By Maggie @Foresight Ventures
From 2024 to 2025, Hyperliquid has risen at an astonishing speed and has become a major liquidity gathering place on the chain. Its total open interest has exceeded 10.1 billion US dollars, and the USDC locked position has exceeded 3.5 billion US dollars. Whales such as James Wynn have shown their skills here, leveraging hundreds of millions of dollars of positions with 40 times leverage, driving market sentiment and harvesting liquidity. At the same time, the launch of HyperEVM has further expanded the ecosystem and attracted multiple innovative projects to settle in.
Today, we delve into two key questions:
1. How did Hyperliquid rise to prominence?
2. What are the ecological projects on HyperEVM that are worth paying attention to?
How did Hyperliquid rise to prominence?
Hyperliquid is a high-performance decentralized exchange (DEX) that focuses on spot and perpetual contract trading, and has launched HyperEVM, an EVM L2 on Hyperliquid. Most people learned about Hyperliquid from the huge airdrop in November 2024. Before that, many people only thought it was an ordinary perp dex. Later, everyone gradually understood the special features of Hyperliquid.
technology:
A decentralized exchange without KYC, but with a CEX experience: Hyperliquid does not require users to undergo KYC verification, allowing users to trade anonymously, attracting privacy-conscious traders and regulatory-sensitive institutions. Hyperliquid provides a CEX-like user experience (speed, UI/UX) but without identity verification, lowering the barrier to entry.
product:
Low fees, high leverage: Market maker fee is 0.01%, taker fee is 0.035% (as low as 0.019% for large customers). Supports 50x leverage, which is much higher than most DEXs (such as 20x on dYdX).
High-yield HLP vault: HLP offers an annualized rate of return of 14%-24%. By depositing USDC, users can participate in market making and liquidation income, which attracts DeFi users who seek stable income. HLP's community-oriented design (no team commission) further enhances user trust.
Community-oriented and deflationary mechanism: All fees are allocated to the community (HLP and Assistance Fund), not the team or insiders, which enhances the decentralization attribute. Buybacks and destruction effectively reduce the circulating supply and support long-term value growth.
marketing:
High-proportion airdrop and wealth effect: The 31% HYPE airdrop in November 2024 (310 million HYPE, worth $1.2 billion) is one of the largest airdrops in crypto history. The airdrop is based on user transaction volume and referral points, which incentivizes early user participation and enhances loyalty. The HYPE price soared from $3.9 to $27 (up to $34.96), creating a significant wealth effect and attracting more users to join.
Whale effect, attention economy: Hyperliquid's opening information is transparent, however, this transparency coexists with manipulability. On the one hand, the openness of on-chain data makes whale positions invisible, and retail investors can use it to track the movements of smart money; on the other hand, whales use this transparency to reversely manipulate the market. Traders such as James Wynn use Hyperliquid's high leverage (40-50 times) and transparency to disclose large positions (such as $568 million in BTC long orders), attract follow-up funds, and form a "position-sentiment-price" positive feedback.
Economic model:
Income closed loop and deflation mechanism: Platform income is returned to token holders or ecosystem participants through repurchase, destruction, dividends, etc., forming a positive cycle of "usage growth → income growth → token value increase".
Hyperliquid's main source of income comes from platform fees and HIP-auction fees.
Platform Fees: Includes spot and perpetual contract fees (market maker fee 0.01%, taker fee 0.035%, and high-volume users can go as low as 0.019%), funding rate, and liquidation fee.
HIP-1 Auction Fee: New tokens listed through the HIP-1 standard must pay an auction fee, all of which goes into the Assistance Fund.
The handling fee is allocated to the HLP and the Assistance Fund.
46% is distributed to HLP depositors as market making and liquidation proceeds.
54% goes into the Assistance Fund for HYPE repurchase and destruction.
The dual deflation mechanism (buyback + destruction) enhances the value stability of HYPE.
The Assistance Fund regularly uses the accumulated USDC to repurchase HYPE in the secondary market, creating continuous buying pressure.
The HYPE portion of the HYPE-USDC trading pair in spot trading is directly destroyed to reduce the circulating supply.
Many projects want to emulate this model, but in fact it is not suitable for most projects because they do not have the prerequisites required for this model. 1. Insufficient income. Most projects have an annual income of less than 1 million US dollars, and even if the return ratio reaches 100%, it will have limited impact on the coin price. 2. The tokens of most projects lack use value support. 3. No cost structure advantage. As a derivatives platform, HyperLiquid has a lower marginal cost than DeFi projects that require a large amount of liquidity mining subsidies.
