What is Hyperliquid (HYPE)?

We've been hearing a lot about "a fully on-chain perpetual DEX" in the crypto world for a while now. Hyperliquid is one of the projects that truly embodies this definition. Launched in 2023, Hyperliquid aims to offer futures (more commonly, perpetual trading) with the speed and practicality we're accustomed to from centralized exchanges (CEX), but this time entirely on-chain. This means transactions are transparent and traceable, and your funds remain in your wallet. You don't have to entrust your assets to an exchange, nor do you have to worry about "do I need to reconfirm the gas fee before canceling this order?"

The team behind the project is quite competent. Jeff Yan is the CEO and co-founder of Hyperliquid, a decentralized exchange.

One of the key things that distinguishes Hyperliquid from its peers is that it has developed its own layer-1 blockchain. In other words, they built their own infrastructure from scratch, unencumbered by the constraints of Ethereum or any other chain. This allows both the order book and the matching engine to run entirely on-chain. This makes Hyperliquid one of the most up-to-date and clear examples of what a truly on-chain perpetual DEX is.

Of course, this introduction is just the beginning. In the rest of this guide, we'll answer all your questions, such as "How does Hyperliquid work?", "What does the HYPE token do?", and "What is the Hyperliquid hype?" step-by-step. We'll also delve into details like what the Hyperliquid coin does, when the HYPE token was released, and the Hyperliquid governance structure. This means we'll both satisfy your technical curiosity and gain a deeper understanding of how the platform became so popular.

Hyperliquid's Definition and Origins

Hyperliquid is an example of an on-chain derivatives exchange running on its own dedicated layer-1 blockchain infrastructure. The core of the platform is an on-chain order book and matching engine. This way, all buy and sell orders, matching transactions, and liquidations are recorded on the blockchain. What is an on-chain perpetual DEX? To briefly explain, an on-chain perpetual DEX is a decentralized exchange offering perpetual futures services, where all orders and transactions occur on the blockchain. This model ensures transparency and traceability of transactions while offering full control over user funds.

The Hyperliquid platform first appeared in 2023. At its launch, many in the industry were surprised by Hyperliquid's speed. It turns out that the Hyperliquid team built the product on a custom Layer-1 blockchain they developed from the very beginning. In other words, instead of relying on an existing blockchain like Ethereum or Solana, they directly created an independent blockchain focused on performance. They used a specialized consensus algorithm called HyperBFT to achieve this. Thanks to this algorithm, block confirmation times are reduced to sub-seconds, and tens of thousands of transactions can be processed per second. In short, Hyperliquid operates on an infrastructure designed from the ground up for high-speed transactions and low latency.

Since 2020, the team, which has been running its own market-making strategies in the crypto markets, turned to the DeFi space in the summer of 2022, observing the shortcomings of decentralized exchanges. The technical issues, inefficient designs, and poor user experience they encountered led them to develop Hyperliquid. Ultimately, the idea of a fully on-chain orderbook DEX on a high-performance decentralized L1 platform was realized.

This approach provided Hyperliquid with a significant advantage: offering CEX-like speed and ease of use in a decentralized environment. Users can execute their transactions with a single click, as if they were in the Binance interface, without having to confirm them with a wallet like MetaMask. Transparency is ensured as transactions are recorded on the blockchain, while orders are instantly matched thanks to Hyperliquid’s private chain in the background, turning perpetual trading into a seamless experience.

Hyperliquid's History: Key Milestones

Despite its relatively short existence in the crypto world, Hyperliquid has made significant strides and gained significant momentum. Emerging at a time when decentralized derivatives markets were being reshaped, the project surpassed many of its competitors with its technical infrastructure and visionary approach. Several defining events and strategic moves stand out throughout the platform's development that brought it to its current position. These milestones are crucial for understanding both why Hyperliquid has grown so rapidly and for better understanding the vision of the team behind it. Let's examine these developments chronologically:

• 2023: The Hyperliquid platform's mainnet launch took place. The first on-chain perpetual transactions were launched on its own proprietary blockchain.
• Late 2023: The total asset value locked (TVL) on the platform increased significantly, and community interest rose rapidly. Hyperliquid began to make a name for itself in the DeFi community towards the end of the year. January 2024: The Hyperliquid team officially announced the arrival of the HYPE token, the platform's native token. The community learned the first information about the upcoming airdrop and the token economy during this period.
• Q2 2024: Details of the airdrop program and governance model for the HYPE token were introduced. Users were given the opportunity to accumulate points as they used the platform and use these points towards future token distribution. This established a large user base even before the token's launch, laying the groundwork for participation in the platform's governance.
• Mid-2024: The number of listed trading pairs exceeded 150. This metric made Hyperliquid the largest perpetual DEX in the industry. Futures markets opened for many major and minor cryptocurrencies. This diversity attracted both individual and institutional investors, further increasing the platform's volume.
• November 2024: For those wondering when the HYPE token was released, this date is the answer. The official launch date for the HYPE token is November 28, 2024. On this date, Hyperliquid launched a massive HYPE airdrop, with a total supply of 1 billion HYPE tokens. Early adopters received 31% of the total supply (approximately 310 million HYPE) for free. This airdrop reached 94,000 users, making it one of the most widely participated distributions in crypto history and worth $1.2 billion at current prices. Around the same time, Hyperliquid officially launched its on-chain governance model alongside the token.
• 2025: According to DeFiLlama, the total value locked (TVL) of Hyperliquid's Layer 1 blockchain, HyperEVM, reached almost $2 billion in just five months. According to Dune Analytics, since the end of May, HyperEVM has processed between 200,000 and 400,000 transactions per day. During this period, the number of daily active users (DAU) generally hovered between 15,000 and 20,000. By 2025, the HYPE price is hovering between $35-$40.

