Author: Nick Sawinyh
Compiled by: Deep Tide TechFlow
Hyperliquid Chain is a high-performance Layer 1 (L1) blockchain that has rapidly emerged in recent years as a powerful engine in the decentralized finance (DeFi) sector.
It aims to redefine on-chain trading and financial applications by providing the speed and efficiency of centralized exchanges while maintaining the transparency and decentralization of blockchain technology.
Its flagship decentralized exchange (DEX) focuses on perpetual contract trading, and the recently launched HyperEVM has attracted a vibrant ecosystem covering everything from DeFi protocols to meme token issuance platforms and AI-driven applications.
In this detailed blog post, we will delve into the Hyperliquid ecosystem, highlighting key projects and analyzing the unique characteristics, potential, and challenges facing this chain.
What is Hyperliquid?
Hyperliquid is a Layer 1 blockchain optimized for high-frequency trading and DeFi applications. Since its launch in 2023, it operates on a custom consensus algorithm called HyperBFT, derived from the HotStuff protocol, enabling sub-second block finality and supporting throughput of up to 200,000 orders per second. Unlike many decentralized exchanges that rely on automated market makers (AMMs), Hyperliquid adopts a fully on-chain central limit order book (CLOB) model, providing deep liquidity, low slippage, and a trading experience comparable to centralized exchanges like Binance.
The native token of the Hyperliquid chain, $HYPE, is the core driving force of its ecosystem, serving as a utility token for paying trading fees, staking, and governance functions. In November 2024, Hyperliquid conducted an unprecedented airdrop event, distributing 310 million $HYPE tokens to early users, valued at over $1.2 billion, accounting for 31% of the total supply. This community-centered strategy, coupled with its self-funded approach (refusing venture capital support), has propelled Hyperliquid's rapid growth. By early 2025, its cumulative trading volume had approached $1 trillion.
The Hyperliquid ecosystem further benefits from its HyperEVM, an Ethereum Virtual Machine (EVM) execution layer integrated into the L1 blockchain. HyperEVM went live on February 18, 2025, allowing developers to deploy Ethereum-compatible smart contracts while leveraging Hyperliquid's high-speed consensus mechanism and native financial infrastructure. This positions Hyperliquid as a powerful platform for building advanced DeFi applications, asset tokenization tools, and innovative trading tools.
Core functionalities of Hyperliquid Chain
Before diving into its ecosystem projects, let’s first understand the core features that make Hyperliquid attractive to developers and users:
The high-performance HyperBFT consensus mechanism achieves block confirmation times of less than 1 second (with a median latency of only 0.2 seconds), supporting over 200,000 transactions per second and potentially scalable to over 1 million orders per second in the future.
On-Chain Order Book: Unlike decentralized exchanges based on automated market makers (AMMs), Hyperliquid's centralized limit order book (CLOB) ensures efficient price discovery, transparency, and support for advanced order types, including perpetual contracts with leverage up to 50x.
HyperEVM, protected by HyperBFT, supports Ethereum-compatible smart contracts that interact directly with Hyperliquid's native order book and liquidity.
HIP-1 and HIP-2 standards
HIP-1: Allows projects to peg native tokens to Hyperliquid's on-chain spot order book, lowering the barriers to token issuance.
HIP-2: Provides automated liquidity for new tokens, addressing liquidity shortages and ensuring smooth trading.
Zero Gas Fees: Hyperliquid waives gas fees for transactions, with standard limit order fees at a maximum of 0.01% and taker fees at approximately 0.035%, making it highly cost-effective for high-frequency traders.
Community-First Model: Hyperliquid allocates 76.2% of $HYPE to the community and has not introduced any venture capital support, reflecting its commitment to user participation and fairness.
Vaults functionality: Users can deposit funds into vaults for copy trading, market making, or liquidation strategies, sharing profits and losses (P&L) with vault operators.
These powerful features provide developers with an innovative breeding ground, allowing various projects from lending protocols to meme token issuance platforms to seamlessly integrate into Hyperliquid's high-performance infrastructure.
Hyperliquid Ecosystem: Key Project Analysis
The Hyperliquid ecosystem is rapidly expanding, encompassing DeFi, gaming, NFTs, artificial intelligence, and meme tokens. The following categorization and interpretation of some of the most representative projects is based on recent developments and community activities from the perspective of major functionalities.
DeFi protocols
Hyperdrive
Overview: Hyperdrive is a one-stop DeFi hub on Hyperliquid, offering a spot lending market, liquid staking of $HYPE, and advanced yield strategies. By integrating various financial services into a single platform, Hyperdrive aims to simplify users' DeFi interaction experiences.
