Hyperliquid Revolutionizes DeFi with Composable Liquidity

The concept that liquidity breeds liquidity has proven true for Hyperliquid, a decentralized exchange that has become a top choice for traders of perpetual futures. Founded by Harvard classmates Jeff Yan and iliensinc, Hyperliquid launched in 2023 and has since capitalized on its substantial order book volume by providing firms with the ability to compose with its shared liquidity. This concept, known as composability, allows permissionless smart contracts to come together like building blocks, creating new tokenized financial products. Hyperliquid's Ethereum-compatible HyperEVM connects directly to its high-speed HyperCore blockchain, enabling other applications to utilize the platform's shared liquidity without fragmentation. As a result, applications such as wallets and exchanges can leverage Hyperliquid as a backend to offer perps trading and other services. The platform has seen significant growth, with hundreds of developers, including major players like MetaMask and VALR, utilizing its 'builder codes' system, generating over $90 million in revenue. Hyperliquid's infrastructure provides builders with full control over the user interface while handling the underlying liquidity and execution. This has led to praise from industry leaders, with Hyunsu Jung, CEO of Hyperion DeFi, comparing Hyperliquid to AWS for finance, providing a layer-one blockchain infrastructure for builders. The platform's builder code integrators can charge fees on user trades without needing to develop or maintain liquidity, focusing instead on delivering a seamless user experience. For example, MetaMask has integrated Hyperliquid's EVM module, allowing users to access perps directly from their wallets. This partnership has streamlined fund transfers and provided users with self-custodial access to perps. According to Matthieu Saint Olive, Staff Product Manager at MetaMask, the integration has been successful, with users able to trade directly with the tokens they hold, and MetaMask handling the user interface while Hyperliquid manages the backend. The partnership has also led to growth beyond crypto, with real-world-asset markets increasing from a small portion of perp volume to roughly a quarter. In terms of fees, MetaMask charges a flat 0.1% builder fee, with full transparency and no hidden costs. The exchange VALR has also partnered with Hyperliquid, using its perps order book to provide liquidity for its customers. According to Farzam Ehsani, CEO and co-founder of VALR, the partnership has been beneficial, as the exchange struggled to achieve volume and liquidity with its in-house infrastructure. The future of perps trading looks promising, with opportunities for cross-venue arbitrage emerging as major players like Robinhood and Coinbase enter the market. As Jung notes, this will create opportunities for traders to maintain positions on multiple platforms, taking advantage of non-toxic flow and organic funding rate mechanisms.