If you trade crypto, you have likely struggled with slow transactions or high fees on decentralised exchanges. Hyperliquid changes that by offering a smooth, fast, and affordable trading experience. Built from the ground up, it combines the freedom of DeFi with the speed of a modern exchange.
Hyperliquid runs on its own blockchain and lets you trade spot, margin, and perpetual contracts, all without middlemen. Whether you are a casual trader or managing larger positions, it helps you trade quickly and efficiently.
In this guide, we break down everything about Hyperliquid: how it works, what makes it different, and why it is attracting both retail and professional traders. Let’s dive into what sets Hyperliquid apart in the world of crypto trading.
What Is Hyperliquid?
Hyperliquid is a decentralised exchange built on its own Layer-1 blockchain, designed to make crypto trading faster and easier. It combines the smooth user experience of a centralised exchange with the freedom of DeFi. You can trade without middlemen and still enjoy fast order execution, low fees, and advanced features.
Unlike most DEXs, Hyperliquid lets you access spot, margin, and perpetual trading in one place. This means you can trade cryptocurrencies using leverage, place advanced orders, and enjoy a streamlined trading flow, all without leaving the platform. Its independent blockchain and built-in order book make it possible to trade with the speed and simplicity that traders expect from traditional exchanges.
Also Read: CEX Vs DEX Explained!
Who Created Hyperliquid?
Hyperliquid was founded by Jeff Yan and Iliensinc, former classmates from Harvard. Their team includes experts from top institutions like Caltech, MIT, Citadel, and Hudson River Trading. After co-founding the centralised exchange Chameleon Trading, Jeff Yan and his team shifted focus to Hyperliquid following the collapse of FTX.
Unlike many crypto projects, Hyperliquid is entirely self-funded. This means the team has stayed independent of venture capital influence, giving them full control over the exchange’s direction. Their main goal is to build a fast, secure, and transparent trading platform for crypto traders who value both performance and ownership.
Key Features of Hyperliquid
Hyperliquid is packed with tools that help traders buy, sell, and manage crypto faster and smarter. Here are some of the key features that make it stand out.
Built on Its Own Layer-1 Blockchain
Hyperliquid runs on its own custom-built blockchain. This helps it avoid the delays and high fees found on Ethereum and other networks. By controlling its own Layer-1, Hyperliquid can optimise every part of the trading process to be faster and smoother for users.
Fast and Low-Fee Trading
Hyperliquid lets users place trades with just one click. Unlike other DEXs that require multiple confirmations, trades on Hyperliquid are nearly instant. Gas fees are kept low thanks to the platform’s streamlined blockchain and efficient transaction processing.
Spot, Margin, and Perpetual Trading
Most DEXs only support spot trades. Hyperliquid goes further by adding margin and perpetual contracts, letting traders use leverage and advanced strategies. This gives users more flexibility in how they trade, all from one platform.
Cross-Chain Deposits
Hyperliquid supports deposits from over 30 blockchains, including Ethereum, Solana, and Base. This makes it easy for traders to bring funds from other networks without complicated bridging tools or long wait times.
Developer-Friendly Ecosystem
Hyperliquid lets third-party developers build their own financial apps on its blockchain. This helps expand the platform beyond just trading, giving developers the tools to create new DeFi products and services on Hyperliquid’s fast network.
How Hyperliquid Delivers Fast Transactions?
Hyperliquid processes trades faster than most decentralised exchanges. It does this by using a smaller validator set and a new type of blockchain technology. Here’s how it works.
A More Centralised Validator Set
Hyperliquid uses just 16 validators to confirm transactions. This is much smaller than networks like Ethereum, which have hundreds of thousands. Fewer validators means faster agreement on transactions and quicker block production. While this boosts speed, it also makes the network less decentralised than some others.
Hyper BFT Consensus Mechanism
Hyperliquid runs on Hyper BFT, a special type of consensus mechanism based on Byzantine Fault Tolerance. This system allows the network to process up to 200,000 transactions per second. It also helps the blockchain remain secure, even if some validators fail or act dishonestly.
On-Chain Order Book
Most decentralised exchanges use automated market makers instead of order books because matching trades requires lots of speed. Hyperliquid’s fast blockchain lets it run a real order book, like those found on centralised exchanges. This makes trading smoother and more predictable for users.
Hyperliquid vs. Other DEXs Like Uniswap
Hyperliquid and Uniswap both let you trade crypto without a middleman, but they work very differently. Hyperliquid focuses on speed and advanced trading tools, while Uniswap prioritises decentralisation and simplicity. Here’s a quick comparison to help you see the differences clearly.
