What is Hyperliquid (HYPE/HYPEEVM)? Complete Guide to Crypto Features, Tokenomics & Buying

In the world of cryptocurrency, the speed and efficiency of trading platforms are crucial. Whether you’re an experienced trader or a newcomer to the field, traditional decentralized exchanges (DEXs) often present challenges such as high latency, expensive fees, and insufficient liquidity. Today, we introduce Hyperliquid, a new platform designed to solve these pain points by combining the speed of centralized exchanges with the security of decentralized exchanges to create an entirely new trading experience.

With its proprietary L1 blockchain, HyperBFT consensus mechanism, and on-chain order book, Hyperliquid offers a trading experience comparable to centralized exchanges while maintaining the transparency and security of decentralization. Whether you’re a day trader seeking high-speed transactions or a long-term investor looking for a more secure trading environment, Hyperliquid is worth exploring.

In this article, we’ll comprehensively analyze Hyperliquid’s core functions, operating mechanisms, tokenomics, and unique value, helping you quickly understand this innovative project that combines high performance with blockchain technology, and assisting you in determining whether it’s worth investing in and following.

What is Hyperliquid Crypto? An Introduction to the High-Performance DEX

Hyperliquid is a high-performance decentralized trading platform built on its own Layer-1 blockchain, focusing on providing perpetual contract and spot trading services. Unlike traditional decentralized exchanges, Hyperliquid adopts an on-chain order book model, recording all transaction data on the blockchain while achieving trading speeds and experiences comparable to centralized exchanges through its innovative technical architecture.

The Hyperliquid platform consists of three main components: a perpetual contract exchange, a spot exchange, and HyperEVM (an environment compatible with the Ethereum Virtual Machine). This complete ecosystem allows users to engage in various trading activities on the same platform while enjoying high levels of security and transparency.

Most notably, Hyperliquid has implemented one-click trading functionality, eliminating the need for users to sign confirmations for each transaction, greatly improving trading efficiency. The platform supports leverage of up to 50x and provides deep liquidity, allowing large trades to be executed at stable prices.

HYPE vs HYPEEVM: Understanding the Hyperliquid Token Ecosystem

HYPE is the native token of the Hyperliquid ecosystem, while HYPEEVM is the token version based on the HyperEVM chain. The relationship between these two is similar to cross-chain assets, but with distinctions.

• HYPE: Primarily used on Hyperliquid’s native L1 network for platform governance, staking rewards, and transaction fee payments.
• HYPEEVM: A token version specifically designed for the HyperEVM environment, and it is this version that is listed on exchanges like MEXC.

It’s particularly important to note that the HYPEEVM traded on MEXC is based on the HYPEEVM chain, with its block explorer at https://hyperliquid.cloud.blockscout.com/. Deposits made through other chains may result in asset loss, so it’s essential to distinguish correctly. This point is crucial for investors, as incorrect transfer operations could lead to irrecoverable losses.

Hyperliquid Features: How the L1 Blockchain Solves Trading Challenges

1. Trading Speed and Efficiency

Traditional decentralized exchanges (DEXs) face severe speed bottlenecks. Due to lengthy blockchain confirmation times, users often wait minutes or even longer to complete transactions. Hyperliquid, through its proprietary HyperBFT consensus mechanism, achieves sub-second confirmation times (median 0.2 seconds, 99th percentile less than 0.9 seconds), nearly matching centralized exchanges.

2. Order Book Decentralization

Most DEXs use Automated Market Maker (AMM) models rather than traditional order books, resulting in increased slippage and reduced trading efficiency. Hyperliquid has successfully placed the order book entirely on-chain while maintaining high performance, processing over 200,000 orders per second, with further improvements planned for the future.

3. Poor User Experience

Traditional DEXs require users to sign confirmations for each transaction, severely affecting trading fluidity. Hyperliquid, through innovative authorization mechanisms, has achieved a one-click trading experience similar to centralized exchanges, eliminating the need for repeated confirmations and greatly enhancing operational efficiency.

