Hyperliquid

Hyperliquid is a high-performance Layer 1 blockchain purpose-built for a fully onchain open financial system, combining a native perpetual futures and spot DEX (HyperCore) with a general-purpose EVM-compatible execution layer (HyperEVM). All order books, trades, liquidations, and funding are transparently settled on-chain with one-block finality via the custom HyperBFT consensus, enabling sub-second latency and throughput of ~200,000 orders per second. It serves both traders seeking CEX-grade performance in a fully decentralized environment and developers who want to compose smart contracts directly with deep onchain liquidity.

Yield on Hyperliquid comes from several built-in mechanisms. Here's how each one works.

1. Perpetual funding (trader-to-trader payments)

Every hour, depending on market conditions, either long position holders pay short position holders, or shorts pay longs. This happens because the system compares the perpetual contract price with the actual market (oracle) price. If the contract trades above the real price, longs pay shorts; if below, shorts pay longs. These payments are purely between traders — the protocol takes no cut. The payment rate has a maximum of 4% per hour, and there is a small fixed interest component (about 0.01% per 8 hours) that favors shorts.

2. Trading fees and how they flow

Every trade on Hyperliquid has a fee (taker) or a rebate (maker). The exact rate depends on your trading volume over the past 14 days; spot trading volume counts double. These fees are fully directed to the community — they go to the HLP vault, the assistance fund, and asset deployers. The assistance fund automatically converts collected fees into HYPE tokens and burns them (permanently removes them from supply). Deployers of new spot or perpetual markets may keep up to 50% of the fees their markets generate.

3. Staking rewards (HYPE emissions)

HYPE holders can delegate their tokens to validators, who validate the network. Validators earn block rewards based on how much HYPE is staked with them, and they can charge a commission (capped at small increases of 1%). The reward rate is designed to shrink as more HYPE gets staked — roughly ~2.37% per year if 400 million HYPE is staked. Rewards build up every minute, are paid out daily, and are automatically re-staked (compounded). There's a 1-day lock after delegating, and moving staked tokens back to your wallet takes 7 days.

4. HLP vault (community market-making)

HLP (Hyperliquidity Provider) is a shared vault that acts as a market maker across many strategies — it places bids and offers, performs liquidations, supplies USDC into lending products, and earns a share of trading fees. This opens up strategies that on centralized exchanges are usually reserved for insiders. Anyone can deposit into HLP and share in its profits or losses. Deposits are locked for 4 days after your most recent deposit.

5. Builder / deployer yield

Anyone who deploys a new trading market (perpetual or spot) on Hyperliquid can set a fee share to keep a portion of trading fees generated by that market. On standard perpetual markets, the share can be set between 0% and 300%; in "growth mode" it's 0–100%, but growth mode also cuts protocol fees and volume counting by 90%. Certain quote assets get lower taker fees and better maker rebates.

6. Custom vaults on HyperEVM

Developers can build their own tokenized vaults on Hyperliquid's EVM layer (HyperEVM). These vaults can directly interact with the order books and perform automated trading, lending, and liquidation strategies — all on-chain, without needing outside servers or infrastructure. The accounting is fully customizable (following standards like ERC-4626 if desired).

Hyperliquid Labs (the core contributor team behind Hyperliquid) has not taken any external capital. According to the official documentation: "Hyperliquid Labs is self-funded and has not taken any external capital, which allows the team to focus on building a product they believe in without external pressure." The Hyperliquid Foundation's homepage also prominently states: "No investors. No paid market makers. No fees to any company. Community first." There are no disclosed venture capital rounds, angel investors, or institutional backers. The team — led by Jeff and iliensinc (classmates from Harvard), with members from Caltech and MIT who previously worked at Airtable, Citadel, Hudson River Trading, and Nuro — initially did proprietary market making in crypto in 2020 and expanded into DeFi in summer 2022 using their own resources.