Hyperliquid is a decentralised perpetual futures exchange built on its own custom Layer 1 blockchain — designed to deliver the performance and user experience of a centralised exchange while maintaining non-custodial, on-chain settlement. By 2024, Hyperliquid had grown to become the highest-volume decentralised perp exchange globally, surpassing dYdX and GMX combined on many trading days.
THE HYPERLIQUID ARCHITECTURE
Unlike most DEX perp platforms built on existing chains, Hyperliquid runs on HyperBFT — a custom consensus mechanism optimised for high-frequency trading. Key performance characteristics: ~100,000 orders per second throughput. Block latency under 1 second. On-chain order book (not AMM-based) — matching engine runs directly on-chain with Ethereum-like security. This architecture allows Hyperliquid to offer a genuine order book trading experience (with limit orders, stop-losses, bracket orders) rather than the pool-based model of GMX or dYdX.
HLP: HYPERLIQUIDITY PROVIDER
HLP (HyperLiquidity Provider) is Hyperliquid's native market-making vault. Users deposit USDC into HLP, which algorithmically provides liquidity across all perpetual markets. HLP earns trading fees and liquidation proceeds, distributing yields to depositors. HLP has consistently generated positive returns while providing the deep liquidity that makes Hyperliquid competitive with centralised exchanges.
THE HYPE TOKEN AND AIRDROP
In November 2024, Hyperliquid launched the HYPE governance token via one of crypto's most generous airdrops: 31% of total supply distributed to early users. No VC allocation — the entire team allocation was reduced in favour of community distribution. The airdrop was worth $3-12,000+ per eligible wallet at launch prices. This "fair launch" approach generated enormous goodwill and positioned HYPE for rapid adoption. HYPE is used for: protocol governance, staking to secure the HyperBFT consensus, and gas fees.
HYPERLIQUID VS COMPETITORS
vs dYdX: dYdX v4 also uses a custom Cosmos chain. Hyperliquid has consistently outperformed in volume since launch. vs GMX: GMX uses an AMM model on Arbitrum — no order book. Hyperliquid offers superior price execution for professional traders. vs Binance Futures (CEX): Hyperliquid offers comparable functionality with full self-custody and on-chain settlement.
A MAJOR SECURITY INCIDENT
In March 2025, Hyperliquid faced a significant test when an attacker manipulated low-liquidity perpetuals (JELLY token) to attempt to drain the HLP vault. The Hyperliquid Foundation controversially used validator consensus to delist the affected market and settle positions — raising questions about the true decentralisation of the platform's emergency response mechanisms.
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2 Factor Authentication is a security measure with two layers. It is used by the majority of cryptocurrency exchanges. To log in, you must provide not only a password, but also a code obtained, for example, from the Google authenticator.
An airdrop is a method of distributing coins. End users can typically obtain coins for free or in exchange for doing a small task, such as subscribing to a newsletter, sending a tweet, or inviting others via a personal affiliate link. Cryptocurrency airdrops — the act of depositing cryptocurrency into public crypto wallets — are utilized as a marketing, liquidity creation, and network bootstrapping technique for many different types of blockchain initiatives.
Altcoin - "alternative coin" - is any kind of digital currency other than Bitcoin. Since the launch of Bitcoin, the world's first digital currency, many altcoins (as well as supporting blockchains) have been created. Altcoin digital currencies share many similarities to Bitcoin, but consistently and have significant differences. There are about 20,000 altcoins, and this number is expected to grow significantly in the coming years. Altcoins often develop Bitcoin features. Ethereum, currently the most widely used blockchain, supports digital contracts and separate applications where Bitcoin does not. Altcoins are also often created to cater to the needs of different users. The Litecoin blockchain, for example, can process payments quarterly for the duration of Bitcoin.
Cold storage is the way to store cryptocurrency offline. The word refers to the use of offline wallets that are not connected to the internet. Cold storage is the most secure way to keep cryptocurrencies since an offline currency becomes less likely to be hacked and stolen. Paper wallets, printed renditions of private keys, and offline hardware and software wallets are all examples of cold storage.