4. Inequitable Market-Making Resources

Typically, only large institutions can participate in market-making activities, making it difficult for ordinary users to benefit. Through the HLP (Hyperliquidity Provider) vault, Hyperliquid enables ordinary users to participate in market-making activities and share in the profits, democratizing market-making activities.

5. Lack of True Composability

Traditional trading platforms and DeFi applications lack seamless integration. Through HyperEVM, Hyperliquid provides developers with an environment that can directly interact with trading functions, achieving true on-chain financial composability.

Hyperliquid Founder and Team: The Story Behind Jeff Yan’s Trading Platform

Hyperliquid’s story began in 2022, co-founded by two Harvard University alumni, Jeff Yan and Iliensinc. Jeff Yan previously worked at Google and the high-frequency trading firm Hudson River Trading, and later founded the crypto market-making company Chameleon Labs in 2018, providing him with deep backgrounds in quantitative trading and blockchain technology.

Other team members come from prestigious institutions such as Caltech, MIT, and the University of Waterloo, and had worked at well-known companies like Airtable, Citadel, and Nuro before joining Hyperliquid. Although this lean team consists of only about 10 members, they’ve created a platform with daily trading volumes reaching billions of dollars, demonstrating remarkable efficiency and technical prowess.

The team initially entered the cryptocurrency market in 2020, engaging in market-making activities. However, they quickly discovered serious issues with existing decentralized platforms: poor market design, outdated technical architecture, and subpar user experience. Despite being able to profit from trading on these platforms, the team was disappointed with the backward state of decentralized finance compared to centralized platforms.

This prompted them to decide to build an entirely new platform from scratch, designing a high-performance decentralized L1 blockchain and constructing an order book exchange on top of it. This task required a deep understanding of quantitative trading, cutting-edge blockchain technology, and user experience design, capabilities that the Hyperliquid team possessed.

Hyperliquid Exchange: Core Features, Speed Advantages and Zero Fees

1. Self-Built L1 Blockchain and HyperBFT Consensus Mechanism

Hyperliquid runs on a self-developed Layer-1 blockchain, utilizing a consensus algorithm called HyperBFT. This algorithm, based on HotStuff and LibraBFT (originally developed by Meta’s former blockchain team), has been optimized by the Hyperliquid team and can theoretically support up to 2 million TPS, enabling Hyperliquid to achieve sub-second transaction confirmations and provide users with a trading experience comparable to centralized exchanges.

2. Fully On-Chain Order Book

Unlike most decentralized exchanges, Hyperliquid places the order book entirely on-chain, meaning all orders, cancellations, and trades are transparently recorded on the blockchain, ensuring system fairness and verifiability. Currently, Hyperliquid’s on-chain order book can process approximately 200,000 orders per second, a performance that will continue to improve with ongoing optimization of node software.

3. Zero Gas Fee Trading

Trading on Hyperliquid doesn’t require paying gas fees; users only need to pay very low maker fees (0.01%) and taker fees (0.035%), significantly reducing trading costs, especially for frequent traders.

4. One-Click Trading Experience

Hyperliquid has implemented true one-click trading functionality. Users only need to authorize when first connecting their wallet, after which they can place orders directly without repeatedly signing confirmations. This frictionless trading experience greatly improves trading efficiency, particularly suited for trading strategies requiring quick reactions.

5. HyperEVM Compatibility

Hyperliquid includes a general-purpose EVM (Ethereum Virtual Machine) called HyperEVM, which is not an independent chain but is protected by the same HyperBFT consensus mechanism as L1, allowing the EVM to interact directly with L1’s native components, such as spot and perpetual contract order books.

