What is Hyperliquid (HYPE)?

Deep Dive

1. Purpose & Value Proposition

Hyperliquid is designed as a decentralized infrastructure for trading perpetual futures—derivatives without an expiry date. It addresses a key DeFi limitation by offering an experience rivaling centralized exchanges in speed and liquidity, while keeping all transactions and an order book fully on-chain for transparency (Yahoo Finance). This appeals to traders seeking high leverage (up to 50x) without sacrificing self-custody.

2. Technology & Architecture

The platform's efficiency stems from its custom Layer 1 blockchain. It uses a dual-layer architecture: HyperCore is a high-performance, validator-secured order book DEX, while HyperEVM provides a permissionless, Ethereum-compatible environment for smart contracts (RedStone). This separation allows for ultra-fast trade execution (claimed up to 200,000 transactions per second) and deep composability, enabling developers to build complex DeFi applications on top.

3. Tokenomics & Governance

The HYPE token has a maximum supply of 1 billion. Its distribution heavily favors the community, with 31% initially airdropped to users. A defining feature is the protocol's revenue model: up to 97% of trading fees are used to automatically buy back and burn HYPE, creating a deflationary pressure tied directly to platform usage. The token is also used for staking (which offers fee discounts) and governance, such as voting on new market listings through proposals like HIP-3.

Conclusion

Fundamentally, Hyperliquid is a self-funded, high-speed trading ecosystem that uses its HYPE token to align incentives between users, traders, and network security. How will its permissionless market creation framework continue to expand the types of assets traded on-chain?