Hyperliquid Prepares Its EVM Layer For Native Transfers Of Ethereum-Based Tokens

Hyperliquid, the chain for fast derivative trades, is preparing for native transfers of Ethereum-based tokens. The DEX derivative now has two versions of HYPE after launching its EVM layer.

Hyperliquid, the chain for fast derivative trades, is preparing for native transfers of Ethereum-based tokens. The DEX derivative now has two versions of HYPE after launching its EVM layer.

HyperEVM, the Ethereum-compatible platform of Hyperliquid, is already live, though with limited token capabilities. The EVM platform is due for another update to achieve native transfers of ERC-20 tokens. Hyperliquid aims to offer fast on-chain derivative trading, compatible with other token ecosystems, while offering speed and low costs.

With this launch, HyperEVM builds its own L2 system, with execution on its native L1 layer using its usual block consensus. The DEX ecosystem will thus be able to build its own DeFi sector, using HYPE as its main gas token.

Hyperliquid builds its own L2 for scalability, DeFi

Hyperliquid has also allowed for WHYPE, a native, wrapped version of HYPE, which can be used in upcoming DeFi apps. The end goal for HyperEVM is to create an on-chain environment for all financial operations, replacing other less convenient chains.

The HyperEVM launched with no additional tooling, and is currently mostly open to developers. The DEX project managed to survive its initial hype and build up its derivative trading, aiming to become the next big platform for crypto growth. The derivates DEX competes with the meme token trend, offering high-risk derivative trading and DeFi tools.

Following the news of the launch, HYPE retreated from over $25 to $24.05, following the overall market trend. HYPE remains near its usual range for the past three months despite fears that it has reached unsustainable price levels.

The Hyperliquid community noted the lack of pre-announcements and trading ahead of the news, as the chain aims to achieve a reputation for sustainability. HYPE may also be pressured by selling the news, though others expect a new all-time high.

After the recent price of HYPE stabilized, Hyperliquid also retained its recent levels of value locked. It holds over $668M in liquidity while showing its attraction for whale-sized risk-takers. The DEX often carries large-scale derivative positions for BTC and ETH, which allows the protocol to retain a sustainable level of fees.

Additionally, HYPE and WHYPE may expect to retain their value as a gas token for the ecosystem. Hyperliquid and HYPE are still relatively new launches, overshadowed by the other booming assets at the end of 2024. The project continues to evolve, spreading to 130 derivative markets.

Hyperliquid draws in USDC inflows

Hyperliquid has varied versions of its value locked. Based on stablecoin reporting, the L1 chain carries inflows of $2.52B. USDC deposits accelerated in December, and have now achieved a higher baseline level for the past two months.

Hyperliquid has achieved daily trading volumes of over $9B in 24 hours, with a usual baseline of around $3B. Its ecosystem is relatively small compared to other DEXs with more active assets. Hyperliquid has been adding some of the hottest memes to its derivative pairs, immediately adding 3-5X leverage. However, the on-chain derivatives are yet to take off for the new ecosystem.

Hyperliquid is an example that money does not follow chains, but apps. The platform built an L1 together with a native derivative DEX, which immediately brought in users and liquidity.

Activity on Hyperliquid is mostly split between Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), with around $1.6B in open interest for smaller coins and tokens. The derivative DEX is relatively fast in listing new meme tokens, making up a significant part of its activity. The DEX still carries $3.6B in total open interest, with a peak over $4.22B. Currently, BTC and ETH are growing, while SOL open interest is sliding.

Hyperliquid has over 21K daily active traders. While blue-chip coins make the bulk of volumes, in terms of small-scale trades, memes and cheaper assets are the biggest contributors to individual trades. For that reason, the HyperEVM may be helpful in bringing direct token transfers, instead of bridging. The eventual update will also help Hyperliquid carry a native form of USDC for easier transfers with no bridging,