Ecology:
As Hyperliquid's EVM compatible with L2, HyperEVM attracts DeFi projects to migrate and form a diverse ecosystem of derivatives + lending + Meme.
In general, the rise of Hyperliquid is the result of multiple factors: technology (no KYC required, near CEX trading experience) + product (low fees, high leverage, high-yield HLP vault) + marketing (large airdrop, whale effect) + economic model (revenue closed loop, buyback deflation) + ecology (HyperEVM). It is particularly worth learning from its marketing strategy and economic model design. However, we need to be wary of two major risks: 1. Regulatory pressure: In an increasingly stringent compliance environment, the no KYC model may face major challenges. 2. Cycle test: The revenue structure is sensitive to market activity, and the sustainability of the business model in a bear market environment remains to be verified.
What are the ecological projects on HyperEVM that are worth paying attention to?
As of May 31, 2025, data on DefiLIama showed that the HyperEVM ecosystem TVL reached US$1.8 billion, covering lending, DEX, Meme and other tracks.
(Data from DefiLIama: https://defillama.com/chain/hyperliquid-l1)
1. HyperLend
HyperLend is a lending project on HyperEVM. Its TVL has reached 370 million US dollars. It is the top project on HyperLiquid and one of the three DeFi packages. Website: https://hyperlend.finance/
Currently, a large number of wstHYPE and WHYPE are being pledged on HyperLend to earn interest. However, as the HyperEVM ecosystem is still in its early stages, the overall demand for borrowing is low, resulting in a low APR for the time being. As more applications are implemented, the user base expands, and leverage demand increases, borrowing demand is expected to increase, thereby pushing up the APR for borrowing.
HyperLend's lending framework has a three-tier lending architecture that is flexible and focuses on risk isolation. It supports both peer-to-pool mode and peer-to-peer mode. It is divided into:
Core pool: multiple assets share liquidity, suitable for conventional lending scenarios;
Independent pool: contains only two types of assets to achieve risk isolation and prevent the spread of cross-asset risks;
Peer-to-peer pools: Lenders and borrowers are matched directly, with customizable interest rates and terms, and interest rates are usually higher.
It also supports flash loans: unsecured, repayment within a single block, and supports high-frequency arbitrage and liquidation
After users deposit assets, they will receive yield tokens (hTokens), which represent their deposit principal plus accumulated interest. Accounting positions are tracked through debt tokens (DebtTokens), which accumulate interest over time to ensure a transparent and traceable process.
In addition, HyperLend works with HyperLiquid to allow users to borrow additional assets using hHLP as collateral and earn interest, thereby improving the efficiency of HLP fund utilization and bringing additional benefits to users.
HyperLend has established partnerships with multiple DeFi projects, including RedStone, Pyth Network, ThunderHead, Stargate, and Theo Network, enhancing its interoperability and influence in the Hyperliquid ecosystem.
HyperLend has launched a points reward program where users earn points by using the protocol and may receive token airdrops in the future.
2. Hypurr Fun
Hypurr Fun is a meme launch platform on HyperEVM. It provides Telegram robots and web interfaces to facilitate users to conduct transactions quickly. It is currently a major traffic entrance on HyperEVM. Website: https://hypurr.fun/
The main features are:
One-click issuance and trading: Users can easily issue new tokens and participate in transactions through robots.
Advanced trading tools: Support for TWAP (time-weighted average price), automatic sniping, and portfolio management.
Profit repurchase mechanism: All transaction fees will be used to repurchase $HFUN tokens to enhance its market value.
Community interaction: Provide social features such as Whale Chats to promote communication between users.
$HFUN is the native token of Hypurr Fun, with a maximum supply of 1 million.
3. HyperSwap
HyperSwap is a low-slippage AMM on HyperEVM.
The main functions are:
Token Trading: Supports the exchange of multiple tokens, providing a fast and low-slippage trading experience.
Liquidity provision: Users can create and manage liquidity pools to earn transaction fees and platform rewards.
Token issuance: Allows users to issue their own tokens in a permissionless environment.
HyperSwap adopts a dual-token model, namely $xSWAP (liquidity mining token) and $SWAP (governance and revenue sharing token). Users obtain $xSWAP by providing liquidity and can convert it into $SWAP to participate in platform governance and revenue distribution.
In addition, HyperSwap has launched a points program where users accumulate points through activities such as trading, providing liquidity, and issuing tokens.
Summarize
The rise of Hyperliquid is the result of multiple factors such as technology, products, marketing, and economic models. Its marketing strategy and economic model design are particularly worth learning. However, we need to pay attention to the two risks of regulatory pressure and cyclical tests. The HyperEVM ecosystem is in its early stages and is developing rapidly.
