Revolutionizing DeFi: Hyperliquid Takes Crypto Perpetuals to the Next Level

The concept that liquidity breeds liquidity is particularly relevant to Hyperliquid, a decentralized exchange that has gained popularity among traders, especially those interested in perpetual futures or 'perps'. Founded by Harvard classmates Jeff Yan and iliensinc, Hyperliquid has capitalized on its extensive order book volume by introducing a concept similar to composability in DeFi, where permissionless smart contracts can be combined like building blocks to create new financial products. The platform's Ethereum-compatible HyperEVM is directly connected to its high-speed HyperCore blockchain, allowing other applications to utilize its shared liquidity without fragmentation. This enables wallets, exchanges, and other applications to integrate Hyperliquid as a backend, providing perps trading and other services. As more developers integrate with Hyperliquid, the platform's liquidity deepens, and the variety of assets expands. Hundreds of developers, including prominent names like MetaMask and VALR, have utilized Hyperliquid's 'builder codes', generating $90 million in revenue. According to Hyunsu Jung, CEO of Hyperion DeFi, 'Hyperliquid is more than just a perpetuals exchange; it's akin to AWS for finance, providing a layer-one blockchain infrastructure that offers liquidity and execution'. Similar to AWS, builders on Hyperliquid have full control over the user interface and own their users, while the platform provides the underlying liquidity and execution. Integrators can charge fees on the notional size of their users' trades without needing to develop the backend or maintain liquidity. The integration of Hyperliquid with MetaMask, a wallet with over 100 million users, has enabled users to access perps directly from the wallet. MetaMask has seen growth beyond crypto, with real-world asset markets now accounting for a quarter of perp volume. In terms of fees, MetaMask charges a flat 0.1% builder fee with no hidden spread or execution costs. The transparency of fees is seen as a major advantage, and the company is exploring innovative pricing models to make the economics a reason for users to choose MetaMask. Even large centralized exchanges like VALR have opted to use Hyperliquid's perps order book for liquidity. VALR's CEO, Farzam Ehsani, stated that despite building their own infrastructure, they struggled to gain volume and liquidity for perpetual futures. By integrating with Hyperliquid, they can now offer their customers better liquidity and execution. Looking ahead, the growth of perps on platforms like Robinhood and Coinbase is expected to create opportunities for cross-venue arbitrage, according to Jung. This will enable users to maintain positions on multiple platforms, creating more organic mechanisms for funding rates.