Valuation
Hyperliquid has not raised external venture capital funding and remains entirely bootstrapped by its founding team. The company has opted to self-fund development using early trading revenues and the founders' resources, bypassing traditional VC funding models.
The platform introduced its native HYPE token through an airdrop to users rather than a token sale or funding round. This method enabled the team to retain full control over the platform's development and strategic direction without external investor involvement.
Product
Hyperliquid is a fully on-chain decentralized exchange designed to match the speed of centralized platforms like Binance while maintaining transparency and self-custody. Users bridge USDC into the Hyperliquid blockchain, connect their wallet, and trade perpetual futures contracts on a live central limit order book where all matching, liquidation, and settlement occur on-chain.
The platform operates on a custom Layer-1 blockchain built using HyperBFT consensus, which finalizes blocks in approximately 0.2 seconds and supports up to 200,000 orders per second. This infrastructure enables sub-second trade execution comparable to centralized exchanges while ensuring all activity remains verifiable on-chain.
Hyperliquid employs two execution layers: HyperCore manages the order book and clearinghouse logic for margin checks and liquidations, while HyperEVM provides an Ethereum-compatible smart contract environment. This dual-layer system allows developers to build applications that access live order book data without requiring bridges or experiencing delays.
The exchange supports standard order types, including market, limit, stop-loss, and take-profit orders, as well as both cross-margin and isolated margin trading. Users can trade major cryptocurrency perpetual contracts with leverage up to 50x, with all risk management and liquidation processes enforced transparently at the blockchain level.
In addition to trading, Hyperliquid offers social trading through Vaults, where traders can manage pooled capital, and the HLP vault, which functions as a market-making pool. The platform has also introduced spot trading and options contracts, creating a broader derivatives trading ecosystem.
Business Model
Hyperliquid operates as a fully decentralized exchange with a B2C go-to-market model, serving individual traders, institutions, and algorithmic trading firms. The platform generates revenue through trading fees charged on each transaction, typically 0.027% of trading volume across perpetual futures, spot, and options markets.
The business model leverages network effects, where higher trading volumes attract more liquidity providers, which in turn draw traders seeking improved execution. This creates a cycle that has enabled Hyperliquid to capture a significant share of the decentralized perpetuals trading market.
Unlike traditional exchanges that depend on market makers and complex fee structures, Hyperliquid's on-chain order book uses transparent price-time priority matching. The platform shares revenue with users through mechanisms such as the HLP market-making vault, which distributes trading fee revenue to liquidity providers.
The company's cost structure is lean, with a core team of 11 members, allowing a substantial portion of revenue to contribute to profitability. Infrastructure costs are primarily tied to operating custom blockchain validators and maintaining the high-performance trading engine.
Hyperliquid's vertical integration spans the blockchain layer to the user interface, reducing reliance on external infrastructure providers. This approach enhances control over performance and costs while mitigating counterparty risks common in other decentralized exchanges.
The platform is also exploring Exchange-as-a-Service opportunities, enabling other teams to launch dedicated exchanges using Hyperliquid's infrastructure. This initiative could create additional B2B revenue streams beyond direct trading fees.
Competition
Vertically integrated players
dYdX introduced decentralized perpetuals trading with its migration to a Cosmos-based app-chain but experienced a market share decline from 55% in 2023 to single digits by 2025 as Hyperliquid surpassed it in performance and user experience. dYdX retains strengths in US brand recognition and validator reward mechanisms but faces challenges due to slower product development cycles.
Vertex Protocol operates on multiple chains, including Arbitrum and Sonic, and offers centralized exchange-style matching with cross-margin portfolio management. The platform holds approximately 1.4% market share, with $13.7 billion in Q1 2025 volume, serving as a multi-chain alternative to Hyperliquid's single-chain strategy.
Jupiter Perps leads Solana-based perpetuals trading with 85% market share on that chain and $470 million in accumulated fees. Jupiter focuses on retail users through native Solana integration and competitive funding rates, with reports suggesting plans to launch a dedicated chain to compete more directly with Hyperliquid.