Why is Hyperliquid Valuable?

Key features that distinguish Hyperliquid from its peers and add value to it include:

A fully on-chain architecture

Hyperliquid's entire transaction infrastructure, including the order book and matching engine, runs on the blockchain. This ensures transparent transactions, and user assets are not held by the platform but are secured in your own wallet. Instead of the liquidity pool logic of traditional decentralized exchanges (e.g., AMMs like Uniswap), Hyperliquid offers real-time price discovery using a fully on-chain order book DEX model.

Its own dedicated layer-1 infrastructure

Hyperliquid runs on an independent layer-1 blockchain specifically designed for performance, meaning it is not dependent on another chain or layer-2 solution. Thanks to the customized HyperBFT consensus at the blockchain level and high scalability, it can process tens of thousands (theoretically hundreds of thousands) of transactions per second. Because it is not subject to the constraints of another chain, the platform's development direction is entirely under the control of the team and the community.

High transaction speed and low latency

Hyperliquid's infrastructure offers speeds comparable to those of a centralized exchange. Block times average around ~0.2 seconds, and transactions are finalized instantly. This means buy and sell orders are matched virtually without delay. During perpetual trading, price slippage is minimal, and thanks to its deep liquidity, market impact remains low even on large transactions. This performance makes Hyperliquid particularly attractive to professional traders pursuing high-frequency trading strategies.

HYPE token governance and incentive mechanism

HYPE is the native token of the Hyperliquid platform (also known as Hyperliquid coin). This token serves as a governance and incentive tool on the platform. HYPE holders can vote on proposed changes to the protocol, giving them a say in Hyperliquid's future. The HYPE token is also used to pay transaction fees on the network and provides staking opportunities, earning rewards for long-term holders. For example, with the staking program launched at the end of 2024, HYPE holders began earning annual returns of ~2-3%. In short, HYPE is both the administrative and economic fuel of the Hyperliquid ecosystem.

Community-Driven and Fair Distribution Model

Hyperliquid's development process and token economy are designed to center community interests. The project has not received any venture capital (VC) investment; it was launched entirely self-funded by the team. This allows decisions to be made based on the long-term interests of the community and the project, without external investor pressure. HYPE token distribution is also extremely community-friendly: approximately 76% of the total supply of 1 billion tokens has been allocated directly to the community. The initial genesis airdrop distributed 31% to active users, while the remaining 45% was reserved for future rewards and mining/liquidity incentive programs. The share allocated to the team and foundation does not exceed 24%, and this portion is locked long-term (team tokens are locked until the end of 2025, with a slow release scheduled for 2027-2028). This equitable distribution model ensures that control of the platform and its revenues are largely shared by users and the community.

Considering the above points, the answer to the question, "What is the use of Hyperliquid coin?" on many people's minds becomes clear. The HYPE token is a critical tool that gives users a voice in the Hyperliquid ecosystem and incentivizes them to contribute. Thanks to this token, the platform combines decentralized governance with a high-performance trading experience.

Who is the Founder of Hyperliquid?

Who is the Founder of Hyperliquid? Hyperliquid Labs was founded by Jeff Yan and Iliensinc, two Harvard classmates. This core duo was joined by experienced individuals from prestigious educational institutions and financial giants such as Caltech, MIT, Citadel, and Hudson River Trading. The team boasts a strong profile in terms of technical knowledge, which is clearly reflected in the platform's architecture and performance.

Jeff Yan, one of the founders, was also a co-founder of Chameleon Trading, a platform that previously operated in a centralized exchange format. However, the collapse of FTX in 2022 caused a major shakeup in confidence in the industry. Trust in centralized exchanges was severely damaged, and a significant gap emerged in the derivatives market. It was during this period that Jeff Yan and his team set out to develop a new structure based on decentralization. This vision paved the way for the birth of Hyperliquid.

From the outset, Hyperliquid Labs chose not to seek funding from external investors, particularly venture capitalists (VCs). This choice allowed the team to remain independent and focus solely on product development, improving the user experience, and providing an efficient infrastructure. In other words, they were driven by technical excellence and the goal of creating solutions that benefit users, not by commercial pressures.

