Hyperliquid: The "On-Chain Binance" Unveiled

Hyperliquid launched in 2023, focusing on an on-chain derivatives trading platform that offers a more decentralized exchange option.

Hyperliquid, a decentralized derivatives trading platform, launched in 2023 with the goal of creating a fully integrated financial hub. As part of its strategy, Hyperliquid began airdropping a total of $1.2 billion worth of $HYPE tokens to early users on 2024/11/29.

With the price of $HYPE reaching $3.9 at the time of the airdrop and peaking at $34 on 12/24, the FDV market cap reached $34 billion, roughly a quarter of BNB's market cap. Notably, despite being historically the highest-value airdrop, the team stated that they did not conduct any fundraising, which stands in stark contrast to the accumulated trading volume and revenue generated by the token before its issuance.

In addition to the airdrop wealth myth, several well-known projects have successively auctioned the HIP-1 token for $300,000 to $500,000 to gain the opportunity to list on Hyperliquid, attracting widespread attention in the CT circle, leading to a desire to gain a deeper understanding of what is referred to as the "on-chain Binance."

The Hyperliquid team background

The document introduces that the Hyperliquid team was founded by Jeff and iliensinc, with only Jeff publicly attending interviews and posting comments on X. Jeffrey Yan graduated from Harvard with a degree in mathematics, previously worked as a software engineer at Google, and was responsible for developing trading algorithms at the Wall Street trading firm Hudson River.

In 2020, he established the quantitative trading company Chameleon Trading, until 2022 when he realized that the team had reached the limits of high-frequency market making and began exploring opportunities in DeFi.

Jeff stated that after the FTX collapse, people suddenly had real reasons to distrust centralized exchanges and began to think about what could be done with existing resources. The idea of establishing Hyperliquid began to take shape, and the official Medium published "Introducing Hyperliquid: your new home to trade perps on DeFi," which aims to build an on-chain Perp DEX based on Tendermint.

In April 2023, it was announced that Hyperliquid L1 would be established because, during the investigation of existing L1 solutions, it was found that none could meet the low latency and TPS requirements needed to establish an on-chain exchange. Thus, it was decided to create an L1 focused on high-performance derivatives trading, initially concentrating on optimizing efficiency and throughput.

How to use Hyperliquid?

Hyperliquid primarily offers derivatives and spot trading. Users can deposit USDC on Arbitrum for trading, with fees and gas costs paid in USDC. Users can also deposit USDC into the HLP Vault to earn yields or stake HYPE to receive HYPE from validator nodes. All operations are covered in the instructional video.

How to stake HYPE with HyperCollective

The Hyperliquid Foundation announced that HYPE Staking will officially open on 2025/12/30, with 16 validators joining. Among them, the Nansen x HypurCollective node has accumulated 30 million HYPE, with a total value of $600 million staked in that node, making it the largest unofficial validator node (the top 5 is Hyper Foundation).

Hyperliquid ecosystem projects

The HYPE ecosystem mainly represents tokens of memes and community culture: VAPOR, FARM, PURR, HCR…

HypurrFun

The Pump.fun of the Hype ecosystem requires participation through the Hypurr Fun bot, where users can check the projects being raised in the Telegram group or on the hypurr.fun website. Users participate using USDC, and if the cumulative amount in the current pool exceeds 65% of the current auction price, a new token will be bid to participate in the auction, launching on Hyperliquid.

Since Hyperliquid currently does not have smart contracts, the implementation of the Bonding Curve is done through off-chain calculations. Users send USDC to a designated address for purchase, and off-chain calculates the current token balance based on the Bonding Curve. After a successful auction, liquidity is created on Hyperliquid and allocated to participating addresses.

Recommended reading is the information organized by @chrischang43, as publicly available mechanism information is very hard to find.

Recently, the HCR, which focuses on technical analysis, has gained some attention and has interacted with Aixbtx on Twitter, although its replies tend to be lengthy and uninteresting, which the market does not seem to favor.

Hypurr Fun: https://app.hypurr.fun/

Hypur Fun Bot: https://t.me/HypurrFunBot?start=ref_98ca8973

Hyperlend

The first native lending protocol of the Hype ecosystem, in addition to basic functions, features support for HLP Vault as collateral, unlocking opportunities for leveraged yields.