AMM-based competitors
GMX developed the multi-asset liquidity pool model with its GLP token but now holds less than 0.2% market share as traders shift to order book-based platforms. GMX prioritizes integration with vault managers and structured products rather than competing on trading speed and efficiency.
Gains Network, Level Finance, and SynFutures represent earlier AMM-based perpetuals platforms that lag behind order book models in execution quality and capital efficiency. These platforms primarily compete on leverage limits and fee rebates rather than the overall trading experience.
Centralized incumbents
Binance remains the largest player in crypto derivatives, with over $1.7 trillion in monthly volume, but faces regulatory challenges that create openings for compliant decentralized alternatives. Hyperliquid's transparent, self-custody model appeals to traders seeking to mitigate risks associated with centralized exchanges.
Kraken and other established centralized exchanges focus on security and regulatory compliance while expanding their derivatives offerings. Their institutional relationships and fiat on-ramps provide advantages over decentralized platforms, though these come at the expense of transparency and self-custody features.
TAM Expansion
New products
Hyperliquid has expanded its offerings from perpetual futures to include options trading and spot markets, broadening its addressable market. The platform now supports complex derivatives strategies and tokenized assets, such as pre-IPO equity options, which target traditional finance markets valued in the trillions of dollars.
The addition of structured products and yield-generating vaults introduces new revenue streams for DeFi users seeking passive income. These products consolidate funding rate flows and market-making returns into accessible investment vehicles that compete with yield products in traditional finance.
Real-world asset tokenization presents a significant growth opportunity by enabling the trading of tokenized stocks, bonds, and commodities. This development could expand the total addressable market beyond cryptocurrency-native assets to include mainstream financial instruments.
Platform expansion
The Exchange-as-a-Service model enabled by HIP-3 allows external teams to launch dedicated exchanges using Hyperliquid's infrastructure, creating new B2B revenue opportunities. This strategy parallels successful platform models in other industries, with potential revenue streams from licensing fees and increased network activity.
Mobile applications with simplified onboarding processes could attract retail traders who prefer app-based platforms over web interfaces. Features such as biometric authentication and gas-abstracted wallets aim to reduce barriers for users unfamiliar with traditional DeFi systems.
Expanding cross-chain bridges to Ethereum, Solana, and other major blockchains would allow users to post diverse assets as collateral without requiring wrapping. This expansion across geographies and asset classes could broaden the platform's user base beyond crypto-native traders.
Institutional adoption
Prime brokerage tools and institutional-grade APIs are designed to attract hedge funds and traditional asset managers seeking decentralized trading infrastructure. The platform's transparent settlement process and self-custody model address institutional concerns about counterparty risk associated with centralized exchanges.
Regulated investment products, such as the Swiss HYPE ETP, provide compliant exposure for traditional investors unable to hold tokens directly. Treasury allocations by public companies further indicate growing institutional interest in the platform's native token.
Compliance infrastructure tailored to various jurisdictions could facilitate entry into markets currently restricted by regulatory uncertainty. White-label solutions for regulated entities offer institutional access while preserving the platform's decentralized architecture.
Risks
Stablecoin disruption: Hyperliquid's position is at risk due to the ongoing stablecoin price competition. Users holding $5.8 billion in USDC deposits may migrate to USDH if competitors provide more favorable revenue-sharing terms. Such shifts could disrupt user workflows and temporarily fragment liquidity as the platform adjusts to incorporating new collateral assets.
Regulatory crackdown: The platform's unregistered status and exclusion of US users expose it to potential regulatory enforcement, which may impose growth limitations or necessitate expensive compliance measures. Heightened scrutiny of decentralized exchanges could lead to restrictions on fiat on-ramps, hinder institutional adoption, or pressure infrastructure providers critical to the platform's operations.
Technical scalability: Although the custom blockchain architecture currently delivers high performance, it remains unproven under the strain of exponentially increasing trading volumes. Potential issues such as network congestion, validator coordination failures, or smart contract vulnerabilities could erode user confidence and allow competitors to gain market share during periods of outages or degraded performance.
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