Authors: Lucas Tcheyan & Will Owens

Compiled by: Shenchao TechFlow

HyperEVM is Hyperliquid's EVM-compatible general-purpose Layer 1 blockchain that is beginning to show early signs of development.

Despite being relatively quiet compared to HyperCore (Hyperliquid's flagship perpetual contract platform), HyperEVM has seen steady growth in trading volume, total locked value (TVL), and application development since its launch in February. This progress has been made despite a lack of robust tools and direct incentive programs. Upgrades to key infrastructure, a maturing DeFi ecosystem, and growing speculation about potential airdrops have all contributed to HyperEVM's development.

The recent release of the CoreWriter update marks a critical moment for the ecosystem. By enabling full write access to HyperCore, CoreWriter will unlock a new class of native integrations for applications on both layers, further blurring the boundaries between the two platforms and allowing HyperEVM to evolve from a sidecar into the core driving force of Hyperliquid's ever-expanding on-chain financial stack.

Key Points

The development work on HyperEVM is proceeding in an iterative and controlled manner to ensure its activities do not affect HyperCore. This has caused some friction for teams building on the chain early on, but it has not stopped a large number of developers from releasing applications, with over 175 teams currently building on HyperEVM.

HyperEVM is ranked tenth in TVL among L1 networks. Leading applications are primarily composed of DeFi products, particularly lending. This aligns with HyperEVM's goal of unlocking DeFi composability for HyperCore.

HYPE is the native gas token of HyperEVM, with each transaction burning the base and priority fees. So far, transaction fees have accounted for 0.006% of the total supply of HYPE, but if on-chain trading activities rebound as expected in the coming months, the burn amount is likely to continue increasing.

User activity is still catching up to HyperCore's adoption. As blockchain infrastructure and tools better integrate HyperEVM and HyperCore, we expect the adoption rate of HyperCore to further increase in the coming month.

The latest release of CoreWriter enables smart contracts on HyperEVM to write directly to HyperCore, marking a significant unlock for the HyperEVM application ecosystem and expected to drive a surge in application deployments and user activity in the coming months.

Hyperliquid's broader vision is to position HyperEVM as a complementary financial layer to HyperCore. In the future, the goal is to create a vertically integrated DeFi stack where trading, lending, vaults, and staking functions coexist natively across both chains.

HyperEVM Architecture

Hyperliquid has two interrelated yet independent platforms: HyperEVM and HyperCore. HyperCore, more well-known, is Hyperliquid's perpetual contract futures platform, featuring an on-chain order book, margin system, and matching engine. Since its launch in 2023, it has dominated the perpetual contract market and has even begun to compete with perpetual contract products from centralized exchanges. HyperEVM is Hyperliquid's general-purpose L1 layer compatible with EVM. HyperCore is a newer platform launched on February 18, aimed at unlocking DeFi composability for HyperCore through integration with general-purpose smart contract platforms.

An important distinction here is that HyperCore and HyperEVM are independent chains, but they are both secured by the same HyperBFT consensus mechanism (a combination of proof-of-stake and Byzantine fault tolerance optimized for high throughput and low-latency systems) and the same set of validators. This enables applications built on HyperEVM to interact directly with HyperCore's spot and perpetual order books.

(Source: Hyperliquid Docs)

Consensus and Execution

HyperEVM adopts a 'dual-block architecture' to address the trade-off between speed and capacity. It processes fast small blocks once per second, with a gas limit of 2 million, allowing regular transfers and transactions to be nearly instantaneous. Meanwhile, it processes large blocks once per minute, with a gas limit of 30 million, providing builders with space to handle heavyweight tasks such as deploying large smart contracts or minting a multitude of NFTs. The chain's block latency is under one second, supporting up to 200,000 orders per second.

While HyperEVM boasts advantages of high throughput and low latency, its transaction fees remain consistently higher than those of Ethereum L2 networks, especially during periods of congestion on-chain. The following chart compares the median daily transaction fees of HyperEVM with seven other L2 networks.

Notably, HyperEVM fees skyrocketed during peak activity periods (over $0.30 per transaction).

