In the GMX-made world of different PerpDEXes, two things are usually key — efficiency (including accuracy of prices and whether not trades hit when they’re supposed to) and liquidity (how much leverage can you take and how many different token pairs are listed). has been one of the most forked protocols out there, but in a field that’s constantly trying to innovate, I feel like it was only a matter of time before we saw a new protocol to be able to do things better and/or faster. Hyperliquid, one of the newest kids on the block, is making a run at doing both.
Today we’re going to do a deep-dive on some of Hyperliquid’s features and how they’ve managed to create an up only chart in TVL — making platforms like GMX start to seem like slow-moving dinosaurs.
Trading pairs
If you’ve been following them on , the Hyperliquid team seems to be announcing new tokens that can be traded with leverage nearly every single day. Here’s just what they newly listed so far this month:
$ORBS — Added October 16th with up to 10x leverage
$KAS— Added October 13th with up to 3x leverage
$REQ — Added October 11th with up to 5x leverage
$BIGTIME — Added October 11th with up to 10x leverage
$CANTO — Added October 9th with up to 3x leverage
$BNT— Added October 8th with 5x up to leverage
$ARK — Added October 6th with up to 5x leverage
$RDNT — Added October 3rd with up to 5x leverage
$OGN — Added October 1st with up to 3x leverage
For comparison’s sake, GMX.io has this many trading pairs (9) on V2 in total. And if what you want to trade just isn’t there, I’d recommend going to their and asking because there’s probably a good chance it will get listed in the future.
Hyperliquid L1 — Hyperliquid’s own L1 network
One of the reasons why they’re able to move so fast is because of their own L1-network — allowing the Hyperliquid team to tweak everything from gas fees, MEV, slippage, etc., in order to make everything as fast and efficient as possible. In other words, Hyperliquid L1 is solely dedicated to allow trades to run through in the most optimized manner, so much in fact that that the L1 can support 20,000 operations/second
Another benefit about being all on their own appchain (and also probably one of the most essential features) is their onchain orderbook — something that is much needed after hearing so much of the shady dealings that went on with FTX. From what I’ve read, the Hyperliquid team has been fully intentional in making everything as on-chain, decentralized, trustless and permissionless as possible, and by having an on-chain orderbook with full transparency of every executed transaction, Hyperliquid L1 makes that possible.
Similar to many different perp DEXes liquity pools, the HLP vault is the backbone for liquidity for Hyperliquid, but with a few key differences:
The HLP Vault is an Automated Market-Maker: Similar to many DEXes that use AMM’s, any token is able to be added easily (which is why we see so many tokens listed so rapidly on Hyperliquid).
Even though it’s an AMM, HLP doesn’t collect any fees: All profits and losses made by traders are shared directly across the HLP pool based on the proportion of liquidity that each person shares.
There are Protocol Vaults, but anyone can spin up their own Vault (or invest in others): With as little as 100 $USDC, you can become a “Vault Leader” and open your own vault and employ your own strategies. This is a great way if you’re banding together with others from a community with a specific strategy in mind
And last but not leastdegen interest rates: It should probably not go without saying that entering into any counterparty pool has risks when traders do well, but I would imagine that rates will continue to be high (48.63% APR at time of writing) if Hyperliquid continues to offer degen trading opportunities on small marketcap and highly volatile tokens. As viewable from their stats page, traders will win occasionally but overall they should lose:
A final consideration on the $HLP vaults is that they do have a 4-day deposit lock-up period upon deposit. I’ve been seeing more and more deposit lock-up fees on different protocols lately, most likely because they don’t want a rapid instantaneous rug of liquidity from the vault. That being said, the vault is entirely community owned, with no fees getting in and out.
Once again there are no fees on use of the $HLP vault, but there are fees for trading on the platform and these include:
- Takers pay a flat 0.025% fee
- Makers receive a 0.02% bps rebate
From what I could tell, none of the fees are taken by the team, for according to their , 40% goes to the insurance fund, 20% to open interest rewards, and 40% to $HLP liquidity providers.
The Insurance Fund’s purpose is for exactly how it sounds — to cover for “special circumstances where the platform behaved unexpectedly,” i.e. hacks, exploits, etc. To date, there was a minor issue last June where a manipulated CEX price attack allowed a user to make roughly $37,000 which can you read about here:
The TLDR is that Hyperliquid was too reliant on CEXes as the source of its token pricing, and since then pricing (and their orderbook) are now on-chain to help prevent exploits like this from happening in the future.
The model that Hyperliquid is bringing forth is a perfect application of what an appchain should be it demonstrates how efficient the blockchain can get when processing trades. I’m not much of a trader myself, but I do like the idea of being able to play the part of the casino, especially when the gambling chips are highly volatile tokens (even by crypto standards).
With how quickly the DeFi space moves, only time will tell if whether or not this will be a one-hit-wonder-fad that will die out quick, or if Hyperliquid will continue to gain more traction to become the next mainstay PerpDEX. However, given how quickly the Hyperliquid team is able to pivot, I think that we finally have a PerpDex protocol that can match the speed at which Crypto’s narratives do.
Interested in trying Hyperliquid out? Feel free to use my unique referral code: https://app.hyperliquid.xyz/join/CRYPTOSWITH, otherwise you can one easily by joining the #referrals channel on their
And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. If you want to get access to all my draft links or get an idea about what’s next on my docket before I publish, find me on Friend.tech, where I share all that information in my chatroom. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
