Hyperliquid (HYPE) HYPE

Hyperliquid (HYPE) is a layer 1 blockchain built around trading. It runs fully on-chain order books for perpetual futures and spot markets, and a smart contract environment compatible with Ethereum, the HyperEVM. HYPE is the network’s native token: it secures the chain through staking, pays gas on the HyperEVM and gives trading fee discounts. Here is how Hyperliquid works, its history, its uses and its risks.

What is Hyperliquid?

Hyperliquid is developed by Hyperliquid Labs, a team led by Jeff and “iliensinc”, former Harvard classmates, with members who previously worked at trading firms such as Citadel and Hudson River Trading. According to the official documentation, the team ran crypto market-making in 2020, turned to DeFi in the summer of 2022 and has been fully self-funded, without venture capital. The Hyper Foundation supports the ecosystem, notably through a validator delegation programme.

The idea is to offer the speed and features of a centralised exchange while keeping every order, cancellation, trade and liquidation transparent on a blockchain.

How Hyperliquid works

HyperBFT consensus

The chain is secured by HyperBFT, a proof-of-stake consensus inspired by the HotStuff family of protocols and optimised for low latency. Transactions reach finality in a single block. The active validator set is made up of the top 27 validators by stake, and the set changes in epochs of about 90 minutes.

HyperCore and HyperEVM

The state of the chain has two parts that share the same consensus:

• HyperCore: the native order books for perpetual futures and spot trading, margin and liquidations.
• HyperEVM: an Ethereum-compatible environment where developers deploy smart contracts that can interact directly with HyperCore liquidity. HYPE is its gas token.

USDC is minted natively on Hyperliquid through Circle’s cross-chain transfer protocol, replacing the original bridge from Arbitrum, which is now deprecated.

Improvement proposals (HIPs)

New features arrive through Hyperliquid Improvement Proposals: HIP-1 defines native tokens, HIP-2 provides automated liquidity for them, HIP-3 lets builders deploy their own perpetual markets if they stake 500,000 HYPE, and HIP-4 introduces outcome markets.

The HYPE token

HYPE has a maximum supply of 1 billion tokens. Its genesis took place on 29 November 2024, when tokens were distributed to more than 94,000 addresses, mainly users who had earned points since November 2023. A large share is reserved for future emissions and community rewards, and another share for core contributors. There was no allocation to venture investors.

Trading fees go to the community rather than to a company: to the HLP liquidity vault, to deployers and to an Assistance Fund that automatically converts fees into HYPE and burns them, removing them from supply.

A short history of Hyperliquid

• Summer 2022: the team turns from market making to DeFi and starts building its exchange.
• 1 November 2023: launch of the points programme.
• 29 November 2024: HYPE genesis and distribution to users.
• 24 September 2026: Binance lists HYPE for spot trading.

What is Hyperliquid used for?

Most activity is the trading of perpetual futures, a type of derivative with no expiry date, and spot trading on the decentralised exchange. Other teams build trading apps and wallets on top of its liquidity, earning fees through “builder codes”, while lending, stablecoin and vault protocols run on the HyperEVM. HYPE can be staked to validators to earn rewards.

Risks and criticism

• Leverage: perpetual futures can wipe out a position in minutes; many users lose money.
• Validator decisions: validators can vote to delist a perpetual market, which settles open positions at an oracle price. Critics see this as discretionary intervention.
• Decentralisation: the active set is limited to 27 validators.
• Technical risk: bugs, oracle errors or manipulation of thin markets can cause losses.
• Regulation: leveraged derivatives are restricted for retail investors in several jurisdictions. Check the rules where you live.
• Unstaking delay: moving HYPE out of staking takes 7 days.

How to store HYPE

HYPE is now listed on major centralised exchanges. On Hyperliquid itself, you connect an Ethereum-compatible wallet; you can also connect a hardware wallet through such a wallet. Read our introduction to DeFi before using on-chain trading, and check official links in the Hyperliquid documentation to avoid phishing sites.