6. Vault System

Hyperliquid offers an innovative Vault system, including the official HLP (Hyperliquidity Provider) vault and user-created vaults. As the platform’s primary liquidity provider, the HLP vault is also the counterparty for most platform trades, with its earnings directly related to platform activity. Users can also create their own vaults, implementing personalized trading strategies and attracting deposits from other users.

7. Multi-Chain Interoperability

Through bridging functionality, Hyperliquid has achieved interoperability with the Arbitrum network, allowing users to conveniently transfer assets from Arbitrum to Hyperliquid L1. In the future, with the development of HyperEVM, support for asset transfers and interactions between more chains will be expanded.

Hyperliquid Tokenomics: HYPE Supply, Distribution and Value Capture

HYPE is the core token of the Hyperliquid ecosystem, with a fixed total supply of 1 billion tokens. These tokens are distributed according to the following proportions:

• Future Emissions and Community Rewards (38.888%): Approximately 389 million tokens are reserved for future emissions and community rewards, incentivizing ecosystem participants.
• Genesis Distribution (31.0%): About 310 million tokens were distributed through airdrops to early Hyperliquid users based on their points. These tokens are fully circulating.
• Core Contributors (23.8%): Approximately 238 million tokens are allocated to team members, with a one-year lockup period before unlocking begins. Most tokens will unlock between 2027-2028, with some continuing to unlock after 2028.
• Hyper Foundation (6.0%): 60 million tokens are allocated to the Hyper Foundation to support ecosystem development.
• Community Grants (0.3%): 3 million tokens are allocated for community grants, rewarding projects and individuals contributing to the ecosystem.
• HIP-2 Allocation (0.012%): About 120,000 tokens are allocated to the HIP-2 program, which is Hyperliquid’s automated market-making system.

Overall, the token distribution ratio between the team and the community is 3:7, ensuring sufficient decentralization and community leadership. HYPE token’s value comes from two main revenue sources: trading fees and HIP-1 auction fees.

Trading fees include spot and perpetual contract trading fees, perpetual contract funding fees, and liquidation fees. Since Hyperliquid L1 doesn’t charge users gas fees, and HyperEVM hasn’t fully launched yet, Hyperliquid’s revenue currently doesn’t include transaction gas fees.

According to team documentation, all fees are entirely allocated to the community, mainly through the HLP (Hyperliquidity Provider) vault and the Assistance Fund (AF). The specific distribution ratio is 46% to HLP and 54% to the assistance fund for HYPE token buybacks.

The assistance fund regularly uses all accumulated USDC to buy back HYPE, creating sustained buying pressure for HYPE. According to data, the assistance fund has accumulated over 77 million USDC in inflows, with over 25 million just in the past month, averaging about $1 million in daily HYPE buybacks.

On December 30, 2024, Hyperliquid officially launched HYPE staking functionality. Currently, HYPE’s annual staking yield is approximately 2.5%, including only fixed rewards from the PoS consensus layer, with its yield rate model following Ethereum’s consensus layer yield mechanism (yield rate inversely proportional to the square of the total amount of staked HYPE).

HYPE Token Price and Utility: Staking, Governance and HyperEVM Gas

1. Governance Rights

HYPE token holders can participate in voting on important platform decisions, influencing Hyperliquid’s future development direction. Through the governance process, token holders can vote on protocol upgrades, feature updates, fee structure adjustments, and other important proposals, ensuring that the platform’s development direction aligns with the overall interests of the community.

2. Staking Rewards

Holders can stake HYPE tokens to validator nodes, participating in network security maintenance and earning staking rewards. Currently, HYPE’s annual staking yield is approximately 2.5%, primarily from fixed rewards from the PoS consensus layer. In the future, with the implementation of execution layer revenue distribution mechanisms, staking rewards are expected to increase further.

3. HyperEVM Gas Fees

While Hyperliquid L1 doesn’t charge users gas fees, in the HyperEVM environment, HYPE will be used as the payment medium for gas fees. This creates stable demand for HYPE, especially as the HyperEVM ecosystem develops, this demand will continue to grow.

