Author: Nick Sawinyh
Compiled by: Deep Tide TechFlow
Hyperliquid Chain is a high-performance Layer 1 (L1) blockchain that has rapidly emerged as a powerful engine in the decentralized finance (DeFi) space in recent years.
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 features of blockchain technology.
Its flagship decentralized exchange (DEX) focuses on perpetual contract trading, and combined with the recently launched HyperEVM, attracts 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 features, potential, and challenges faced by 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 has operated on a custom consensus algorithm known as HyperBFT, derived from the HotStuff protocol, capable of achieving 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 (AMM), 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.
Hyperliquid's native token $HYPE is the core driving force of its ecosystem, serving as a utility token for paying transaction fees, staking, and governance functions. In November 2024, Hyperliquid conducted an unprecedented airdrop event, distributing 310 million $HYPE tokens worth over $1.2 billion to early users, representing 31% of the total supply. This community-centric strategy, coupled with its self-funding model (rejecting venture capital support), has driven Hyperliquid's rapid growth. As of early 2025, its cumulative trading volume has approached $1 trillion.
The Hyperliquid ecosystem further benefits from its HyperEVM, an Ethereum Virtual Machine (EVM) execution layer integrated into the L1 blockchain. HyperEVM will go 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 makes Hyperliquid a powerful platform for building advanced DeFi applications, asset tokenization tools, and innovative trading tools.
Core Features 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 delay of only 0.2 seconds), supporting over 200,000 transactions per second and scalable to over 1 million orders per second in the future.
Unlike automated market maker (AMM)-based decentralized exchanges, 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 50 times.
HyperEVM, protected by HyperBFT, supports Ethereum-compatible smart contracts to 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 barrier for 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 capped at 0.01% and taker fees around 0.035%, making it highly cost-effective for high-frequency traders.
Community-first model Hyperliquid allocates 76.2% of $HYPE to the community, without introducing any venture capital support, reflecting a commitment to user engagement and fairness.
Vault 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 fertile ground, allowing various projects ranging from lending protocols to meme token issuance platforms to be seamlessly integrated into Hyperliquid's high-performance infrastructure.
Hyperliquid Ecosystem: Analysis of Key Projects
The Hyperliquid ecosystem is rapidly expanding, covering areas such as DeFi, gaming, NFTs, artificial intelligence, and meme tokens. The following is a classification and interpretation of some representative projects based on recent developments and community activities from a major features perspective.
DeFi Protocol
Hyperdrive
Overview: Hyperdrive is a one-stop DeFi hub on Hyperliquid, offering spot lending markets, liquid staking of $HYPE, and advanced yield strategies. By integrating multiple financial services into a single platform, Hyperdrive aims to simplify users' DeFi interaction experience.
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 leverage trading opportunities.
Hyperlend
Overview: Hyperlend is a decentralized lending protocol based on Hyperliquid's HyperEVM, similar to Aave. It supports using $HLP (Hyperliquid Points) treasury as collateral to unlock leverage yield opportunities for users.
Core Features:
Supports lending functions for native and EVM-compatible assets.
Integrated 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. This protocol focuses on yield farming and community-driven incentive mechanisms.
Core Features:
Earn $HYPE and points through treasury deposits.
Integrated with Hyperliquid's testnet, attracting early users.
Community governance for protocol upgrades.
Impact: HarmonixFi incentivizes user participation through reward mechanisms while boosting the overall activity of the ecosystem.
feUSD
Overview: feUSD is a native CDP stablecoin launched by the Felix protocol, allowing users to mint a stablecoin pegged to the dollar by depositing $HYPE, $PURR, and other assets. Its goal is to provide price stability for trading and DeFi applications.
Core Features:
Using ecosystem tokens for collateralized minting.
Integrated 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 backed by crypto assets with over-collateralization, designed to maintain its USH stablecoin peg to $1.
The protocol will launch in 2024, adopting a dual-token system that includes USH and PEG governance tokens. Users can mint USH by depositing supported collateral (such as $HYPE) into a non-custodial vault.
Hyperstable drives growth through a Borrowing Rebate Program and user acquisition rewards (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 up tokens to earn 100% of the protocol's revenue (paid in USH) and vote on token releases.
Currently, Hyperstable's total locked value (TVL) stands at $2.53 million, with a 24-hour trading volume of $822,900, and has been audited by companies such as 0x52 and Pashov Audit Group. Its innovative voting lock token economic model and high yield opportunities (stable pool annualized yields of 20-50%) 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 as a fork of Velodrome. It employs an innovative ve(3,3) token economic model, combining the efficiency of automated market makers (AMM) with governance and rewards 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 rewards programs and NFT integration) make it a cornerstone of the Hyperliquid DeFi ecosystem, driving user participation and liquidity provision.
