28 Apr 2025

light mode

Hyperliquid Overview: The Protocol’s Features and Functionalities

Decentralized platforms continue to improve user experience, increase transaction speed, and optimize costs. In this regard, Hyperliquid is among the top protocols, with its flagship product being a decentralized perpetual exchange.

On this page

Hyperliquid launched its testnet on Ethereum's scaling solution, Arbitrum, at the end of 2022 before transitioning to the HyperLiquid Layer 1 blockchain. Over time, the protocol expanded, adding new features and native components.  

At the time of this writing, the Hyperliquid chain ranks among the top 15 blockchains, by TVL, which stands above $674 million, according to DefiLlama.

Next, we’ll discuss different components of the Hyperliquid financial ecosystem. 

Hyperliquid DEX   

Hyperliquid is a top decentralized perpetual exchange with a current trading volume of over $1 billion, surpassing dYdX and Kine Protocol. The platform reached its all-time high in this metric on August 6, 2024, hitting $4.3 billion.

On Hyperliquid and other perpetual exchanges, traders can buy and sell contracts to speculate on cryptocurrency prices. This allows them to profit from price changes and open large positions without actually buying or selling the underlying assets.

Hyperliquid uses an on-chain order book to manage transactions and supports 133 cryptocurrencies. According to the website, the chain can handle 100,000 orders per second, offering traders low fees and instant finality. 

Traders can join Hyperliquid through their crypto wallets or email addresses. To start with a crypto wallet, they need an Ethereum-compatible wallet, such as MetaMask, and should select this option on the platform.

When using email onboarding, a user enters their email, and the network generates a new blockchain address for them. This process on Hyperliquid is decentralized and permissionless, thanks to the platform's integrated privacy solution by Privy.  

The Hyperliquid DEX supports advanced trading strategies, including Stop Loss, Take Profit, and Limit orders with up to 50x leverage. To start trading and place an order, users need to deposit USDC stablecoins.  

Hyperliquid’s Cumulative Trading Volume since March 2023. Source: DeFiLlama

Hyperliquid’s Cumulative Trading Volume since March 2023. Source: DeFiLlama

Spot Trading and Native Token Standards   

In March 2024, Hyperliquid announced support for user-deployed spot trading and two native token standards: HIP-1 and HIP-2. Unlike perpetual trading, spot trading means a trader buys an asset at a certain price and takes immediate ownership of it.

HyperLiquid’s HIP-1 token standard allows users to create and trade tokens on the blockchain. The HIP-2, on the other hand, is a mechanism automating liquidity management for HIP-1 tokens and ensuring continuous liquidity.  

The first HIP-1 native token launched on the Hyperliquid L1 blockchain became PURR, a memecoin with a 1 billion maximum supply. PURR went live on the mainnet in April 2024 after its testing stage was completed.   

HyperLiquid Vaults   

Another feature of the HyperLiquid protocol is its vaults, which allow users to deposit funds and earn profits. HyperLiquid offers two types of vaults: user vaults and protocol vaults, each using different mechanisms for profit generation. These can be managed by individual traders or automated by market makers.

Depositing funds into a user vault allows the trader to automatically copy all trades, sharing profits and losses. Users can also create their own vaults by writing a description and depositing a minimum of 100 USDC.

Meanwhile, the protocol’s Hyperliquidity Provider feature is a community-owned vault with lower-risk strategies. It allows users to deposit funds for market-making and liquidation strategies, participating in both gains and losses.

Closing Thoughts   

Hyperliquid is one of the most competitive DeFi platforms, offering perpetual DEX, spot trading, and profit generation opportunities. The ecosystem also features points distribution and referral programs to reward active users with spot token airdrops and fee discounts.

Disclaimer: Please note that this article is for informational purposes only and does not include any trading recommendations. Be aware that trading involves risks and do your own research before starting with any platform.

The content on The Coinomist is for informational purposes only and should not be interpreted as financial advice. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or reliability of any content. Neither we accept liability for any errors or omissions in the information provided or for any financial losses incurred as a result of relying on this information. Actions based on this content are at your own risk. Always do your own research and consult a professional. See our Terms, Privacy Policy, and Disclaimers for more details.

Articles by this author
N Crypto Conference 2025: Web3 Talks in Kyiv

N Crypto Conference 2025: Web3 Talks in Kyiv

The N Crypto Conference 2025 concluded successfully in Kyiv, attracting nearly 1,000 participants. The event featured 17 speakers, panel discussions on Web3 trends, and even a CS2 esports tournament.

Vlad Vovk
Loopscale Suffers $6M Hack, Negotiates Bounty With Exploiter

Loopscale Suffers $6M Hack, Negotiates Bounty With Exploiter

DeFi platform Loopscale is holding negotiations with a hacker after a $6 million exploit on April 26, 2025.

