Decrypt’s 2025 Project of the Year: Hyperliquid

Core Insights - Hyperliquid represents a significant shift in the crypto trading landscape, particularly in the realm of perpetual futures, which have gained popularity among retail traders [2][3][4] - The platform has generated substantial trading volumes, with over $2.73 trillion in perpetual futures trading volume and $110.65 billion in spot trading volume this year [4] - Hyperliquid operates on its own layer-1 blockchain, enabling gasless transactions and ultra-fast settlement times, which attracts both retail and high-frequency traders [15][16] Company Overview - Hyperliquid was co-founded by Jeff Yan in 2023, emerging as a decentralized exchange (DEX) that has gained traction without venture capital funding [5][6] - The platform has a small team of 11 people, yet it has achieved significant revenue, earning $1.22 billion in annualized revenue [4] - Hyperliquid's user-friendly interface and low barrier to entry cater to casual traders, promoting a "get rich or die trying" mentality [16][17] Industry Impact - Hyperliquid has popularized perpetual futures among crypto-native traders, allowing speculation on assets using derivative contracts that do not expire [3][8] - The platform's leverage offerings range from 3x to 40x, making it more accessible compared to centralized exchanges that require extensive verification processes [10][11] - The rise of perpetual futures has led to a significant increase in trading volume, with a perps-to-spot trading volume ratio peaking at 11.5 in July 2025 [12] Market Dynamics - The competition among exchanges has intensified, with rivals enhancing their leverage offerings and lowering collateral requirements to attract users [29] - Hyperliquid's decentralized nature allows users to trade without the restrictions typically found in traditional finance, appealing to those in emerging markets [21][25] - The platform's transparency in trading, with all transactions viewable on-chain, contrasts with centralized exchanges that may underreport liquidations [31] Regulatory Considerations - Hyperliquid restricts U.S. users from its platform, highlighting the regulatory challenges faced by decentralized exchanges [24] - The platform's approach to lowering barriers for trading tools is seen as a way to drive innovation and market efficiency, particularly for users in restrictive environments [25] Decentralization Debate - Concerns have been raised about the true decentralization of Hyperliquid, particularly in light of decisions made by its governance structure [33][34] - Critics argue that the platform's governance may not be as decentralized as claimed, with significant control held by the Hyperliquid Foundation [36] - Despite these concerns, Hyperliquid is viewed as more decentralized than traditional centralized exchanges, reflecting a trend towards progressive decentralization in the industry [37]