Valantis
Overview: Valantis is a modular decentralized exchange (DEX) protocol launched by Valantis Labs in 2023 on HyperEVM, designed to empower developers to create customized, composable DEXs.
Its Sovereign Pools and Core Pools use reusable modules to handle pricing logic, fee calculations, oracle services, and liquidity management, alleviating liquidity fragmentation issues through shared external vaults.
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, offering various yield opportunities, including trading fees, lending, staking, and 2x HypurrFi point rewards for $HYPE deposits.
Valantis has secured $7.5 million in funding from investors such as Triton Capital and Anthony Sassano, making it an important 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 features 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 the capital efficiency of traders and liquidity providers.
Users can lend assets (such as $HYPE, $KITTEN, and stablecoins) through Hyperbeat 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, enabling seamless interaction between lending pools and trading activities. The protocol adopts a dynamic interest rate model 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 of launch, achieving a total locked value (TVL) of $20 million. Its point-based reward system incentivized early users, while plans for a native token are in place to further align community interests.
Impact: Hyperbeat strengthens Hyperliquid's DeFi ecosystem by providing crucial lending infrastructure, offering leverage trading and yield opportunities to a wide range of users.
Trading and analytical 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:
Leveraged and spot trading via Telegram.
Social trading features that allow users to view the holdings of group members.
Volume-based point accumulation for $PVP token airdrops.
Impact: Pvp.trade has attracted wide attention through its gamified trading experience and airdrop potential, raising $200,000 for its $PVP in auctions.
Insilico Terminal
Overview: Insilico Terminal is a trading tool that uses artificial intelligence (AI) to provide advanced market analysis and trading signals for Hyperliquid users (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.
Deeply integrated 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 that can automatically execute strategies and provide predictive analytics for the Hyperliquid market.
Core Features:
Automated trading bots for perpetual contracts and spot markets.
Price trend prediction models.
User-friendly interface aimed at retail traders.
Impact: Katoshi AI popularizes advanced trading tools, making it easier for more users to engage with Hyperliquid's markets.
Meme Token and NFT Platform
HypurrFun
Hypio
Overview: Hypio is a popular NFT series in the Hyperliquid ecosystem, launched in January 2025, aimed at combining NFTs with DeFi and gaming scenarios.
Core Features:
Unique NFT assets with real utility in the Hyperliquid ecosystem.
Plans to integrate with gaming and staking protocols.
Centered on community-driven design and governance.
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 and blockchain technology to create a unique on-chain creature generation system. Users can mint pixelated NFT creatures from real animal photos using proprietary GenAI models. The foundation of the ecosystem consists of the top 50 ranked creatures known as 'The Ancestors.'
The platform has confirmed plans for a $FARM token airdrop, allocating 5% of the total supply to reward creators and voters, with 50% going to 'ancestors,' 30% to other minted creatures, and 20% to voters choosing 'ancestors.'
The roadmap for TheFarm.fun includes simulation gameplay and combat/esports features, aiming to build a comprehensive gaming ecosystem. With strong community participation and innovative AI integration, the platform has quickly gained attention, offering a unique experience that combines creativity and gamification.
Impact: The AI-driven NFT creation and planned gaming features of TheFarm.fun place it at the forefront of 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 asset transfers 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 to Hyperliquid native assets.
Impact: HyBridge simplifies user access, enabling users across multiple chains to easily enter the Hyperliquid ecosystem.
Hyperunit
Overview: Hyperunit is a tokenization layer supporting the native BTC and ETH spot markets on Hyperliquid. It captures 50% of the trading fees and plans to launch significant token offerings.
Core Features:
Provides tokenization services for major assets in spot trading.
Revenue sharing model for fee distribution.
Deeply integrated with Hyperliquid's order book.
Impact: Hyperunit enhances the appeal of Hyperliquid's spot market, drawing attention from institutional and retail traders.
Goldsky
Overview: Goldsky is a data indexing platform providing real-time analytical services for Hyperliquid's blockchain and DeFi applications.
Core Features:
High-speed data indexing for trading and smart contracts.
Provides user-friendly APIs for building analytical tools.
Supports decentralized applications (dApps) based on HyperEVM.
Impact: Goldsky provides developers with robust data infrastructure, aiding 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.