Core features:
Provides a spot lending market for assets.
Supports liquid staking of $HYPE, allowing users to earn rewards while maintaining liquidity.
Yield optimization strategies to help users maximize returns.
Impact: Hyperdrive enhances capital efficiency within the Hyperliquid ecosystem, attracting users seeking passive income and leveraged trading opportunities.
Hyperlend
Overview: Hyperlend is a decentralized lending protocol based on Hyperliquid's HyperEVM, similar to Aave. It supports collateralization with the $HLP (Hyperliquid Points) treasury to unlock leveraged yield opportunities for users.
Core features:
Lending functionality supporting native and EVM-compatible assets.
Integration with the $HLP treasury, supporting collateralized lending.
Plans to expand support for cross-chain assets.
Impact: As the first native lending protocol, Hyperlend further strengthens Hyperliquid's DeFi ecosystem by providing necessary financial infrastructure.
HarmonixFi
Overview: HarmonixFi is a treasury-based protocol that allows users to earn $HYPE and future airdrop points by depositing assets. The protocol focuses on yield farming and community-driven incentive mechanisms.
Core features:
Earn $HYPE and points through treasury deposits.
Integration with Hyperliquid's testnet to attract early users.
Community governance for protocol upgrades.
Impact: HarmonixFi incentivizes user participation through reward mechanisms, while promoting overall activity within the ecosystem.
feUSD
Overview: feUSD is a native CDP stablecoin launched by the Felix protocol, allowing users to mint a stablecoin pegged to the US dollar by depositing $HYPE, $PURR, and other assets. Its goal is to provide price stability for trading and DeFi applications.
Core features:
Collateralized minting using ecosystem tokens.
Integration with Hyperliquid's trading infrastructure.
Planned for lending and staking protocols.
Impact: Stablecoins like feUSD can significantly enhance Hyperliquid's DeFi ecosystem by providing stable trading pairs and reducing volatility risks.
Hyperstable
Overview: Hyperstable is a decentralized stablecoin protocol based on HyperEVM, backed by crypto assets and over-collateralized, aiming to maintain its USH stablecoin pegged to the US dollar. Launched in 2024, it employs a dual token system, including USH and PEG governance tokens. Users can mint USH by depositing supported collateral (such as $HYPE) into non-custodial treasuries. Hyperstable promotes growth through a Borrowing Rebate Program and Referral Bonus, regularly distributing PEG tokens to offset interest costs. Liquidity providers can earn PEG by staking on AMMs like Curve, while vePEG holders can lock tokens to earn 100% of the protocol revenue (paid in USH) and vote on token releases. Currently, Hyperstable has a total locked value (TVL) of $2.53 million and a 24-hour trading volume of $822,900, having passed audits from companies such as 0x52 and Pashov Audit Group. Its innovative voting lockup tokenomics and high yield opportunities (20-50% annualized returns on stable pools) make it an attractive DeFi platform.
Impact: Hyperstable's stablecoin and governance model enhance Hyperliquid's DeFi ecosystem, providing price stability and attractive yields for borrowers, liquidity providers, and token holders.
KittenSwap
Overview: KittenSwap is a decentralized exchange (DEX) based on HyperEVM, launching in December 2024, designed based on a fork of Velodrome. It features an innovative ve(3,3) token economy model, combining the efficiency of automated market makers (AMMs) with governance and reward systems, aiming to unify the interests of liquidity providers, token holders, and protocol developers.
Impact: KittenSwap's ve(3,3) model and community-driven incentives (including points programs and NFT integration) make it a cornerstone of the Hyperliquid DeFi ecosystem, driving user participation and liquidity supply.
Valantis
Overview: Valantis is a modular decentralized exchange (DEX) protocol launched by Valantis Labs in 2023 on HyperEVM, designed to give developers the ability to create customized, composable DEXs. Its Sovereign Pools and Core Pools utilize reusable modules to handle pricing logic, fee calculations, oracle services, and liquidity management, mitigating liquidity fragmentation issues through shared external treasuries. Valantis supports rebasing tokens (such as liquid staking tokens LSTs), with its HOT-AMM pool achieving over $50 million in trading volume and $5 million in liquidity. Currently, Valantis has a total locked value (TVL) of $44.21 million on Hyperliquid and offers various yield opportunities, including swap fees, lending, staking, and double HypurrFi points rewards for $HYPE deposits. Valantis secured $7.5 million in funding from investors like Triton Capital and Anthony Sassano, making it a key component of Hyperliquid's DeFi infrastructure, supporting developers in building innovative DEXs with higher security and capital efficiency.
