Altcoin Spotlight: Hyperliquid (HYPE)

There is no better way to start off the new year than by learning about a new cryptocurrency, which is quickly climbing to the top of the charts. Hyperliquid is a blockchain that launched in November 2024 and is already in position #23 on CoinMarketCap.com.

But what is Hyperliquid, and how does it work? Keep reading to learn everything you need to know about this unique project—including whether or not you should consider investing.

What is Hyperliquid?

Hyperliquid is a decentralized trading platform and crypto order book. It is a layer one blockchain, meaning it is built on top of another blockchain (which is Layer 0).

Hyperliquid was created to address the issue of slippage on most DeFi trading platforms. Slippage is what happens when an order is submitted for a certain product at a specified price, but by the time a trade executes, the price is something different. Slippage isn’t as much of an issue on traditional markets, which are less volatile, but it is a huge issue in crypto markets, especially on DeFi platforms which use an automated market maker (AMM) for liquidity. Most cryptocurrency trading platforms you are likely familiar with (Binance, Coinbase, etc.) are centralized and use an AMM for liquidity.

Hyperliquid hopes to make DeFi trading an easier, faster, and more robust experience—by lowering or eliminating slippage. They do this using several methods unique to the platform, which we will go into more detail on later.

What is HYPE?

HYPE is the token associated with the Hyperliquid platform. HYPE is both a utility and a governance token. This means that users of the platform will need to own some HYPE in order to use the Hyperliquid blockchain, but in addition to needing tokens to use the blockchain, the tokens also give the holder a certain number of votes, allowing them to make decisions for the future of the blockchain.

HYPE was distributed to individuals via an airdrop event in November 2024. With most tokens, airdrops are an event that leads to a dump as investors prefer to offload their investment for cash. This was not the case with HYPE, as many investors chose to hold onto their airdropped tokens—something which caused an immediate price spike.

How Does Hyperliquid Work?

Hyperliquid is a uniquely intricate yet simple DeFi trading platform. Hyperliquid is built on the Cosmos blockchain, using both the TenderMint and HyperBFT mechanisms. This allows the order book to be built on-chain while also maintaining transparency for users.

Additionally, Hyperliquid can process an impressive 100,000 transactions per second, and boasts Ethereum virtual machine compatibility.

Currently, Hyperliquid allows the trading of 30 unique tokens, and rather than using oracles to set prices (as most similar exchanges do), Hyperliquid uses network validators to determine token prices, keeping all aspects of trading on platform. This lowers slippage and lessens the chances of short-term price discrepancies affecting trades.

As far as security goes, Hyperliquid has its own unique security protocol called HyperBFT, which is a twist on the common Byzantine Fault Tolerance. For those unfamiliar the BFT ensures that transactions are processed in a secure and decentralized manner.

Hyperliquid uses a proof-of-stake consensus mechanism. It is also regularly audited, though it is unclear whether these are internal or third-party audits.

Who Founded Hyperliquid?

Hyperliquid was founded by HyperLiquid Labs, which was founded by Jeff Yan. Jeff Yan is a graduate of Harvard University and he has supposedly brought several classmates onboard to the project, though most remain unnamed from what we can tell.

Something unique about Hyperliquid is that they chose not to accept outside funding for development. This means all the funds for the coding and creation of the project came from Yan and his team. When he was asked about it, he stated that he didn’t want this to become some sort of money grab by investors—something which he believes has led many other blockchains to fail in the past.

Should You Buy Hyperliquid?

At an initial glance, Hyperliquid seems to be a decent product. It is a DeFi trading platform, which is committed to testing some new ideas for the purpose of being better than the options which are available on the market now. That being said, we have a few concerns.

First and foremost, we don’t like that Jeff Yan does not name the other individuals working on the project—which could indicate that they don’t exist. Especially because Jeff Yan is the only person currently named in conjunction with the project. While screen names are given to other individuals supposedly involved, these screen names could just be Yan.

That brings us to our second concern. When researching this project, it was much more difficult to find the information we typically include in these articles. The Hyperliquid website, while it does have a white paper, has little to no other information. All of the articles that appear about this product read the same and look as if they may have been written by AI.  

Not to mention that this is a new project, and though it has been successful so far, we rarely recommend investing in projects that are this new because they are unproven and inherently risky. It also has no other investors other than Yan himself and his unnamed friends. This means there may be no outside eyes on the project.

Of course, investing is a personal decision, so if you think you might want to use the platform, feel free to purchase some HYPE to make trades. Just ensure that you don’t invest any money you don’t intend to lose, because there is a possibility that this project could be something which will crash in the coming months.

Where You Can Purchase HYPE

If you have decided to go ahead and purchase some HYPE, it can be found on the following platforms:

·      KuCoin

·      Coinbase

·      BitPanda

·      Gate.io

**HYPE may be available in other exchanges, this is just what we found as of January 1, 2025.

Overall, while Hyperliquid might be a good idea and fill a need in the cryptocurrency market, we are still skeptical about the project due to the lack of information available. Invest at your own risk.