4. Value Capture

The Hyperliquid platform uses a significant portion of its revenue for HYPE token buybacks and burns, allowing token holders to directly share in the platform’s success. As trading volume increases, the scale of buybacks and burns will also expand, creating long-term value support for HYPE tokens.

5. Ecosystem Interoperability

With the development of HyperEVM, HYPE will become the bridge connecting Hyperliquid L1 and the HyperEVM ecosystem, facilitating the seamless flow of assets and information between these two environments. Users can transfer HYPE between Spot balances and HyperEVM, achieving cross-environment asset utilization.

Hyperliquid Roadmap: Future Development of the EVM and Bridge

1. Full Launch of HyperEVM

HyperEVM is a core component of Hyperliquid’s future development. Currently, HyperEVM’s testnet is online and has received participation from numerous validators, including prominent institutions such as Chorus One, Figment, B Harvest, and Nansen. HyperEVM will provide developers with a completely open environment, enabling them to build applications that seamlessly integrate with Hyperliquid’s core trading functions.

Unlike RustVM, HyperEVM is entirely permissionless, allowing any developer to build applications and issue assets (including fungible and non-fungible tokens). HyperEVM has interoperability with Hyperliquid L1; for example, L1’s native oracles can be used by HyperEVM, and certain assets can be transferred between the two virtual machines.

2. Expansion of Cross-Chain Bridging Functionality

Currently, Hyperliquid primarily achieves asset transfers through bridging with Arbitrum. In the future, the platform plans to expand bridging functionality to support more blockchain networks, enhancing cross-chain interoperability, allowing more users to conveniently transfer assets to the Hyperliquid platform, thereby expanding the user base and liquidity.

3. Enhanced Market-Making System

Although the HLP (Hyperliquidity Provider) vault already provides considerable liquidity, the team plans to further optimize the market-making system, collaborating with more professional market makers, improving market depth and liquidity quality, reducing slippage for large trades, and enhancing the overall trading experience.

4. Improvement of Decentralized Token Listing Mechanism

Hyperliquid’s HIP-1 standard has implemented a transparent “decentralized token listing” mechanism. In the future, the team plans to further improve this mechanism, enabling the community to more directly participate in new token listing decisions while maintaining the fairness and transparency of the listing process.

Hyperliquid vs dYdX, GMX and CEXs: Competitive Analysis

Hyperliquid faces competition from various sources in the decentralized trading platform space, including traditional centralized exchanges (CEXs) and other decentralized exchanges (DEXs). Below is a comparative analysis of Hyperliquid with its main competitors:

Hyperliquid vs. Centralized Exchanges

• Trading Speed Comparison: Hyperliquid’s trading speed approaches that of centralized exchanges, with sub-second transaction confirmations nearly eliminating the latency issues typically faced by decentralized exchanges.
• User Experience: Hyperliquid provides a one-click trading experience similar to centralized exchanges, eliminating the need for signing confirmations for each transaction, greatly reducing operational complexity.
• Decentralization Advantages: Unlike centralized exchanges, Hyperliquid doesn’t require KYC, and users maintain complete control over their funds, avoiding the security and regulatory risks that centralized exchanges may face.
• Fee Structure: Hyperliquid’s fee structure is similar to centralized exchanges, but all fees flow to the community rather than platform operators, creating a more equitable distribution of benefits.