Impact: Valantis's modular framework and support for advanced DeFi functionalities make it an important liquidity hub, driving developer adoption and trader participation.
Hyperbeat
Overview: Hyperbeat is a decentralized lending protocol based on Hyperliquid's HyperEVM, launched in early 2025, aimed at enhancing capital efficiency for traders and liquidity providers. Users can lend assets (such as $HYPE, $KITTEN, and stablecoins) to earn interest or borrow against collateral to participate in Hyperliquid's spot and perpetual futures markets. Hyperbeat is deeply integrated with Hyperliquid's native order book, allowing seamless interaction between lending pools and trading activity. The protocol employs dynamic interest rates based on market demand and supports over-collateralized loans to ensure stability. With a user-friendly interface and low-latency trading, Hyperbeat attracted significant attention in its first month, reaching a total locked value (TVL) of $20 million. Its points-based rewards system incentivizes early users, while plans for a native token are in place to further align community interests.
Impact: Hyperbeat reinforces Hyperliquid's DeFi ecosystem by providing critical lending infrastructure, offering leverage trading and yield opportunities to a broad user base.
Trading and analysis tools
Pvp.trade
Overview: Pvp.trade is a Telegram-based trading bot that supports spot and perpetual futures trading on Hyperliquid. It integrates social and competitive trading features, allowing users to accumulate points based on trading volume for future $PVP token airdrops.
Core features:
Leverage and spot trading via Telegram.
Social trading features to view group members' positions.
Volume-based point accumulation for $PVP token airdrops.
Impact: Pvp.trade has attracted significant attention through its gamified trading experience and airdrop potential, with its $PVP raising $200,000 in auctions.
Insilico Terminal
Overview: Insilico Terminal is a trading tool that employs artificial intelligence (AI) to provide Hyperliquid users with advanced market analysis and trading signals (supporting multiple centralized exchanges including Binance, Coinbase Pro, Bybit, OKX, and Bitmex).
Core features:
AI-based market predictions and trading strategies.
Real-time analysis of spot and derivatives markets.
Deep integration with Hyperliquid's order book.
Impact: Insilico enhances trading efficiency, attracting professional traders seeking data-driven insights.
Katoshi AI
Overview: Katoshi AI is an AI-based trading platform capable of automatically executing strategies and providing predictive analytics for the Hyperliquid market.
Core features:
Automated trading bots for perpetual contracts and spot markets.
Price trend prediction model.
User-friendly interface aimed at retail traders.
Impact: Katoshi AI popularized advanced trading tools, enabling more users to participate in Hyperliquid's markets with ease.
Meme Token and NFT platform
HypurrFun
Hypio
Overview: Hypio is a popular NFT series within the Hyperliquid ecosystem, launching in January 2025, aimed at combining NFTs with DeFi and gaming scenarios.
Core features:
Unique NFT assets with practical use in the Hyperliquid ecosystem.
Plans for integration with gaming and staking protocols.
Community-driven design and governance at its core.
Impact: Hypio adds a creative dimension to Hyperliquid, attracting NFT enthusiasts and collectors.
TheFarm.fun
Overview: TheFarm.fun is a pioneering AI-driven gaming platform on Hyperliquid, launching in 2024. It combines generative AI with blockchain technology to create a unique on-chain biological generation system. Users can mint pixelated NFTs from real animal photos using proprietary GenAI models. The foundation of the ecosystem is built upon the top 50 biological 'ancestors' (The Ancestors). The platform has confirmed an airdrop of the $FARM token, distributing 5% of the total supply to reward creators and voters, with 50% allocated to 'ancestors', 30% to other minted creatures, and 20% to voters who choose 'ancestors'. The roadmap for TheFarm.fun includes simulated gameplay and combat/esports features, aiming to build a comprehensive gaming ecosystem. With strong community engagement and innovative AI integration, the platform quickly gained attention, offering a new experience that combines creativity with gamification.
Impact: The AI-driven NFT creation and planned gaming features of TheFarm.fun position it as a leader in Hyperliquid's gaming ecosystem, attracting creators and players seeking innovative blockchain experiences.
HyBridge
Overview: HyBridge is a community-developed cross-chain bridging protocol that supports transferring assets from seven blockchains (such as Ethereum, Solana, Arbitrum) to Hyperliquid, processing millions of transactions daily.
