Hyperliquid, a DeFi flagship offering CEX-like experience
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Hyperliquid, a DeFi flagship offering CEX-like experience
800 bucks a point? Can Hyperliquid become the biggest airdrop in history?
Navigating Web3 tides with focused insightsWritten by: Black Swan
Translated by: Alex Liu, Foresight News
Background
Exchanges have always been important, haven't they? They're where trading begins and ultimately become the backbone of the global financial system. But concentrating all power in the hands of a few poses problems.
As things got crazier, everyone thought centralization was the answer. But guess what? We’re entering a new era — an era where a truly decentralized perpetuals exchange with its own L1 blockchain is leading the way: @HyperliquidX. It gives you the speed of centralized exchanges, plus lightning-fast trade execution and deep liquidity.
Now, traders can benefit from that experience while retaining control over their assets, along with the transparency and security inherent in decentralized systems. This is precisely the critical need in DeFi that Hyperliquid addresses.
And Hyperliquid’s significance goes far beyond that.
So, What Is Hyperliquid?
In short, Hyperliquid is a high-performance L1 built from the ground up to enable fast, secure, and low-cost trading. Thanks to excellent user experience, diverse supported assets, and a points program, the flagship orderbook DEX on Hyperliquid L1 has achieved nearly $320 billion in derivatives trading volume since its launch last year.
After using Hyperliquid for six months and trying almost every decentralized perpetuals exchange out there — GMX, Zeta, Drift, LogX, you name it — I can say, perhaps somewhat ironically, that Hyperliquid is like the top student in class. It's faster, offers more features, and provides a superior user experience.
Technical Overview
Hyperliquid Layer 1
Hyperliquid’s blockchain is designed to run a decentralized exchange and support various financial applications. It uses a consensus algorithm called HyperBFT, inspired by Hotstuff. Key advantages of HyperBFT include:
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High Throughput: Capable of processing 200,000 orders per second, far exceeding current limits.
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Non-Blocking Consensus: Allows transaction processing without waiting for prior block confirmations, improving efficiency.
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Fast Block Confirmation: Block production depends only on network latency, enabling faster communication among validators.
Hyperliquid delivers everything users might want:
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High leverage (up to 50x)
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Competitive trading fees
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Multiple order types
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Cross or isolated margin
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Dozens of tradable assets
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Lucrative and customizable vaults
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Referral system
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......
What Is HLP?
Market Making for Everyone
Welcome to the new era of decentralized market making via Hyperliquid’s HLP Vaults.
Hyperliquid launched the HLP Vault, turning market making from an exclusive club for professionals into an open game. Now anyone can participate in liquidity provision by depositing USDC into the HLP Vault, earning annual yields ranging from 0% to 20%.
With HLP Vaults, everyday users can join in and earn a share of trading fees. You no longer need to be part of an elite team or institutional player to enjoy the benefits of market making.
Fee Distribution: The HLP Vault distributes 20% of trading fees to liquidity providers. Shares are allocated based on the proportion of liquidity contributed to the pool.
HIP-1 and HIP-2
Beyond perpetual markets, Hyperliquid also offers a spot market built around two innovations: HIP-1 and HIP-2.
HIP-1 and HIP-2 represent major advancements in DeFi. HIP-1 simplifies token creation and distribution, while HIP-2 ensures liquidity.
HIP-1: Permissionless Token Deployment and Spot Orderbooks
Main Features:
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Permissionless deployment of native tokens
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Creation of on-chain spot orderbooks
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Flexible token distribution mechanisms
Benefits:
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Enables users to create and list new tokens without centralized approval
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Enables customizable token distribution strategies
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Supports community-driven token ecosystems
HIP-2: Enhanced Liquidity Mechanism Concept: Inspired by Uniswap, HIP-2 introduces a new approach to boost liquidity for HIP-1 tokens.
Concept:
A novel mechanism inspired by Uniswap, designed to enhance liquidity in HIP-1 token spot orderbooks.
Main Features:
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Permanent liquidity commitment to specific spot orderbooks
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Fully on-chain liquidity strategy
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Synergy with liquidity from other market participants
Ecosystem and Community
Beyond the technology behind its L1, Hyperliquid possesses something other L1s lack. In a world where nearly every new token seems backed by venture capital, Hyperliquid seized the opportunity for independent growth, prioritizing community-first development. Honestly, their organic growth has been quite impressive.
This community-focused approach has captured the attention and engagement of builders and users alike.
With its futures and spot markets, plus HyperEVM L1, Hyperliquid is far more than just an on-chain perpetuals exchange. The ecosystem is rapidly expanding, with numerous projects launching on the L1.
A group of founders, builders, KOLs, market makers, and advanced users have decided to build on the Hyperliquid ecosystem. Check out their work here: Hyperliquid Ecosystem Map by HypurrCollective
Hyperliquid vs Binance
Sure, Hyperliquid performs well in on-chain trading, but let's be honest — it still has a long way to go before dreaming of catching up to Binance.
Binance handles daily futures trading volumes between $4 billion and $60 billion, while Hyperliquid processes $100 million to $3 billion per day.
The market potential for Hyperliquid is huge, and the road ahead is long — but they’ve only just begun.
According to this chart, Hyperliquid currently accounts for approximately 2% to 3% of Binance’s trading volume.
Hyperliquid Points Prediction
Season Two of the points program ended on October 1st, and now everyone is speculating whether additional seasons will occur before a potential Hyperliquid token launch.
By the end of Season Two, total accumulated points reached an astonishing 51,062,258. The chart below shows how the value of 1 HL point could perform under different token FDVs and airdrop percentages.
Here’s the thing: we might see significant sell pressure at TGE as farmers look to cash out. If I see big discounts, I’ll seize the opportunity to buy as much HYPE as possible. So keep a close eye on Hyperliquid’s TGE — it’s going to be interesting.
Additionally, without VC backing, there’s a chance of a larger airdrop allocation. Some dream of up to 50% of supply going to airdrops.
Since the community is central to the project, I believe a generous 20–25% airdrop is more realistic.
If FDV reaches $2 billion, our target is $9.79 per point.
The $800 / Point Theory – Reality Check
@crypto_adair popularized this theory, which has almost become a meme in crypto. To turn fiction into reality, the following scenario would be required:
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Assume 51 million points, with 50% allocated to point holders at TGE.
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$80 billion FDV peak.
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$80 billion × 50% = $40 billion.
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$40 billion / 51 million points = ~$784 per point
Can Hyperliquid reach such a valuation? It's possible.
Is it likely? That’s another story. To achieve such a sky-high valuation, here’s the strategy:
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Bring in the big players (institutional adoption): Hyperliquid is rolling out the red carpet for institutional investors. It’s like competing with Wall Street for capital — but with decentralization.
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Open the doors to everyone: Hyperliquid isn’t just for the crypto crowd. Its mission is to deliver financial services to underserved regions worldwide. By offering decentralized trading and financial tools to anyone with Wi-Fi access.
Final Thoughts
In recent months, we've seen projects like Starknet and ZKsync still struggling to build loyal communities beyond airdrop hunters.
Maintaining user engagement after the points season ends will be a massive challenge. Yet, Hyperliquid appears to be in good shape. According to The Block, despite the points campaign ending on October 1st, Hyperliquid continues to dominate in trading volume:
Hyperliquid is poised to be one of the most obvious bets of this cycle. You can call me biased, but I’m extremely bullish on this project. I strongly encourage you to try the product and form your own opinion.
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