HYPE is the gas token on HyperEVM, which employs an improved version of Ethereum's EIP-1559 burn mechanism for burning base fees and priority fees. The chain is EVM compatible, allowing teams to easily redeploy EVM smart contracts on HyperEVM. Since its launch, over 55,000 HYPE tokens have been burned, accounting for 0.006% of the total supply of HYPE. In comparison, over 367,000 HYPE tokens have been burned on the HyperCore platform due to spot trading fees. At the current market price of HYPE at $39.12/token, this destruction represents over $2.15 million in HYPE burned since launch. On May 26, the daily burn peaked at 5,849 HYPE (approximately $226,000), coinciding with a surge in contract deployments and user activity. As activity on HyperEVM continues to expand, its contribution to the total consumption of HYPE will significantly grow, transitioning from marginal consumption to a substantial driver of long-term supply reduction.

Since its launch in February, HyperEVM has processed over 30 million transactions, with daily transaction volumes steadily climbing in the second quarter. In June, daily transaction volume peaked at 411,120, coinciding with the release of several key technologies, and there was an upward trend in on-chain NFT and memecoin trading volume.

Technical Upgrades

HyperEVM launched with only very basic functionalities, including spot transfers of HYPE with HyperCore and bundled HYPE contracts for DeFi applications. This was a rather rudimentary release, as the chain lacked many key features that should ultimately distinguish it from other general-purpose Layer-1s, the most notable being integration with HyperCore.

In the announcement, the team stated that one reason for launching in such a raw state was to ensure everyone could 'access equally and start on a level playing field.' Additionally, the phased rollout strategy allowed them to safely upgrade the system incrementally while integrating user feedback in real-time. According to HyperEVM's development team, the lack of polished tools has indeed caused some friction, but it has not hindered their development progress.

Since its launch, the team has made several technical updates to HyperEVM, including:

March 25: HyperCore connects with HyperEVM, enabling users to trade any token from one chain on the other chain.

April 30: Launched read precompiles, enabling HyperEVM smart contracts to read state from HyperCore.

May 26: Small block duration halved to 1 second, improving HyperEVM throughput. Improving throughput remains the team's top technical priority, and block times are expected to shorten further.

June 26: HyperEVM blocks have been updated to remove the previous sorting of only posted orders to improve integration with HyperCore.

On July 5, HyperEVM was updated with a new precompile called CoreWriter. It allows HyperEVM contracts to write directly to HyperCore, including functions such as placing orders, transferring spot assets, managing vaults, and staking HYPE. This move upgrades HyperEVM from a chain that could only read updates from HyperCore to one that can directly update HyperCore's state, which represents a significant advancement for the unique capabilities of HyperEVM (to be further discussed below). The team announced the first upgrade of CoreWriter on July 2 and officially deployed it three days later (mainnet updates are typically deployed on Saturdays).

While CoreWriter represents a significant step in unifying HyperEVM and HyperCore, it also has some limitations. Most notably, write operations through CoreWriter are not atomic operations, meaning that smart contracts cannot confirm in a single transaction whether orders or state changes on HyperCore were successful. This asynchronous design is intentional, aimed at minimizing front-running, but it presents challenges for more complex or precision-dependent trading strategies. Therefore, while CoreWriter allows for new types of applications, its early implementations are more suited to use cases that can tolerate asynchronous execution or high success rates, such as staking, vault deposits, and simpler programmatic interactions. Given the complexity of interactions between HyperEVM and HyperCore, the Hyperliquid team will continue to iterate and update, gradually unlocking new features to ensure they do not impact HyperCore's functionality.

The application ecosystem of HyperEVM

Since its launch, the HyperEVM ecosystem has developed rapidly, with over 175 projects publicly building on its chain and many more in stealth development. Developers are the core of any emerging ecosystem, and Hyperliquid has attracted a large number of strong developers with its unique architecture and integration with HyperCore. HyperCore is one of the most liquid on-chain exchanges, with a large user base that can easily migrate to HyperEVM. We have communicated with many teams that previously worked on other chains and are now building on HyperEVM, who repeatedly emphasized that the decision to migrate stemmed from either ongoing user demand or the need for applications to access more liquidity to function properly. Moreover, unlike many other Layer-1 ecosystems, Hyperliquid does not require dedicated incentive/funding programs to attract developers. The success of HYPE, coupled with expectations of future airdrops (which account for 42% of the remaining supply), has proven sufficient to provide ample incentive.

