Hyperliquid Revolutionizes DeFi with Composability and Shared Liquidity

The concept that liquidity breeds liquidity is particularly relevant in the context of Hyperliquid, a decentralized exchange that has gained popularity among traders, especially those interested in perpetual futures or 'perps'. Founded by Harvard alumni Jeff Yan and the pseudonymous developer iliensinc, Hyperliquid has been live since early 2023 and is now capitalizing on the depth and volume of its order book by introducing a concept akin to composability. This DeFi concept allows permissionless smart contracts to interlock seamlessly, much like financial LEGO blocks, to create new tokenized products. Hyperliquid's Ethereum-compatible HyperEVM is directly connected to its high-performance, homegrown HyperCore blockchain. This setup allows other applications to build upon the platform's shared liquidity, rather than fragmenting it. Essentially, applications such as wallets or even other exchanges can utilize Hyperliquid as a backend to offer perps trading and other services, promoting a more unified ecosystem. As more developers integrate with Hyperliquid, the platform experiences a deepening of liquidity, an expansion of available assets, and a compounding of network effects. 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 significant praise from its growing community of supporters. 'Hyperliquid is more than just a perpetuals exchange; it's akin to the AWS of 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 notable, but this is essentially a layer-one blockchain infrastructure. The primary service offered is liquidity, ensuring that all markets function optimally and allowing anyone to build upon them,' Jung explained in an interview. Similar to AWS in the context of cloud infrastructure, builders maintain ownership of their users and have full control over the user interface, while Hyperliquid provides the underlying liquidity and execution. Integrators of builder codes can charge fees based on the notional size of their users' trades without needing to develop the backend or maintain liquidity. 'Builder codes enable integrators to focus on delivering exceptional user experiences, while Hyperliquid serves as the backend for liquidity and execution,' stated Sterling Barnett, business development lead at Hyperliquid Labs, via email. 'Integrators can offer their users top-tier on-chain liquidity and institutional-grade infrastructure, earning fees on every trade.' For an application like MetaMask, which boasts over 100 million users worldwide, integrating with Hyperliquid's EVM module is a logical step. 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 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 plugs into MetaMask's money account, social login, and follow trading, leaving Hyperliquid to handle 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 is witnessing growth beyond crypto, venturing into areas like commodities and equities, according to Saint Olive. 'Real-world-asset markets have evolved from a small fraction of perp volume at the start of 2026 to roughly a quarter of it today,' he noted. In terms of fees, MetaMask charges a flat 0.1% builder fee, disclosed upfront with no hidden spread and nothing buried in execution, allowing traders to verify exactly what they paid. 'We believe 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 relying on Hyperliquid's perps order book for liquidity. However, taking the Hyperliquid route has proven beneficial for the South Africa-based exchange VALR, ranked among the largest exchanges in Africa with close to two million retail customers and about 2,000 corporate institutional customers, according to the exchange's CEO and co-founder, Farzam Ehsani. Initially, VALR built all its infrastructure in-house, including risk and liquidation engines, Ehsani said. Despite the effort, the team found it challenging to achieve significant volume and liquidity for perpetual futures. 'So, perpetual futures on our own books didn't take off as we had hoped, primarily due to liquidity and volume concerns,' Ehsani said candidly in an interview. 'Our volume is genuine; we are transparent and don't engage in wash trading or similar practices. We observed Hyperliquid bringing together a huge 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 expand their perps offerings, there will be opportunities for cross-venue arbitrage, 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 lot of non-toxic flow, which occurs when more retail users are simply entering and exiting the market, you'll be able to see more organic mechanisms for funding rates.'