Despite still being in its 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), hinting at a possible focus on competitive rankings or tournaments. Future plans include integration with Hyperliquid's spot market for trading in-game assets and expanding game 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 tokenized management and distribution of the IP ecosystem.
The protocol will launch in 2024, allowing developers to create and monetize gaming assets, having over 100 partnered projects and distributing $20 million in token rewards to $MON token holders.
MON Protocol's Launchpools feature allows $MON holders to stake tokens for partner tokens, and its community presale activity sold 62,092,000 $MON tokens at $0.099 each (accounting for 6.21% of the total supply), generating significant attention.
Additionally, MON Protocol supports earning $MON through NFT staking, using on-chain incentives to promote user acquisition and community governance.
Through integration with Hyperliquid's HyperEVM, the protocol achieves seamless asset trading and DeFi interactions, establishing its significance in the gaming ecosystem.
Impact: MON Protocol focuses on IP management and tokenized gaming rewards, enhancing Hyperliquid's synergy in the gaming and DeFi spaces, attracting developers and players to 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 tokenized 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 the application scenarios of Hyperliquid.
Ecosystem Dynamics and Trends
Token auctions and community participation
Hyperliquid's HIP-1 token auction has become a hallmark event of its ecosystem, with project teams required to pay between $300,000 and $1 million (in USDC) to bid for listings 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 the 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-centric approach, combined with airdrop incentives (such as $HYPE and $PVP), greatly enhances user engagement.
The Role of HyperEVM
HyperEVM launched in February 2025, marking a pivotal 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 attracted the attention of mainstream DeFi protocols, with Ethena Labs exploring integration to reduce reliance on centralized exchanges.
Meme Token Craze
Meme tokens (such as $PIP, $JEFF, and $PURR, the latter being Hyperliquid's mascot) have rapidly gained popularity, propelled by HypurrFun's convenient launch platform. Although early auctions primarily focused on meme tokens, recent trends indicate that the ecosystem is shifting towards utility-driven projects (like $SOLV and $SWELL), suggesting that the ecosystem is maturing.
Challenges and Risks
Despite Hyperliquid's rapid growth, it still faces multiple challenges:
Ecosystem Richness: Currently, the ecosystem lacks a complete DeFi closed loop, with applications primarily limited to trading, lending, and staking. Expanding more use cases (such as options and structured products) is crucial.
Security Risks: Hyperliquid has faced scrutiny over potential vulnerabilities, including nation-state-sponsored hacking attacks (such as the Lazarus Group) and risks of re-entrancy attacks or oracle manipulation. Regular audits (such as those by Zellic on cross-chain bridges and staking logic) are key to ensuring security.
Liquidity Risk: New tokens often face low liquidity issues, and although HIP-2 has eased this somewhat, maintaining deep liquidity for trading pairs remains a challenge.
Compliance Risks: As global regulations tighten, Hyperliquid must find a balance between innovation and compliance to avoid legal hurdles.
Stablecoin integration: The lack of native stablecoins (other than feUSD) may impede the 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 from 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.
Integrates native assets for spot trading (such as BTC, ETH, and SOL).
Optimize HyperEVM with enhanced smart contract capabilities.
Industry experts (such as Ryan Watkins from Syncracy Capital) predict that Hyperliquid is on track to become the blockchain with the highest fee revenue by 2025, thanks to its comprehensive business model and increasing trading volume (with daily spot trading volumes currently averaging $500 million). The platform's ability to combine spot, derivatives, and block space through HyperEVM positions it as a DeFi superchain.
The upcoming native stablecoin, potential cross-chain integration, and increasing developer activity (such as Insilico Terminal and Katoshi AI) all signal a bright future. As Hyperliquid matures, it may compete with established L1 blockchains like Ethereum and Solana in the DeFi and trading space.
How to Participate
Trade on the Hyperliquid DEX: Connect your wallet by accessing app.hyperliquid.xyz and bridge USDC or USDT from Arbitrum to participate in perpetual contracts or spot market trading.
Participate in airdrop events: Earn points by participating in projects like Pvp.trade, HarmonixFi, or HypurrFun to receive future token distribution rewards.
Building on HyperEVM: Developers can deploy smart contracts using Ethereum-compatible tools and leverage HyperEVM's documentation and APIs for development.
Stake $HYPE: Stake $HYPE through liquid 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 that combines 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-centric 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 are a trader, developer, or crypto enthusiast, now is the perfect time to explore the vibrant Hyperliquid ecosystem and join this revolution.