Funded by their own resources and opting for direct, community-driven growth, the team holds the platform's future entirely in their own hands.

While the founding team initially developed the platform with a centralized structure, they aim to transition to a fully decentralized governance system in the long term. Hyperliquid even stated from the outset that it planned a DAO model. To this end, they established voting and decision-making mechanisms through the HYPE token. As part of Hyperliquid's governance structure, significant protocol changes or updates are put to a community vote. As the project grows, the question "Who owns Hyperliquid?" increasingly becomes a question of "the community." Team members, meanwhile, maintain the protocol's technical development behind the scenes and regularly update the community. They maintain transparent communication through published technical documentation, roadmaps, and development proposals called Hyperliquid Improvement Proposals (HIPs).

Frequently Asked Questions (FAQ)

Below, you can find frequently asked questions and answers about Hyperliquid:

• What is Hyperliquid and how does it work?: Hyperliquid is a decentralized perpetual trading exchange operating on a self-developed layer-1 blockchain. All transactions and orders occur on-chain; the platform matches buyer and seller orders using an on-chain order book. This allows users to trade at speeds similar to centralized exchanges, while maintaining full control of their funds and transparently recording the entire process on the blockchain.
• What does the HYPE token do?: The HYPE token (also called Hyperliquid coin) is the native cryptocurrency of the Hyperliquid ecosystem and serves multiple functions. First, it provides a voice in platform governance: HYPE holders can vote on important decisions and shape the future of the protocol. The HYPE token is also a payment instrument that enables low-fee transactions and offers users the opportunity to earn passive income (rewards) through staking.
• Who is the founder of Hyperliquid?: Rather than having a single founder, Hyperliquid was founded by an anonymous team of experienced developers. The team members have previously worked at leading institutions in finance and blockchain, such as Citadel Securities, Jane Street, and Offchain Labs. Currently, the management of the platform is gradually being transferred to the community; this means that the ultimate owners of Hyperliquid will be HYPE token holders and the user community.
• Is Hyperliquid centralized or decentralized?: Hyperliquid aims for a fully decentralized structure. Because all transactions occur on the blockchain, users control their own funds, making the platform non-custodial. While a team operates the network's validators in the early stages, the plan is to add more independent validators over time, and to hand management over to the community through the DAO model. Therefore, while its infrastructure is a private chain, its operating principles and management make Hyperliquid a decentralized exchange.
• What's the difference between Hyperliquid and GMX or dYdX?: The key difference between Hyperliquid and popular decentralized derivatives exchanges like GMX and dYdX is its infrastructure and liquidity model. GMX operates on networks like Arbitrum and uses the AMM (automated market maker) model; liquidity is pooled and prices are determined by oracles. dYdX, on the other hand, was initially a layer-2 solution with an off-chain order book but is now attempting to increase decentralization by migrating to its own independent chain (based on Cosmos). Hyperliquid, on the other hand, uses a fully on-chain order book and operates on its own high-performance L1 chain. This allows Hyperliquid to optimize where both GMX and dYdX partially compromise: it offers significantly lower latency and deeper order book liquidity compared to GMX, while providing greater transparency and composability (interaction with other DeFi protocols) compared to dYdX thanks to transactions remaining on-chain. In short, Hyperliquid distinguishes itself from its competitors by striking a balance between CEX-level speed and full decentralization. The general differences between Hyperliquid and other DEXs can be illustrated in the following table:

Feature	Hyperliquid	GMX	dYdX (v4)
Infrastructure	Custom Layer-1	Arbitrum / Avalanche	Cosmos Appchain
Liquidity Model	On-chain Orderbook	GLP (AMM)	Orderbook (Off-chain v3, On-chain v4)
Execution Speed	High (~0.2 sec)	Medium	High
On-Chain Settlement	Fully on-chain	Partially off-chain	Fully on-chain
Token Distribution	Community-focused	VC-backed	VC-backed
Governance	DAO (via HYPE token)	DAO (legacy)	dYdX DAO

• What is the future of Hyperliquid?: Hyperliquid is a promising project, having quickly become a leading decentralized derivatives market leader. By 2025, the platform's total trading volume will exceed $1 trillion, and its HYPE token market capitalization will reach levels that will place it among the top 20 crypto assets. Experts predict that Hyperliquid will expand its ecosystem with innovations like HyperEVM in the coming period, and developers will build more DeFi applications on the network. Furthermore, as governance mechanisms mature and network validators become decentralized, Hyperliquid could become a fully community-driven protocol. Of course, there are competitive landscapes and technical challenges, but Hyperliquid is well-positioned to address these challenges with both its technology infrastructure and community support. As a result, Hyperliquid is expected to continue to grow as a leading decentralized futures platform in the DeFi space.

For more information on Hyperliquid and similar decentralized derivatives protocols, follow our JR Crypto Guide series.