Hyperliquid Revolutionizes DeFi with Composable 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 a pseudonymous developer known as iliensinc, Hyperliquid has been live since the beginning of 2023 and is capitalizing on the volume and depth of its order book by offering a unique concept known as composability. This concept, derived from decentralized finance (DeFi), allows permissionless smart contracts to interlock seamlessly, much like LEGO blocks, to create novel tokenized financial products. Hyperliquid's Ethereum-compatible HyperEVM is directly connected to its high-speed, proprietary HyperCore blockchain, enabling other applications to build upon the platform's shared liquidity without fragmenting it. In essence, applications such as wallets or even other exchanges can leverage Hyperliquid as a backend to offer perps trading and other services, thereby deepening liquidity, expanding the variety of assets, and compounding network effects. Hundreds of developers, including prominent names like MetaMask, Phantom wallet, and the South African exchange VALR, are utilizing Hyperliquid's 'builder codes,' generating approximately $90 million in revenue, according to Flowscan. The platform has garnered significant praise from its growing user base. Hyunsu Jung, CEO of Hyperion DeFi, describes Hyperliquid as 'the AWS for finance,' emphasizing its role as a layer-one blockchain infrastructure that provides liquidity and execution, allowing builders to focus on delivering exceptional user experiences. Similar to AWS, builders maintain full control over their users and user interfaces while Hyperliquid handles the underlying liquidity and execution. The 'builder codes' enable integrators to charge fees based on the notional size of their users' trades without needing to develop or maintain the backend or liquidity. Sterling Barnett, business development lead at Hyperliquid Labs, highlights the benefits of this approach, stating that integrators can focus on what they do best while Hyperliquid serves as the backend for liquidity and execution, allowing them to offer their users top-notch on-chain liquidity and institutional-grade infrastructure. For applications like MetaMask, integrating with Hyperliquid's EVM module makes sense, as it provides self-custodial access to perps directly from the wallet. MetaMask has been offering this feature to its over 100 million users worldwide since October 2025. The advantage of being a wallet is that there's no need for a decentralized app (dApp) connection, and fund transfers are streamlined, allowing users to trade directly with the tokens they already hold. Matthieu Saint Olive, Staff Product Manager at MetaMask, notes that Hyperliquid handles matching, oracles, and the margin engine, while MetaMask focuses on the user experience. Saint Olive praises Hyperliquid's order matching capabilities, stating that 'matching orders is genuinely hard, and Hyperliquid is excellent at it.' By routing orders directly to the Hyperliquid order book, MetaMask Perps offers some of the best liquidity and execution quality available. MetaMask is seeing growth beyond crypto, with real-world asset markets now accounting for roughly a quarter of perp volume. In terms of fees, MetaMask charges a flat 0.1% builder fee with no hidden spread, ensuring transparency. The platform is exploring innovative pricing models to make its economics a key advantage. It's notable that even large centralized exchanges, such as VALR, are leveraging Hyperliquid's perps order book for liquidity. Despite initially building their infrastructure in-house, including risk and liquidation engines, the team at VALR found it challenging to achieve significant volume and liquidity for their perpetual futures. Farzam Ehsani, CEO and co-founder of VALR, acknowledges that plugging into Hyperliquid's vast volume and global market participants was a strategic decision. Looking ahead, as major players like Robinhood, Coinbase, and Intercontinental Exchange expand into perps, opportunities for cross-venue arbitrage will emerge, according to Jung. This could enable users to maintain positions on multiple platforms, such as Robinhood and Hyperliquid, and capitalize on non-toxic flow to generate organic funding rate mechanisms.