What is Hyperliquid and how does it work?

Hyperliquid is a blockchain built mainly for trading. The Hyperliquid exchange that runs on it is best known for perpetual futures, or perps, a type of derivative that lets traders bet on a crypto price with borrowed money. Its native token is HYPE.

What is Hyperliquid crypto?

Hyperliquid describes itself as a high-performance layer-1 blockchain meant to host a fully on-chain financial system. It has two main parts:

• HyperCore, which runs order books for perpetual futures and spot trading directly on the chain. Every order, cancellation, trade and liquidation is recorded on-chain and is final within one block. The docs say it currently handles 200,000 orders per second.
• HyperEVM, a smart contract layer similar to Ethereum's, where developers can build apps that tap HyperCore's markets.

The chain uses its own consensus method, HyperBFT, which its docs say is inspired by an algorithm called HotStuff.

Hyperliquid matches trades through an order book, where buyers and sellers post the prices they want, rather than through liquidity pools of tokens. Our guide to DEXs covers the wider category.

How do Hyperliquid perps work?

A perpetual future tracks the price of an asset but never expires. On Hyperliquid, traders post USDC as collateral, called margin. They choose a leverage level, and the maximum allowed varies by asset.

To keep a perp's price near the real market price, traders pay each other a funding fee every hour. When the perp trades above the index price, traders betting on a rise, called longs, pay those betting on a fall, called shorts. When it trades below, shorts pay longs. Hyperliquid does not take a cut of funding.

What are the risks of trading perpetual futures?

Leverage magnifies both gains and losses. If a position falls below the required maintenance margin, it is liquidated, meaning closed automatically. Hyperliquid first tries to close it on the order book, and the trader keeps any collateral left over. If that fails, a backstop vault takes over the position, and the trader does not get the maintenance margin back. In cross-margin mode, all positions sharing that margin can be taken, which can wipe out the account.

Platform risk matters too. In March 2025, a trader manipulated a small token called JELLYJELLY and pushed a large losing position onto Hyperliquid's community vault, HLP. The network's validators voted to delist the market, and the Hyper Foundation said it would make affected users whole. Our guide to futures and leverage explains the basics.

What is the HYPE token used for?

HYPE launched on November 29, 2024. Its total supply is capped at 1 billion, and 31% went to users in an airdrop. HYPE can be staked to secure HyperBFT, and it is the gas token on HyperEVM.

Leveraged trading can lose more than you expect, very quickly, and crypto tokens can lose most of their value.