Hyperliquid

Hyperliquid is a layer-1 blockchain purpose-built for a fully onchain open financial system, combining a high-performance decentralized exchange (perpetual futures and spot with an onchain order book) with an EVM-compatible smart contract layer (HyperEVM). It offers zero gas fees, sub-second block times (~0.07s), and up to 40x leverage on perpetuals, with every trade, liquidation, and funding payment executing transparently on its custom HyperBFT consensus. The platform is designed for traders seeking capital efficiency and builders who want to compose financial applications on top of native onchain liquidity.

Hyperliquid generates yield for its users through four main mechanisms built into the protocol's design.

1. Trading fees and maker rebates — When users trade perpetuals or spot on Hyperliquid, fees are charged based on their trading volume over the previous 14 days (spot volume counts double toward fee tiers). "Takers" (traders who take orders off the book) pay a fee that goes down as their volume increases. "Makers" (traders who place orders that wait to be filled) can earn rebates — meaning the exchange pays them — if their maker volume over 14 days passes certain thresholds. Perpetuals and spot have separate fee schedules. For spot pairs between two "quote assets" (like stablecoins), fees are 80% lower. No company collects these fees. Instead, all fees go to the community through three channels: the Hyperliquidity Provider (HLP) vault, the assistance fund (which converts fees to HYPE tokens and burns them — removing them permanently from circulation), and spot deployers (who may keep up to 50% of fees from the tokens they list). Also, staking HYPE gives you a 5–40% discount on trading fees, depending on how much you have staked.

2. Funding rates on perpetuals — These are purely person-to-person payments between traders who hold long positions (betting prices will rise) and those holding short positions (betting prices will fall). The payment is calculated each hour. The rate is based on how far the perpetual contract price has drifted from the real-world spot price of the underlying asset, plus a small interest adjustment. The protocol does not take any cut of funding payments — it is a direct transfer between traders, designed to keep contract prices close to the actual market price.

3. HLP (Hyperliquidity Provider) — This is a protocol-managed pool that runs market-making strategies across Hyperliquid's order books, performs liquidations (closing risky positions), supplies USDC into the Earn product, and collects a portion of trading fees. Anyone in the community can deposit USDC into HLP and share in its profits and losses. Deposits have a 4-day lockup period before you can withdraw. HLP opens up market-making strategies that are usually only available to big players on centralized exchanges.

4. HYPE staking — HYPE holders can stake (lock up) their tokens with validators in a delegated-proof-of-stake system. Staking rewards come from a future emissions reserve. The reward rate is inspired by Ethereum's model — it goes down as the square root of total HYPE staked goes up (so more stakers means lower rewards per person). Rewards are earned every minute, distributed and auto-compounded daily (re-staked to the same validator). Validators can charge a commission on your rewards, but they can only increase it by up to 1% per change to prevent abuse. There is a 7-day waiting period to unstake. Hyperliquid also ran a points program from November 2023 to November 2024 that rewarded users with weekly distributions based on activity, but that program has ended and no points program is currently active.

Hyperliquid is self-funded and has not taken any external capital. The project's website states "No investors. No paid market makers. No fees to any company." The official docs confirm: "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 core contributors (Jeff and iliensinc, classmates from Harvard, with team members from Caltech and MIT) previously engaged in proprietary market making in crypto and used their own resources to build the platform. There are no known venture capital rounds, angel investors, or institutional backers.