Hyperliquid Revolutionizes DeFi with Composable Liquidity

The concept that liquidity breeds liquidity has become a guiding principle for Hyperliquid, a decentralized exchange that has gained significant traction among traders, particularly those interested in perpetual futures or 'perps'. Founded by Harvard alumni Jeff Yan and a pseudonymous developer known as iliensinc, Hyperliquid has been live since the beginning of 2023 and has capitalized on its substantial order book volume by introducing a novel concept: composability. This concept, inspired by decentralized finance (DeFi), allows permissionless smart contracts to seamlessly integrate, much like LEGO blocks, to create new tokenized financial products. Hyperliquid's Ethereum-compatible HyperEVM is directly connected to its high-performance, homegrown HyperCore blockchain. This setup enables other applications to build upon the platform's shared liquidity, rather than fragmenting it. As a result, applications such as wallets or even other exchanges can utilize Hyperliquid as a backend, offering perps trading and other services without having to develop their own infrastructure. The more builders deploy on and integrate with Hyperliquid, the deeper the liquidity becomes, and the more diverse the assets available. This, in turn, creates a snowball effect, where network effects compound. Currently, hundreds of developers, including prominent names like MetaMask, Phantom wallet, and the South African exchange VALR, are utilizing Hyperliquid's 'builder codes' system, which has generated approximately $90 million in revenue, according to Flowscan. The platform has garnered widespread acclaim, with many praising its innovative approach. 'Hyperliquid is more than just a perpetuals exchange; it's akin to AWS for finance,' said Hyunsu Jung, CEO of Hyperion DeFi, the first U.S.-listed treasury company focused on Hyperliquid's native token, HYPE. 'The perps aspect is just one part of it; this is essentially a layer-one blockchain infrastructure. The service offered is, in fact, liquidity, and ensuring that all these markets function smoothly, allowing anyone to build on top of them,' Jung explained in an interview. Similar to AWS for cloud infrastructure, builders have full control over their user interface and own their users, while Hyperliquid provides the underlying liquidity and execution. Integrators who utilize builder codes can charge fees based on the notional size of their users' trades without having to develop or maintain the backend or liquidity. 'Builder codes enable integrators to focus on delivering exceptional user experiences, while Hyperliquid handles the backend for liquidity and execution,' said Sterling Barnett, business development lead at Hyperliquid Labs, via email. 'Integrators can offer their users best-in-class on-chain liquidity and institutional-grade infrastructure, while earning fees on every trade.' For an application like MetaMask, which boasts over 100 million users worldwide, integrating with Hyperliquid's EVM module makes perfect sense. Since October 2025, MetaMask has provided its users with self-custodial access to perps directly from the wallet. As a wallet, MetaMask has the advantage of not requiring a decentralized app (dApp) connection, and fund transfers are streamlined, allowing users to trade directly with the tokens they already hold, according to Matthieu Saint Olive, Staff Product Manager at MetaMask. The integration enables MetaMask to plug into its money account, social login, and follow trading, while Hyperliquid handles matching, the oracle, and the margin engine. 'Matching orders is genuinely challenging, and Hyperliquid excels at it, so we don't attempt to rebuild it,' said Saint Olive via email. 'By routing orders directly to the Hyperliquid order book, MetaMask Perps offers some of the best liquidity and execution quality available anywhere.' MetaMask has observed growth beyond crypto, with commodities and equities becoming increasingly popular, according to Saint Olive. 'Real-world-asset markets have grown from a small fraction of perp volume at the start of 2026 to roughly a quarter of it today,' he said. In terms of fees, MetaMask charges a flat 0.1% builder fee, which is transparent and has no hidden spread or execution costs, allowing traders to verify exactly what they paid. 'We believe that transparency is a significant advantage, and we're actively exploring more innovative pricing models, as we want the economics to be a reason people choose MetaMask, not a source of friction,' Saint Olive added. It's more surprising to find a large centralized exchange, like VALR, relying on Hyperliquid's perps order book for liquidity. However, taking the Hyperliquid route has proven to be a viable option for the South Africa-based exchange, which is ranked among the largest exchanges in Africa, with close to two million retail customers and approximately 2,000 corporate institutional customers, according to the exchange's CEO and co-founder, Farzam Ehsani. Initially, VALR built all the necessary infrastructure in-house, including risk and liquidation engines, Ehsani said. Despite the effort, the team struggled to gain traction with perpetual futures due to liquidity and volume concerns. 'Our volume is our volume; we are truthful and transparent and don't engage in wash trading or similar practices,' Ehsani said in an interview. 'We saw Hyperliquid bringing together a massive amount of volume and market participants from around the world and thought, 'Why not plug into that?' ' Looking ahead, as major players like Robinhood, Coinbase, and Intercontinental Exchange fully embrace perps, opportunities for cross-venue arbitrage will emerge, according to Jung of Hyperion. 'Imagine maintaining one position on Robinhood, for example, and the other side of the position on Hyperliquid,' Jung said. 'With a significant amount of non-toxic flow, which is when more retail users are simply entering and exiting the market, you'll be able to see more organic mechanisms for funding rates.'