Feature | Hyperliquid | Uniswap |
Blockchain | Custom Layer-1 | Ethereum (and other chains) |
Trading Tools | Spot, Margin, Perpetuals | Spot trading only |
Order Matching | On-chain order book | Automated market maker (AMM) |
Transaction Speed | Very fast (1-click trades) | Slower, multiple confirmations needed |
Level of Decentralisation | Less decentralised (16 validators) | Highly decentralised (thousands of nodes) |
Supported Deposits | 30+ blockchains | Ethereum-based assets (mainly) |
User Experience | Centralised exchange feel | Simple DeFi experience |
What Are the Drawbacks of Hyperliquid?
Like any platform, Hyperliquid has some limitations. While it offers speed and powerful tools, there are areas where it is still developing. Here are some important drawbacks to keep in mind.
Limited Withdrawal Options
Right now, USDC is the main cryptocurrency available for withdrawals. If you want to withdraw another asset, you will first need to convert it to USDC. This adds an extra step for users who prefer to hold different cryptocurrencies.
Relative Centralisation
Hyperliquid is more centralised than many other blockchains. With only 16 validators, some users worry that the network could be controlled by a few parties. This makes it less decentralised compared to networks like Ethereum, which has hundreds of thousands of validators.
Limited Track Record
Hyperliquid is a new player in the DeFi space. Unlike older platforms, it has not yet been tested through major market crashes or major cyberattacks. While its security has held up so far, it will take time to see how it performs under serious pressure.
Also Read: Top Crypto Exit Strategies in 2025
What Is the HYPE Token?
The HYPE token is Hyperliquid’s native cryptocurrency. It was launched in 2024 through a community-first airdrop, with no venture capital involvement. Most of the supply went to users and contributors, aiming to reward the people who use and build on the platform.
Token Purpose and Launch
Hyperliquid launched HYPE by giving tokens to nearly 100,000 users in what was called one of the most valuable airdrops ever. Around 75% of the token supply was distributed to users and traders. The team behind Hyperliquid kept a portion of tokens for future development, but these won’t be sold until 2027–2028.
Key Token Utilities
HYPE is used in several ways across the Hyperliquid blockchain:
- Governance: Token holders can vote on important platform decisions.
- Gas Fees: HYPE is used to pay transaction fees on the network.
- Fixed Supply: The total supply is capped at 1 billion tokens, making it scarce.
Initial Market Performance
After its launch, HYPE quickly became one of the top 20 cryptocurrencies by market cap. Its fast growth showed strong community interest, driven by the platform’s rising trading volume and the token’s limited supply.
Also Read: How To Stake HYPE Token?
Is Hyperliquid Secure?
Hyperliquid takes security seriously, using third-party audits and a bug bounty program to find and fix vulnerabilities. While it is a newer platform, its early security efforts have been tested by real-world concerns.
In late 2024, fears of a possible hacker attack linked to North Korea caused over $250 million to be withdrawn in a short period. Despite the panic, Hyperliquid was not hacked, and no funds were stolen. This incident showed that while the platform still needs time to prove itself, its security systems held strong during a stressful event.
Conclusion
Hyperliquid is changing the way traders think about decentralised exchanges. It offers fast trades, advanced features like perpetuals, and a smooth user experience that rivals centralised platforms. While its relative centralisation and short track record raise valid questions, its strong growth and community-first approach make it one to watch.
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Frequently Asked Questions
What Makes Hyperliquid Different From Other DEXs?
Hyperliquid stands out by offering fast transactions, a built-in order book, and advanced trading features like margin and perpetuals. Unlike most DEXs, it runs on its own Layer-1 blockchain, giving it more control over speed and user experience. This combination of decentralised trading and centralised speed sets it apart from platforms like Uniswap.
Does Hyperliquid Require KYC to Trade?
No, Hyperliquid does not require KYC to trade. Users can create an account with just an email address and start trading right away. This lowers the barrier to entry and keeps the platform aligned with decentralised finance values, where privacy and accessibility are key principles.
What Can You Trade on Hyperliquid?
On Hyperliquid, users can trade spot cryptocurrencies, use margin trading for leverage, and trade perpetual contracts with no expiry date. This wide range of products lets traders access more advanced strategies than they would on most decentralised exchanges, which typically only offer spot trading.
Is the HYPE Token Required to Use Hyperliquid?
No, you do not need the HYPE token to trade on Hyperliquid. However, HYPE is used for paying gas fees and participating in governance. Holding and staking HYPE can also offer additional benefits like supporting the network’s security and earning passive staking rewards.
Is Hyperliquid Truly Decentralised?
Hyperliquid is less decentralised than networks like Ethereum. With only 16 validators and a custom consensus mechanism, it prioritises speed and user experience over full decentralisation. While the platform is not controlled by a single entity, its centralised design choices make it faster but less distributed than other Layer-1 blockchains.
