What Is Hyperliquid?
Hyperliquid is a decentralized perpetuals exchange running on its own custom layer-1 blockchain. The system is split into two tightly connected components: HyperCore, which manages onchain order books, margining, and liquidations, and HyperEVM, an Ethereum-compatible layer that adds programmability. Both run under HyperBFT, a proof-of-stake consensus inspired by HotStuff, ensuring speed and full custody onchain. With latency as low as 0.2 seconds, Hyperliquid rivals centralized exchanges in efficiency.
A Record $330 Billion Month
In July 2025, Hyperliquid processed about $319 billion in perpetuals trading volume, pushing total DeFi perpetuals activity to record highs. When including spot activity, its volume hit $330.8 billion—surpassing Robinhood’s $237.8 billion for the same month. July marked the third straight month Hyperliquid outpaced Robinhood, proving the platform’s momentum is not a one-off event but part of a sustained trend.
Engineering for High Throughput
Hyperliquid’s architecture emphasizes throughput without sacrificing decentralization. HyperCore runs central-limit order books entirely onchain, while HyperEVM allows smart contracts to integrate directly with the exchange state.
Unlike hybrid DEXs that outsource matching, Hyperliquid keeps all critical processes onchain. This approach ensures transparency and aligns the system more closely with the ethos of decentralized finance while maintaining near-CEX speed.
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Lean Operations With 11 Employees
Founder Jeff Yan leads a team of just 11 core contributors. Hyperliquid remains self-funded, deliberately avoiding venture capital to keep incentives aligned with users instead of investors. The team emphasizes selectivity in hiring, aiming for cultural cohesion and rapid execution. When a 37-minute API outage disrupted trading in July, the team reimbursed $1.99 million the next day, reinforcing its reputation for accountability and agility.
Incentives: The HLP Vault and Assistance Fund
Hyperliquid aligns traders, liquidity providers, and token holders through two mechanisms:
- HLP Vault: A community-funded vault that manages market-making and liquidations, distributing profits and a share of fees to depositors.
- Assistance Fund: Receives 93% of protocol fees, buying back and burning HYPE tokens to reduce supply while 7% supports HLP.
This flywheel effect encourages liquidity provision, reduces circulating supply, and sustains demand for Hyperliquid’s ecosystem.
Distribution, Airdrops, and Adoption
On Nov. 29, 2024, Hyperliquid launched its HYPE genesis airdrop, distributing 310 million tokens worth roughly $1.6 billion to 90,000 early users. Integration with Phantom Wallet in mid-2025 further accelerated adoption, contributing billions in additional trading volume. With HyperEVM live since February 2025, developers can now build wallets, vaults, and new markets directly on Hyperliquid, strengthening its ecosystem.
Risks and Critiques
Despite its growth, Hyperliquid faces several concerns:
- Validator Decentralization: Researchers flagged transparency and concentration risks, though the team has pledged to open-source code and expand validators.
- Market Concentration: With an estimated 75–80% share of DeFi perpetuals trading, Hyperliquid’s dominance creates systemic exposure if liquidity shifts.
- Operational Risks: The July API outage highlighted vulnerabilities, even though the team’s quick reimbursements built user trust.
Hyperliquid also relies on validator-maintained oracles, which could be manipulated. To mitigate risk, safeguards block orders more than 1% from oracle prices, though the HLP vault remains exempt.
Why Hyperliquid Succeeded Where Others Stalled
Hyperliquid’s rapid rise can be attributed to four key factors:
- Technical architecture that combines CEX-like speed with onchain custody.
- Aligned incentives through buybacks and vault-based liquidity provision.
- Lean operations that prioritize execution over headcount.
- Distribution advantages, from a massive airdrop to wallet integrations.
Looking ahead, its durability depends on delivering decentralization promises, expanding spot and third-party integrations, and maintaining resilience as competitors adopt similar designs.
Hyperliquid’s $330B Volume: How a Small Team is Challenging Centralized Giants
Hyperliquid has proven that a small, focused team can scale a DeFi exchange to rival major centralized players. With $330 billion in monthly trading volume, its combination of engineering, incentives, and community distribution marks a milestone in decentralized finance. Whether it can sustain that growth under increasing scrutiny will determine if Hyperliquid remains a leader or becomes a stepping stone for the next wave of onchain exchanges.