Anahit Avetisyan
ProShares to Roll Out XRP Futures ETF Lineup

ProShares to Roll Out XRP Futures ETF Lineup

ProShares is expanding its crypto product suite with three XRP futures ETFs, including leveraged and inverse options.

Anton Kryshtal
North Korean Lazarus Group Exploits Online Interviews

North Korean Lazarus Group Exploits Online Interviews

The North Korean Lazarus group leverages fake tech job listings to extract cryptocurrency wallets.

Anton Kryshtal
Crypto Talk on X Today: RTFKT Issues, PolytSwap Launch & More

Crypto Talk on X Today: RTFKT Issues, PolytSwap Launch & More

Recently, images from RTFKT’s CloneX NFT collection stopped showing on platforms. They’re back now, and Head of Tech Samuel Cardillo explained what went wrong.

Anahit Avetisyan
Hot Crypto Talk on X Today: Scott Melker’s Identity Faked, & More

Hot Crypto Talk on X Today: Scott Melker’s Identity Faked, & More

Crypto was hit with a new influencer scam today – Scott Melker, also known as The Wolf of All Streets, revealed that scammers deepfaked his identity and stole $4 million from a victim.

Anahit Avetisyan
From the Federal Reserve to the Front-Runner: Who Is Kevin Warsh, Trump’s Likely Pick?

From the Federal Reserve to the Front-Runner: Who Is Kevin Warsh, Trump’s Likely Pick?

Trump wants Powell out—and Kevin Warsh may be next in line. Could he reshape the Fed under a second Trump presidency?

Elina Moskovchuk
Kaia: What Happens When LINE and Kakao Merge into One Blockchain

Kaia: What Happens When LINE and Kakao Merge into One Blockchain

In just half a year, Kaia has quietly racked up 20 million transactions and drawn in over 400,000 active wallets. Built directly into Asia’s most ubiquitous messaging apps, its reach now extends to nearly 300 million users—a bold blueprint for Web3 adoption.

Vlad Vovk
What Is the Next Bitcoin-Like Investment? Key Factors to Consider

What Is the Next Bitcoin-Like Investment? Key Factors to Consider

Explore the critical factors in evaluating the next breakthrough digital asset. Learn how innovation, decentralization, security, and market trends can help spot a Bitcoin-like opportunity.

The Coinomist
What Is Open Interest in Options? Factors to Consider

What Is Open Interest in Options? Factors to Consider

A comprehensive guide on open interest in options trading, explaining its significance, how it differs from volume, and the key factors to consider when using it for strategy.

The Coinomist
ICO Meaning and Its Role in Blockchain Technology

ICO Meaning and Its Role in Blockchain Technology

ICOs let blockchain projects raise capital by selling tokens. Here’s how they work, their benefits, and the risks investors should be aware of.

The Coinomist
Crypto Whale Activity: What It Means for Your Investment Portfolio

Crypto Whale Activity: What It Means for Your Investment Portfolio

Crypto whales can move markets with a single trade. Learn how their actions affect prices—and how to adjust your investment strategy accordingly.

The Coinomist
What Are Covered Calls? Benefits and Risks

What Are Covered Calls? Benefits and Risks

Covered calls let investors earn income from stocks they already own. Learn how the strategy works, when to use it, and what risks to watch out for.

The Coinomist
Bitcoin Trades Sideways at $92K–$95K: Short Squeeze Unfolds Amid ETF Inflows

Bitcoin Trades Sideways at $92K–$95K: Short Squeeze Unfolds Amid ETF Inflows

Between $92,000 and $95,000, Bitcoin finds stillness. Traders retreat, ETFs awaken, and the market holds its breath—awaiting a spark to reignite the chart.

Anton Kryshtal
Bitcoin Retreats Slightly From $95K as Traders Lock In Gains

Bitcoin Retreats Slightly From $95K as Traders Lock In Gains

Despite a modest price correction, Bitcoin’s market share is expanding, with institutional investors continuing to pour capital into BTC ETFs.

Anton Kryshtal
MORE
Eternal Lines: Why Preserve Books on the Blockchain?

Eternal Lines: Why Preserve Books on the Blockchain?

As information becomes increasingly vulnerable to censorship, people are searching for new ways to preserve it reliably. One such solution is blockchain, which allows for the creation of permanent archives.

Iaroslava Kramarenko
Bitcoin Education Goes Academic: Inside the First Online Master’s Program

Bitcoin Education Goes Academic: Inside the First Online Master’s Program

You’ve heard of HODLing. Now imagine studying it. Spain’s University of the Hespérides is offering the world’s first Master’s in Bitcoin — and it’s more radical than you think.

Elina Moskovchuk
MORE