level. For example, if a trader buys an asset for $100 and sets a take-profit at $120, the order will execute and close the position once the price reaches $120, locking in the profit.

As of October 2025, the daily trading volume on Hyperliquid exceeds $9 billion, making it the sixth-largest exchange, only behind Binance, OKX, ByBit, Bitget, and Coinbase. In May of the same year, Hyperliquid briefly entered the top five exchanges by trading volume. This is despite Hyperliquid's team not having attracted venture investments.

Hyperliquid also leads in trading volume among all exchanges operating on blockchain platforms. For comparison, the largest DEX exchange, Uniswap, has a trading volume of just $3.6 billion.

How Hyperliquid works

Hyperliquid differs from most well-known decentralized exchanges, such as Uniswap, PancakeSwap, Balancer, and Curve, which operate on existing smart contract platforms like Ethereum and BNB Smart Chain (BSC).

The Hyperliquid exchange runs on its own high-performance engine, HyperCore, which is one of the two key components of the platform. HyperCore processes transactions in mere fractions of a second and ensures the transparency of transactions. According to the developers, the HyperCore engine can handle up to 200,000 orders per second.

The second key component of the platform is the HyperEVM virtual machine, built on top of the EVM, making Hyperliquid's smart contracts compatible with the Ethereum blockchain.

At the core of Hyperliquid's protocol is its custom blockchain, which the team developed and optimized from scratch. Hyperliquid's blockchain operates using a consensus mechanism called HyperBFT, a modification of the Byzantine Fault-Tolerant (BFT) consensus.

Features of Hyperliquid exchange

Hyperliquid offers trading in spot and perpetual contracts, supporting leverage of up to 50x. The platform provides over 170 cryptocurrency futures, including popular meme tokens like Pudgy Penguin (PENGU), Fartcoin (FARTCOIN), and dogwifhat (WIF), as well as new tokens like Pump.fun (PUMP).

In addition to spot and futures trading, Hyperliquid supports:

Deposits (Vaults) for passive yield, which as of October 2025, range from 8% to 800%. Essentially, deposits on Hyperliquid represent auto-follow (copy trading).
Staking of HYPE tokens;
A portfolio manager for asset analysis and management, as well as monitoring open positions;
Advanced features, such as subaccounts and multi-signature, for enhanced account security.

To trade on Hyperliquid, users must first connect any EVM-compatible wallet, such as Metamask, Rabby, OKX Wallet, or Zerion, and then fund the balance with stablecoins or other available tokens, just like on traditional platforms.

Criticism of Hyperliquid

Despite excellent market performance and high popularity, Hyperliquid has faced criticism from the community, which accused the platform of market manipulation.

This was related to an incident involving the meme token JELLYJELLY on Hyperliquid.

One large trader opened a short position on Hyperliquid for $8 million but then canceled the collateral and simultaneously opened long positions on other exchanges, leading to a rise in the price of JELLYJELLY. As a result, Hyperliquid incurred unrealized losses of $12 million.

The platform's team intervened in the situation and suspended trading of JELLYJELLY, which sparked a wave of criticism from the community. As a result, users of the exchange suffered losses, and experts described the platform's actions as "unethical and unprofessional," questioning the team's integrity. Following swift actions, the exchange itself did not incur any losses and even made a profit of $700,000. However, later, the Hyperliquid team compensated the affected users for their losses.

Hyperliquid token

The HYPE token was launched in November 2024 and initially distributed through an airdrop* among active participants in the ecosystem. During the airdrop, the Hyperliquid team distributed 28% of the total HYPE token supply, which amounts to approximately 1 billion tokens.

* An airdrop is a free distribution of cryptocurrency.

HYPE became one of the fastest-growing tokens in 2025, entering the top twenty cryptocurrencies by market capitalization. Since the beginning of the year, the altcoin's price has risen by over 95% as of October 2025.

With a market capitalization of $15.7 billion, HYPE ranks 11th overall in the cryptocurrency ranking and second among exchange tokens, after BNB. Since its listing, the HYPE token's price has increased by more than 1300%.

One of the main drivers of HYPE's growth has been the automatic buyback model. The Hyperliquid team directs 93% of the platform's revenue towards buying back HYPE tokens. According to ASNX data for September 2025, Hyperliquid has already repurchased more than 30 million HYPE tokens, totaling $1.7 billion.

In August 2025, Hyperliquid reported record revenue of over $100 million, representing a 23% increase from the previous month.