Preface
Recently, Hyperliquid's native token HYPE has performed very strongly, rebounding from its low point two months ago and reaching a new high of $45 before the deadline. However, the market tends to overlook that Hyperliquid is not just an on-chain derivatives exchange; it is also a high-performance public chain, especially since HyperEVM's launch in February, many ecosystem projects are thriving. As HYPE rises, some funds may begin to flow into the HyperEVM ecosystem. Therefore, this article will first guide readers through the current development status of the HyperEVM ecosystem from the perspective of on-chain data and introduce several potential participation opportunities.
Overview of the HyperEVM Ecosystem
According to data from Purrsec, as of June 16, the amount of USDC crossed to Hyperliquid via the official bridge is currently $3.6 billion, but the actual TVL in Hyperliquid L1 (which is HyperEVM) is only $1.8 billion.
Figure 1, USDC Stock of Hyperliquid Official Bridge, Source: Purrsec
Figure 2, TVL of Hyperliquid L1, Source: DefiLlama
The significant gap between the two is partly due to most funds in Hyperliquid being used for trading rather than being locked into smart contracts on-chain, and partly because Hyperliquid has two virtual machines: HyperCore and HyperEVM. Their relationship is akin to that of a main chain and a side chain, where the commonly used Hyperliquid exchange operates on the former, while other ecosystem projects are deployed on the latter.
Therefore, the USDC deposited in Hyperliquid Bridge will be divided into two flows, and the funds counted by DefiLlama are only from HyperEVM, which means that half of the funds on Hyperliquid have not yet truly flowed into its ecosystem, implying huge development potential.
In addition to a continuous influx of funds, the number of transactions and daily active addresses on HyperEVM has also shown significant growth over the past month, indicating that as the price of HYPE rises, more users are starting to explore more opportunities within the HyperEVM ecosystem. Next, the author will briefly introduce several potential participation opportunities.
Figure 3, On-chain Interaction Data of HyperEVM, Source: Purrsec
Felix
Felix is a DeFi protocol that provides decentralized stablecoin feUSD and lending services, allowing users to deposit HYPE or UBTC as collateral to borrow feUSD. The current TVL is 340M, with collateral assets valued at 292M, making it the second largest DeFi project in the HyperEVM ecosystem.
Figure 4, TVL of Felix, Source: DefiLlama
Figure 5, Issuance of feUSD, Source: Purrsec
Although the recent growth in TVL primarily comes from the rise in HYPE, the collateral stablecoin feUSD has also seen rapid growth over the past two months, with a total issuance of 74M, a loan interest rate of 12%, and a borrowing APY of around 15% (plus liquidation rewards), indicating that Felix's lending business is very active.
In addition to its own stablecoin feUSD, users can also borrow three types of stablecoins on Felix: USDe, USDT0, and USDhl. Although the returns are lower except for USDhl, it offers more options for native Hyperliquid users, allowing them to borrow corresponding stablecoins flexibly according to their needs and participate in different ecosystems.
Figure 6, Other Stablecoins Available for Lending on Felix, Source: Felix
It is worth noting that USDhl is a stablecoin newly launched by Felix on June 12, with underlying assets consisting of short-term US Treasury bills issued by M0, providing a 4% annualized return. The income generated will be used entirely to repurchase $HYPE and distribute it to users of USDhl, with rewards distributed every two weeks, stimulating the borrowing demand for USDhl, with borrowing rates reaching 18%. The rewards behavior is shown in the table below:
Figure 7, User Behavior of USDhl Reward Program, Source: USDhl Docs
It should be noted that simply trading in the USDhl/USDC spot market on HyperCore can yield a 50% reward pool allocation, so if you want to maximize returns, the following strategies can be referenced:
By trading volume on HyperCore, liquidity providers can receive triple weight bonuses, maximizing the points earned through this method.
Providing liquidity in designated stablecoin pools such as feUSD/USDhl and USDT0/USDhl carries a lower risk of impermanent loss.
Providing liquidity in other non-stablecoin pools carries a higher risk of impermanent loss.
Providing USDhl on Felix as a borrower can simultaneously earn points and an 18% lending return.
Hyperbeat
Hyperbeat is a one-stop yield aggregation protocol in the HyperEVM ecosystem, providing multiple services such as revenue vaults, liquidity staking, lending, and token exchange, allowing users to complete all DeFi operations on Hyperbeat and maximize capital utilization efficiency with different strategies.
Figure 8, Staking HYPE on Hyperbeat to Obtain Liquidity Staking Tokens stHYPE, Source: Hyperbeat
Figure 9, Lending Pool of Hyperbeat, Source: Hyperbeat
Figure 10, Revenue Vault of Hyperbeat, Source: Hyperbeat
Currently, Hyperbeat's TVL is 126M, primarily from liquidity staking and revenue vaults, the latter accounting for 84%, and is also the fastest-growing part of Hyperbeat's business. Therefore, the author will focus on two more popular vaults: Hyperbeat USDT and Hyperbeat Ultra HYPE.
Figure 11, Data Panel of Hyperbeat USDT, Source: Hyperbeat
The Hyperbeat vault panel can basically be divided into three parts:
Basic Information
Including vault introduction, APY, TVL, personal holdings, and obtainable project points. Taking Hyperbeat USDT as an example, the vault's APY is 21.06%, TVL is 29.07M, and points can also be additionally accumulated for Hyperbeat, Hypurrfi, HyperSwap, Sats, and Resolv.Revenue Strategy
Further describes more details about the vaults, including the vault manager, fees, exchange ratios, and the composition of revenue strategies. From Figure 8, the vault manager of Hyperbeat USDT is MEV Captal, the platform charges a 1% fee, and the manager takes a 20% performance fee, with the main strategies shown in the table below:
Participation Agreement Operation Allocation Ratio: Hyperliquid HYPE Basis Trading 63%, Hyperliquid FARTCOIN Basis Trading 28%, Hypurrfi Providing USD0 and Lending HYPE 4%, IDLE USDT0/USD0 e3%, HyperSwap stHYPE/HYPE 1%, HyperSwap USDT0/USD0 e1%
Visualization Chart
Able to see the complete TVL and APY changes of the vault, but the current APY data seems to be not yet integrated; currently, only the TVL data can be seen.