Core features:
Supports cross-chain transfers of USDC, USDT, $HYPE, and ecosystem tokens.
Low fees and high throughput.
Can be directly converted into Hyperliquid native assets.
Impact: HyBridge simplifies user onboarding, allowing users from multiple chains to easily enter the Hyperliquid ecosystem.
Hyperunit
Overview: Hyperunit is a tokenized layer supporting native BTC and ETH spot markets on Hyperliquid. It captures 50% of trading fees and plans to launch significant token issuance.
Core features:
Tokenized services for primary assets in spot trading.
Fee distribution through a revenue-sharing model.
Deep integration with Hyperliquid's order book.
Impact: Hyperunit enhances the appeal of Hyperliquid's spot markets, attracting attention from institutional and retail traders.
Goldsky
Overview: Goldsky is a data indexing platform that provides real-time analytics services for Hyperliquid's blockchain and DeFi applications.
Core features:
High-speed data indexing for trading and smart contracts.
Provides developers with a user-friendly API for building analytical tools.
Supports decentralized applications (dApps) based on HyperEVM.
Impact: Goldsky provides developers with a robust data infrastructure, facilitating the rapid growth of the ecosystem.
Gaming and entertainment
Playmoon
Overview: Playmoon is an emerging gaming platform on Hyperliquid, launching in 2025, focusing on providing competitive and social gaming experiences combined with blockchain technology. Users can access the platform through its login portal (playmoon.xyz/login). Playmoon emphasizes user-driven challenges and tokenized rewards, allowing players to earn assets through gameplay.
Although still in the early stages, the platform plans to leverage Hyperliquid's high-throughput infrastructure to support fast-paced on-chain gaming mechanics. Playmoon's social media promotion (including a Facebook page with 56 likes) uses the slogan 'Défiez l’intouchable' (Challenge the Untouchable), suggesting a focus on competitive leaderboards or tournaments. Future plans include integration with Hyperliquid's spot market for trading in-game assets and expanding gaming content.
Impact: Playmoon’s competitive gaming model and blockchain integration add a dynamic entertainment layer to Hyperliquid, attracting gamers and crypto enthusiasts.
MON Protocol
Overview: MON Protocol is a blockchain-based gaming and intellectual property (IP) distribution platform integrated with Hyperliquid, aimed at managing and distributing IP ecosystems through tokenization.
The protocol, launching in 2024, allows developers to create and monetize game assets, already having over 100 collaborative projects, and distributing $20 million in token rewards to $MON holders.
The Launchpools feature of MON Protocol allows $MON holders to stake tokens to earn partner tokens, with its community presale event selling 62,092,000 $MON tokens (6.21% of total supply) at a price of $0.099 each, generating significant attention.
Additionally, MON Protocol supports earning $MON through NFT staking, leveraging on-chain incentive mechanisms to promote user acquisition and community management.
By integrating with Hyperliquid's HyperEVM, the protocol achieves seamless asset trading and DeFi interaction, establishing its crucial position within the gaming ecosystem.
Impact: MON Protocol focuses on IP management and tokenizing gaming rewards, enhancing Hyperliquid's synergies in gaming and DeFi, attracting developers and players to join its vast ecosystem.
Sovrun
Overview: Sovrun (formerly BreederDAO) is a gaming asset platform and the first Layer 2 solution on Hyperliquid. The platform focuses on tokenizing gaming assets and is supported by a16z and Delphi.
Core features:
Provides tokenized gaming assets for trading and staking.
Layer 2 scalability supporting high-throughput gaming dApps.
Already listed on Hyperliquid's spot exchange.
Impact: Sovrun builds a bridge between gaming and DeFi, expanding Hyperliquid's application scenarios.
Ecosystem dynamics and trends
Token auctions and community participation
Hyperliquid's HIP-1 token auction has become a hallmark event of its ecosystem, requiring project teams to pay between $300,000 to $1 million (in USDC) to bid for listing on the spot exchange. These auctions reflect the high demand for Hyperliquid's liquidity and trading infrastructure. Notable cases include $GOD ($1 million) and $PVP ($200,000), showcasing fierce competition for token codes.
The community-driven HypurrCollective brings together ecosystem projects and supports developers, while HypurCo operates one of the largest validator nodes by staking 30 million $HYPE (valued at $600 million). This community-centered approach, combined with airdrop incentives (such as $HYPE, $PVP), significantly enhances user engagement.
