Hyperliquid Revolutionizes DeFi with Composable Liquidity

The concept that liquidity breeds liquidity is being put to the test by Hyperliquid, a decentralized exchange that has gained popularity among traders, particularly those interested in perpetual futures or 'perps'. Launched in 2023 by Harvard alumni Jeff Yan and iliensinc, Hyperliquid has been capitalizing on the depth and volume of its order book by introducing the concept of composability. This DeFi concept allows permissionless smart contracts to interlock seamlessly, much like money LEGO blocks, creating the foundation for novel tokenized financial products. The Ethereum-compatible HyperEVM is directly connected to Hyperliquid's high-speed, proprietary 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, providing perps trading and other services to their users. The effects of this integration are multifaceted. With more builders deploying on and integrating Hyperliquid, the platform's liquidity deepens, the variety of assets expands, and network effects become more pronounced. Presently, hundreds of developers, including prominent names like MetaMask, Phantom wallet, and VALR, are utilizing Hyperliquid's 'builder codes', generating approximately $90 million in revenue. Hyperion DeFi CEO Hyunsu Jung praises the platform, stating, 'Hyperliquid is more than just a perpetuals exchange; it's akin to the AWS for finance.' Jung highlights the platform's layer-one blockchain infrastructure, emphasizing its role in providing liquidity and facilitating seamless market operations. Similar to AWS, builders on Hyperliquid maintain full control over their user interface and own their users, while the platform handles 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 or maintain the backend or liquidity. This approach has been well-received by integrators, with Sterling Barnett, Business Development Lead at Hyperliquid Labs, noting, 'Builder codes allow integrators to focus on delivering exceptional user experiences, while Hyperliquid provides the necessary backend for liquidity and execution.' For applications like MetaMask, integrating with Hyperliquid's EVM module has been a strategic move. Since October 2025, MetaMask has provided its users with self-custodial access to perps directly from the wallet. This integration has streamlined fund transfers, enabling users to trade using the tokens they already hold. According to Matthieu Saint Olive, Staff Product Manager at MetaMask, the wallet's integration with Hyperliquid has been seamless. 'Matching orders is genuinely challenging, and Hyperliquid excels at it, so we don't attempt to rebuild it,' Saint Olive stated. By routing orders directly to the Hyperliquid order book, MetaMask Perps offers some of the best liquidity and execution quality available. The growth of MetaMask's perps trading has been notable, with Saint Olive mentioning that the platform is witnessing expansion beyond crypto into areas like commodities and equities. '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, ensuring transparency and avoiding hidden spreads or execution costs. Saint Olive emphasized the importance of transparency, stating, 'We believe that transparency is a significant advantage and are actively exploring innovative pricing models to make our economics a reason people choose MetaMask, not a source of friction.' The adoption of Hyperliquid's perps order book by large centralized exchanges has been a notable development. South Africa-based exchange VALR, one of the largest exchanges in Africa, has opted to utilize Hyperliquid's liquidity. Despite initially building their own infrastructure, including risk and liquidation engines, the team at VALR found it challenging to achieve sufficient volume and liquidity for their perpetual futures. VALR CEO and co-founder Farzam Ehsani acknowledged the difficulties, stating, 'Our volume is our volume; we are truthful and transparent and don't engage in wash trading or similar practices.' Ehsani noted that Hyperliquid's ability to bring together a large amount of volume and market participants from around the world made it an attractive option for VALR. As the market continues to evolve, opportunities for cross-venue arbitrage are likely to emerge. According to Jung, when major players like Robinhood, Coinbase, and Intercontinental Exchange fully enter the perps market, there will be opportunities for traders to capitalize on differences in funding rates across venues. 'Imagine maintaining one position on Robinhood and the other side of the position on Hyperliquid,' Jung said. 'With a significant amount of non-toxic flow, which is when retail users are simply entering and exiting the market, you'll be able to see more organic mechanisms for funding rates.'