The total locked value (TVL) of HyperEVM has steadily climbed to the L1 leaderboard since its launch, currently ranking tenth. The growth of TVL is primarily concentrated in several key protocols (detailed below). Importantly, this growth has occurred without any liquidity mining activities or ecosystem incentives. While most of Hyperliquid's users and trading activities still occur on HyperCore, HyperEVM is now positioning itself as the DeFi settlement layer for the entire stack. As CoreWriter is set to unlock write access to HyperCore, TVL will shift from passive capital (idle lending) to active capital, trading with real-time perpetual contract markets, vaults, and order books.

As shown in the chart below, the HYPE tokens held by the ecosystem's aid fund (25.79 million) still exceed the HYPE tokens of the entire HyperEVM chain (approximately 25 million). This imbalance indicates that HyperEVM is still in its early stages. As on-chain usage grows, we expect more idle funds to migrate to efficient DeFi use cases.

Although HyperEVM was launched as early as February, the deployment of smart contracts on HyperEVM only truly began in mid-May. This can be attributed to several reasons. The lack of ERC-20 support, a block explorer, or a reliable indexer at the time of HyperEVM's launch imposed many limitations on developers. Additionally, the Hyperliquid team gave little advance notice of HyperEVM's launch timing, causing many teams to begin full development and deployment of contracts only after HyperEVM went live. With the rollout of core infrastructure and tools (such as cross-VM asset bridges, contract indexing, and verification tools) in March and April, smart contract deployment began to accelerate. With the launch of CoreWriter, we expect a surge in smart contract deployments as applications update their functionalities and products go live.

Protocols ranked high in TVL

HyperLend is the project with the highest TVL on HyperEVM, boasting $487 million and is a primary lending protocol for HyperEVM. It offers many standard lending functionalities, such as core pools that allow multiple tokens to be provided or borrowed in a single pool; efficiency modes that allow users to borrow related assets at higher TVL; and isolated pools that segregate risk to specific token pairs. On June 10, HyperLend announced a shift in focus toward integration with HyperCore. With this latest update, position liquidations can now occur directly on HyperEVM or via cross-chain execution on HyperCore. This is one of the first significant integrations between HyperEVM and HyperCore, likely envisioned by Hyperliquid founders when launching HyperEVM. Through HyperCore integration, HyperLend now offers three different liquidation methods for liquidators. For a complete overview of HyperLend's liquidation handling, please check the team's post here. The team also hinted that they are developing other products utilizing the CoreWriter version, but no details have been disclosed yet.

Felix ranks second with $340 million in TVL, offering a range of on-chain lending products. The application has two core primitives: a collateral debt position market and a 'vanilla' lending market. Felix leverages Hyperliquid's EVM compatibility as its backend infrastructure, using Liquity's v2 architecture for its CDP stablecoin feUSD and Morpho's tech stack for its vanilla lending market. In April of this year, Felix announced the launch of USDhl, a fiat-backed stablecoin developed in collaboration with stablecoin platform M0. According to publicly available on-chain data, Felix's stablecoin product has contributed over $100 million in stablecoins to the HyperEVM ecosystem since its launch, with most of it ($75 million) coming from feUSD. Felix also plans to integrate liquidation features on HyperCore following the release of CoreWriter.

HypurrFi is the third-largest lending application on Hyperliquid, with a total locked value (TVL) of $318 million. It claims to be Hyperliquid's 'debt infrastructure provider.' In addition to lending services, HypurrFi offers over-collateralized stablecoin USDXL, a built-in decentralized exchange (DEX), and yield vaults for users to deploy their assets. Following the decoupling of the USD to JPY (USDXL) in May, the team has lowered the issuance cap of this stablecoin to $5 million while working to implement a more robust pegging mechanism.

HyperSwap and KittenSwap are the main AMM decentralized exchanges (DEX) on Hyperliquid, ranking as the fourth and fifth largest applications by total locked value (TVL). They draw on common designs of EVM AMMs and offer standards and concentrated liquidity positions similar to Uniswap. KittenSwap also adopts Curve's ve(3,3) model. The release of CoreWriter will significantly enhance their functionality, allowing these two DEXs to integrate the HyperCore order book, enabling users' orders to be routed through either the DEX or the order book for optimal execution.