The role of HyperEVM
HyperEVM, launching in February 2025, is a pivotal turning point in ecosystem development, enabling developers to build decentralized applications (dApps) based on smart contracts. Projects like Hyperlend, Hyperdrive, and SOVRN leverage HyperEVM's composability, deeply integrating with Hyperliquid's native order book and liquidity. This shift has drawn attention from mainstream DeFi protocols, such as Ethena Labs, exploring integration to reduce reliance on centralized exchanges.
Meme token craze
Meme tokens (like $PIP, $JEFF, and $PURR, the latter being Hyperliquid's mascot) have rapidly gained popularity, driven by the convenient launch platform HypurrFun. Although early auctions focused primarily on meme tokens, recent trends indicate a shift towards utility-driven projects (like $SOLV and $SWELL), suggesting the ecosystem is gradually maturing.
Challenges and risks
Despite Hyperliquid's rapid growth, it still faces multiple challenges:
Ecosystem richness: The ecosystem currently lacks a complete DeFi closed loop, with application scenarios mainly limited to trading, lending, and staking. Expanding use cases (such as options and structured products) is crucial.
Security risks: Hyperliquid has faced scrutiny over potential vulnerabilities, including state-sponsored hacking (such as the Lazarus Group) and risks of re-entrancy attacks or oracle manipulation. Regular audits (such as Zellic's review of cross-chain bridges and staking logic) are key to ensuring security.
Liquidity risk: New tokens often face low liquidity issues; although HIP-2 has alleviated some of this, maintaining deep liquidity on trading pairs remains a challenge.
Compliance risk: As global regulations tighten, Hyperliquid must find a balance between innovation and compliance to avoid legal hurdles.
Stablecoin integration: The lack of a native stablecoin (other than feUSD) may hinder widespread adoption of DeFi. A robust stablecoin can enhance trading stability and attract institutional users.
Addressing these challenges requires ongoing innovation, community governance, and support for strategic partnerships.
Future potential and outlook
Hyperliquid's development roadmap focuses on ecosystem expansion, with plans including:
Launch more DeFi derivatives (such as options and leveraged products).
Attract third-party developers through open protocols and incentives.
Integrate native assets (such as BTC, ETH, and SOL) for spot trading.
Optimize HyperEVM through enhanced smart contract features.
Industry experts (such as Ryan Watkins of Syncracy Capital) predict that Hyperliquid is poised to become the blockchain with the highest fee revenue in 2025, thanks to its comprehensive business model and increasing trading volume (currently averaging $500 million in daily spot trading). The platform's ability to combine spot, derivatives, and block space through HyperEVM positions it as a DeFi superchain.
Upcoming native stablecoins, potential cross-chain integrations, and increasing developer activity (such as Insilico Terminal and Katoshi AI) herald a bright future. As Hyperliquid matures, it may compete with established L1 blockchains like Ethereum and Solana in the DeFi and trading realms.
How to participate
Trading on Hyperliquid DEX: Connect your wallet by visiting app.hyperliquid.xyz and bridge USDC or USDT from Arbitrum to participate in perpetual contract or spot market trading.
Participate in airdrop events: Earn points for future token distribution rewards by engaging with projects like Pvp.trade, HarmonixFi, or HypurrFun.
Building on HyperEVM: Developers can deploy smart contracts using Ethereum-compatible tools and leverage HyperEVM's documentation and API for development.
Stake $HYPE: Stake $HYPE through liquidity staking protocols like Hyperdrive to earn rewards and support network security.
Explore the Hyperliquid ecosystem: HypurrCollective provides a comprehensive public database of the Hyperliquid ecosystem.
Join the community: Follow @HyperliquidX, @hypurr_co, and HypurrCollective on X for the latest updates, or participate in governance by voting with $HYPE.
Conclusion
The Hyperliquid Chain ecosystem is a vibrant and rapidly evolving space, merging high-performance trading with innovative DeFi and entertainment applications. Projects like Hyperlend, Pvp.trade, and HypurrFun showcase the chain's versatility, while the launch of HyperEVM brings a new wave of development for smart contract-based dApps. With its community-focused model, zero gas fees, and unparalleled throughput, Hyperliquid is poised to lead the next generation of on-chain finance.
However, challenges such as ecosystem richness, security, and compliance still need to be addressed to maintain growth. As Hyperliquid continues to innovate and attract developers, it has the potential to redefine decentralized trading and become a cornerstone of the DeFi ecosystem. Whether you're a trader, developer, or crypto enthusiast, now is an excellent time to explore Hyperliquid's vibrant ecosystem and join this revolution.