Hyperliquid

• Hyperliquid is a Layer 1 blockchain built specifically to run a perpetual futures exchange with a fully on-chain order book.

• Unlike most decentralised exchanges it uses an order book rather than an automated market maker, with matching handled by the chain itself.

• HYPE is the gas and staking token of the network.

• A large share of supply was distributed to users through an airdrop, with no venture allocation sold publicly.

• The protocol uses trading fee revenue to buy HYPE on the open market.

• Remaining supply unlocks to contributors over a multi-year schedule.

Pros:

• Order book performance approaching centralised exchanges while settling on-chain.

• Fee revenue is substantial and used for buybacks rather than accruing to a company.

• Distribution was unusually community-weighted for a project of its size.

Cons:

• The validator set is small, so the network is considerably more centralised than its throughput claims suggest.

• In March 2025 the protocol intervened to close a position in the JELLY market after a trader exploited its liquidity vault, a decision that worked financially but undercut the neutrality argument.

• Contributor unlocks represent a large future supply overhang.

• Exposure to the leading on-chain perpetuals venue by volume.

• Revenue is real, measurable and directed at the token.

• Set against validator centralisation and the precedent of discretionary intervention.

• A fully on-chain central limit order book with latency competitive with centralised venues, which no other chain has matched at this volume.

• Perpetual futures trading requires order book speed that general-purpose chains cannot provide.

• Building the chain around the exchange removes the compromise.

• Founded by Jeff Yan and Iliensinc, with a background in high-frequency trading.

• The team has not raised outside venture capital for the token.

• No ICO or public sale. Supply entered circulation through an airdrop to users in November 2024.

• Validator concentration means the network is not meaningfully decentralised today.

• The JELLY intervention established that the protocol will act discretionarily under stress.

• Large scheduled unlocks to contributors.

• Perpetuals volume is cyclical and falls sharply in quiet markets.

Hyperliquid has no conventional whitepaper; its design is set out in technical documentation. The argument is that decentralised perpetuals have relied on automated market makers not because they suit derivatives but because general-purpose chains cannot support an order book — matching requires latency and throughput that block times do not allow. Hyperliquid's response is to make the exchange the chain's purpose rather than an application on it, running matching in consensus so orders and cancellations settle at block speed. The documentation is candid that this trades decentralisation for performance, with a small validator set as the direct cost.