Hyperliquid vs. Decentralized Exchanges

• Technical Architecture: Hyperliquid runs on its own L1 blockchain, while most decentralized exchanges are built on existing chains like Ethereum, Arbitrum, or Avalanche, allowing Hyperliquid to optimize the entire technology stack and achieve higher performance.
• Order Book vs. AMM: Unlike GMX, which uses an AMM model, Hyperliquid employs a fully on-chain order book, reducing slippage and providing more precise price execution.
• Trading Experience: Compared to other DEXs that require frequent signing confirmations, Hyperliquid’s one-click trading functionality offers a smoother user experience.
• Market Share: In the decentralized derivatives trading market, Hyperliquid has maintained a leading position since June 2024. Over the past two months, the gap between Hyperliquid and other decentralized derivatives exchanges has widened further, reaching a significant scale.
• Ecosystem Integration: Through HyperEVM, Hyperliquid provides more complete ecosystem integration capabilities, enabling developers to build applications deeply integrated with trading functions, while most competitors lack similar extensibility.
• Capital Pool Structure: Compared to GMX’s GLP, Hyperliquid’s HLP adopts more flexible strategies, acting both as a counterparty for platform trades and adjusting strategies to adapt to market changes.
• Validator Network: Although Hyperliquid’s validator network (approximately 16 validators) is relatively small, its performance surpasses most competitors, while continuously attracting more institutional participation in validation.

Hyperliquid vs. dYdX

• Trading Speed: Both Hyperliquid and dYdX offer low latency, but Hyperliquid’s sub-second confirmation times and one-click trading experience may provide advantages in certain scenarios.
• Technical Independence: dYdX is built on Cosmos SDK, while Hyperliquid has a completely self-built technology stack, offering greater technical autonomy and customization space.
• Scalability: Hyperliquid, through HyperEVM, provides broader application development possibilities, while dYdX primarily focuses on trading functions.

How to Buy Hyperliquid (HYPEEVM): Step-by-Step Guide with MEXC

MEXC is an ideal choice for purchasing HYPEEVM. Here are the detailed steps for buying HYPEEVM on MEXC:

• Register a MEXC Account: First, visit the MEXC official website and complete the registration process.
• Deposit Funds: Deposit USDT into your MEXC account.
• Find the HYPEEVM Trading Pair: Type “HYPEEVM” in the search bar, and you’ll see the HYPEEVM/USDT trading pair.
• Place an Order: Determine the amount and price of HYPEEVM you want to purchase, then confirm the transaction.

Special Considerations

When purchasing HYPEEVM, please note the following important information:

• HYPEEVM is Based on the HYPEEVM Chain: The HYPEEVM traded on MEXC is based on the HYPEEVM chain, with its block explorer at https://hyperliquid.cloud.blockscout.com/.
• Avoid Incorrect Transfers: Deposits made through other chains may result in asset loss, so it’s essential to correctly distinguish and use the HYPEEVM chain for operations.

Conclusion

Hyperliquid, as a high-performance decentralized trading platform built on its proprietary Layer-1 blockchain, is redefining the standards of cryptocurrency trading with its innovative technical architecture and user-friendly design. Through the HyperBFT consensus mechanism and fully on-chain order book, Hyperliquid successfully combines the speed advantages of centralized exchanges with the transparency and security of decentralized systems, creating an unprecedented trading experience for users.

Hyperliquid has already demonstrated significant advantages in trading speed, user experience, and economic model, but also faces challenges such as technical risks, market volatility, and regulatory uncertainties. Continued innovation by the team, active community participation, and the continuous expansion of the user base will be key factors determining Hyperliquid’s future success.

For investors, HYPEEVM represents an opportunity to participate in the growth of this innovative platform. Through secure and reliable trading platforms like MEXC, investors can conveniently purchase HYPEEVM tokens, but must be careful to correctly distinguish the HYPEEVM chain to avoid asset loss due to incorrect operations.

Join the HYPEEVM Airdrop and Win with the High-Performance Trading Platform!

Looking for the next on-chain trading revolution? Hyperliquid is causing market excitement with its sub-second transaction confirmations and zero gas fees! MEXC is currently hosting a HYPEEVM airdrop event, where completing specified tasks allows you to participate in reward distribution. Don’t miss this opportunity – log in to the MEXC platform now and position yourself early in this innovative project that combines centralized speed with decentralized security!