Why is Hyperliquid more successful than other Perps DEXs?
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Why is Hyperliquid more successful than other Perps DEXs?
Not seeking funding, not chasing listings on major exchanges, and not deliberately spending money on ads—taking a bottom-up approach is more likely to gain favor in this market cycle.
Navigating Web3 tides with focused insightsAuthor: CM
The most discussed topic today is why @HyperliquidX has succeeded more than other Perps platforms. Here's my firsthand take on $HYPE, in one continuous thread 🧵
1. Technical Mechanism Perspective
The key lies in the Vault system—a mechanism also seen in GMX and Jupiter—but Hyperliquid’s version is an evolved one, featuring both Protocol Vaults (HLP) and User Vaults, opening doors to diversification.
The emergence of diversified Vaults also solves liquidity issues for long-tail assets. Trading long-tail assets is the core competitive advantage of Perps DEXs over CEXs, and a problem many competitors are still trying to crack.
Furthermore, as a blockchain with composability, Hyperliquid skipped the transitional phase from protocol to chain entirely, jumping straight into the endgame—unlocking significant valuation potential and imagination premium.
2. Market Perspective
Let’s highlight several strengths—elements that many projects could learn from:
(1) No fundraising, no pursuit of major exchange listings, no heavy ad spending—its bottom-up approach resonates well in this market cycle.
(2) Generous with airdrops.
(3) No PUA tactics. While there were early controversies around score dilution, overall the process was clean, without endless loops of tasks followed by NFT sales and similar fatigue-inducing schemes.
(4) Positioned as a "chain," creating room for imagination and valuation. Hyperliquid is technically a blockchain, enabling various DeFi and Perps combinations such as stablecoins, lending, etc. This led to an interesting shift: initially, people compared $HYPE’s valuation with other Perps DEXs, but soon realized it was more appropriate to compare it with Layer 1 blockchains. This upward repositioning created a unique sense of surprise, further fueling market sentiment.
(5) Branded as the “on-chain Binance,” a highly compelling narrative. In the current market, DeFi protocols like DEXs, lending platforms, and stablecoins have each secured their place—only the Perps sector remains underdeveloped. Hyperliquid thus fulfills the expectation of being the final missing piece of DeFi.
Summary
Market dynamics are uncontrollable—timing, luck, and execution are hard to replicate. But technical mechanisms are concrete. For now, unless there's a major breakthrough, Vaults for Perps are what AMMs were for DEXs. Even dYdX has recently introduced Vaults. Expect increasing innovation focused on different forms of Vaults going forward. This mechanism has solidified the position of Perps platforms—they may no longer be seen as promising yet stagnant showcases, but as real contenders in the ecosystem.
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