Unit Protocol is the asset tokenization layer of the Hyperliquid ecosystem, supporting cross-chain access to mainstream cryptocurrencies like BTC, ETH, and SOL on HyperCore and HyperEVM. Unit operates a decentralized guardian network that issues native spot assets using a 'lock-and-mint' system, eliminating reliance on centralized custodians. As of July 1, Unit has deployed over $100 million in BTC and $13 million in ETH on HyperEVM.

In addition to the examples mentioned above, many teams are developing products reliant on CoreWriter integration. Here are some examples:

Kinetiq is a liquid staking protocol on Hyperliquid that operates on HyperCore and HyperEVM. It allows users to stake the native HYPE token on HyperCore and receive kHYPE (a liquid staking token that can be used in DeFi applications on HyperEVM). Kinetiq employs an oracle-based autonomous validator selection system that dynamically delegates HYPE to the highest-performing validators, optimizing yields and securing the network. To facilitate staking operations between HyperEVM and HyperCore, Kinetiq will leverage CoreWriter to provide convenient integration and liquidity for staked assets. Just days after the release of CoreWriter, the team announced plans to launch this product on July 15.

Sentiment is a decentralized lending protocol on HyperEVM that allows users to borrow and lend assets with customizable leverage. It enables users to stake assets (such as Kinetiq's kHYPE or other HyperEVM tokens) to borrow stablecoins like USDC at competitive rates, facilitating strategies like leveraged liquidity mining. Sentiment's smart contracts are set to interact with HyperCore through CoreWriter, enabling real-time access to Hyperliquid's on-chain order book for collateral valuation and liquidation management.

HyperDrive and Hyperwave offer tokenized versions of HLP (a community-owned protocol library that executes market-making and liquidation strategies on HyperCore). The update of CoreWriter will enable these projects to more easily integrate HLP into the evolving DeFi ecosystem of HyperEVM.

Liminal is a delta-neutral yield protocol built on HyperCore. Liminal leverages Hyperliquid's high-performance trading infrastructure to execute automated, market-neutral strategies and obtain funding fees from the perpetual futures market. Its non-custodial design ensures users maintain control over their funds, while institutional accounts utilize Hyperliquid's native proxy system to ensure secure trade execution. The release of CoreWriter will ultimately enable the team to deploy HyperEVM contracts for users to manage positions on HyperCore.

Rysk is a decentralized options trading protocol based on HyperEVM that transforms covered call options into liquid, tradable primitives. It allows users to pre-earn yields while enabling advanced options trading within Hyperliquid's DeFi ecosystem. Rysk uses the HyperCore API for real-time, direct on-chain hedging of buyer option flows, but the team plans to update the stack to integrate CoreWriter. This will lower the execution risk of covered call options and provide users with greater transparency. The team is also exploring other options enabling users to build their own custom trading strategies using HyperEVM and CoreWriter, combining options with perpetual options.

Outlook

With nearly six months since its launch, HyperEVM has all the elements to become a general-purpose L1 platform and complements successful perpetual contract platforms. Other emerging L1 platforms require large incentive programs and genuinely novel applications to attract users and developers, while HyperEVM has built-in access to both, allowing developers to focus on product development and innovation.

Hyperliquid founder Jeff Yan recently stated on a podcast: '(Hyper)EVM is to the entire financial field what AMM is to the entire trading field.' While HyperCore is the main building block of the Hyperliquid ecosystem, it cannot itself meet all use cases built on perpetual contract exchanges. In the short term, HyperCore may still serve as the primary trading hub, but we anticipate that as blockchain performance and tools improve and applications mature, the activity of HyperEVM will accelerate in the coming year. Through a vertically integrated platform, Hyperliquid aims to create a comprehensive financial ecosystem that provides users with one-stop services while maintaining the stickiness of liquidity.

The newly released CoreWriter is an important catalyst that will accelerate the development of HyperEVM through comprehensive integration with HyperCore. It will allow applications on HyperEVM to write directly to HyperCore for the first time, enabling seamless interaction between the two environments and unlocking more powerful and coordinated on-chain applications.

In short, CoreWriter represents an important milestone for HyperEVM, with developers expressing interest in leveraging this integration to build products that are hard to find elsewhere.