Figure 12, Vault Panel of Hyperbeat Ultra HYPE, Source: Hyperbeat
Hyperbeat Ultra HYPE is a revenue vault constructed based on WHYPE. Unlike Hyperbeat USDT, this vault's strategy can comprehensively participate in multiple Hyperliquid ecosystem projects and accumulate points, suitable for long-term players who are optimistic about Hyperliquid's airdrops. The revenue composition of this vault is as follows:
Participation Agreement Operation Allocation Ratio: stHYPE Staking HYPE 36.93%, Hypurrfi Providing Liquidity to Isolated WHYPE Pool 23.11%, Hyperlend wstHYPE Circular Lending 11.63%, Hypurrfi wstHYPE Circular Lending 11.4%, Cash Holding HYPE Spot 8.77%, Valantis Providing Liquidity 7.23%, Hyperbeat Using wstHYPE for Circular Lending in Morphobeat 0.94%
It should be noted that regardless of which vault, the current APY values are ideal, and they may fluctuate with market conditions. Especially the returns offered by Hyperbeat USDT appear attractive, but a closer look at their strategies reveals that most of the rewards from this vault come from basis trading of HYPE and FARTCOIN, which increases the risk.
Moreover, the fees charged by each vault vary. The 21% APY of Hyperbeat USDT effectively requires deducting a 1% platform fee and a 20% performance fee, so the actual APY that investors can obtain is around 16%. Users need to understand all the information and related risks of the vault before participating to avoid discrepancies between expected returns and actual rewards.
Looped HYPE
Looped HYPE is a liquidity yield aggregation protocol where users deposit HYPE into Looped HYPE and receive LST token LHYPE. Then, Looped HYPE will automatically allocate deposited HYPE to various DEXs, lending, and liquidity staking protocols in the Hyperliquid ecosystem, using circular staking or lending to amplify the capital utilization rate of positions, thereby increasing the overall APY (currently 3.5%) and point bonuses for various projects. Its strategy and allocation ratios are as follows:
Figure 13, Revenue Strategy of Looped HYPE, Source: Staking Rewards
Strictly speaking, the author believes that Looped HYPE is not a complete project but rather a simple yield vault strategy within Hyperbeat, suitable for investors seeking stable returns, accumulating project airdrop points, and avoiding hassle.
The reason the author introduces this project is that Looped HYPE has launched a reward program for early participants, where when the protocol's TVL grows to a certain stage, a certain percentage of the native token LOOP will be unlocked for holders of LHYPE. The detailed unlocking plan is shown in the table below:
Figure 14, Reward Program of Looped HYPE, Source: Looping Collective
Currently, the TVL of Looped HYPE is 58M, having just completed the second phase of reward distribution. The next phase's target is to unlock 70M LOOP tokens as rewards when the protocol's TVL reaches 100M, averaging 1 dollar deposited to receive 0.7 LOOP.
Users can stake the LOOP they receive to earn more reward weight, allowing them to obtain more LOOP airdrops during the next reward unlock phase.
Figure 15, Unlock Schedule of LOOP, Source: Looping Collective
However, it is important to note that although rewards are allocated to users each time the TVL reaches a target, the token shares of the official fund and partners will also have relatively large unlocks, which may affect the price performance of LOOP (as of the time of writing, it was $0.024). Therefore, while this is an opportunity to reward early participants, it is also a game with the project side, requiring careful assessment before participation.
Extended Thoughts and Summary
There are many blue-chip projects worth paying attention to in the HyperEVM ecosystem, such as Hyperlend, Hypurrfi, HyperSwap, and Kitten Finance, all playing crucial roles in the HyperEVM ecosystem. However, due to length constraints, the author has only selected a few projects that currently have more arbitrage opportunities. Readers interested in other projects can explore further.
Interestingly, since Hyperliquid itself is currently the largest on-chain perpetual contract exchange, and it also supports some spot order book trading, the top three TVLs in the HyperEVM ecosystem are all lending protocols rather than DEXs, which shows a significant difference from other ecosystems. It also indicates that funds are still concentrated in Hyperliquid for trading, further stimulating borrowing demand, and shows that the HyperEVM ecosystem has not yet been properly recognized by the market, making it still a good time to participate in the ecosystem for future airdrop opportunities.
Additionally, the author has observed that the current ecosystem project information of HyperEVM is very transparent, as it is usually actively provided on official websites or white papers, unlike many DeFi projects that require users to look up information on-chain.
The block explorer Purrsec also displays token prices, holders, price changes, holding ratios, and visualization charts, allowing for clear browsing of any desired information, providing a very smooth user experience, and enabling more general users to monitor the project's movements using on-chain data.
In summary, the author believes that during market turbulence, places where funds gather often present more opportunities. Hyperliquid, as the largest on-chain contract exchange, has daily trading volumes and fee revenues that are unmatched, and HYPE has also recently reached new highs, with its ecosystem set to explode soon. Additionally, 38% of the total HYPE has not yet been airdropped. Therefore, the author considers this a good opportunity for ambush and recommends keeping a close eye on the development of HyperEVM.