View source for Hyperliquid (HYPE)

CLOB [[Perpetual Contract|perp]] [[Decentralized Exchange (DEX)|DEX]].  A [[Layer One|L1]] focused on createn an open financial system. Every interaction—be it an order, a cancellation or a liquidation is executed [[on-chain]]. Hyperliquid is planning to adopt HyperBFT.

==Basics==
*Based in:
*Started in / Announced on:
*[[Testnet]] release:
*[[Mainnet]] release:
==History==
==Audits & Exploits==
*[[bug bounty|Bug bounty]] program can be found [insert here].
*Has had [https://hyperliquid.gitbook.io/hyperliquid-docs/audits 2 audits] by [[Zellic]] (2-2024).
===Bugs/Exploits===
==Governance==
===Admin Keys===
===DAO===
===Notable Governance Votes===
===Treasury===
==Token==
===Launch===
===Token Allocation===
===Inflation===
===Utility===
====Burns====
===Other Details===
==Coin Distribution==
==Technology==
*[[Whitepaper]] or docs can be found [insert here].
*Code can be viewed [insert here].
*[[Consensus]] mechanism: HyperBFT (own custom consensus algo) which is heavily inspired by [[HotStuff|Hotstuff]] and its successors.
*Algorithm:
*[[Virtual Machine (VM)|Virtual Machine]]: will be [[Ethereum Virtual Machine (EVM)|EVM]] compatible ([https://x.com/defi_monk/status/1816490915738849611 25-7-2024])
*Development language used:
====Transaction Details====
*Capacity ([[TPS]]): ''"The chain currently supports 100k orders / second."'' ([https://hyperliquid.gitbook.io/hyperliquid-docs 7-2024]).
*[[Latency]]: <1 second  ([https://hyperliquid.gitbook.io/hyperliquid-docs 7-2024]).
===How it works===

* From this (potentially biased) [https://x.com/defi_monk/status/1816490915738849611 thread] (25-7-2024):

''"Why do they need an [[Layer One|L1]]? Put simply:'' 

# ''High Frequency Trading (HFT) profits are limited if there are other general purpose transactions occupying demand for [[block]] space and competing for [[gas]]''
# ''The chain must allow for specific order prioritization such as for cancels and post-only limit orders which insure [[market makers]] aren’t subjected to as much toxic flow.'' 
# ''In addition, a tailor-made solution helps optimize for specific functions, like atomic liquidations, funding distributions, and verifying solvency. "''

===Fees===

* From their [https://hyperliquid.gitbook.io/hyperliquid-docs/hyperliquid-improvement-proposals-hips/hip-1-native-token-standard docs] (7-2024):
''"During the alpha phase before the native token exists, the following gas cost is in [[US Dollar Coin (USDC)|USDC]]. Native spot and perps order books share the same volume-based fee schedule for each address. Fees collected in non-USDC HIP-1 native tokens are currently [[Burn Mechanisms|burned]] as there is no mechanism implemented to accrue these to HLP. In the future, token fees could accrue to the respective Hyperliquidity strategy, native token stakers, or otherwise."''
*From this (potentially biased) [https://x.com/defi_monk/status/1816490915738849611 thread] (25-7-2024):

''"Hyperliquid’s trading experience is gasless; [[gas]] is only induced for [[Transaction (Tx)|transactions]] that increase [[state]] bloat i.e. spot listings or transferring to new [[Wallet|wallets]].''

''HL team has not profited off of any of the trading activity on the platform. Their only form of compensation will probably come through vested tokens."''

===Upgrades===
===Staking===
====Validator Stats====
===Scaling===
===Interoperability===

* [[Bridge|Bridging]] to Hyperliquid occurs through [[Arbitrum (ARB)|Arbitrum]], however it is [https://x.com/defi_monk/status/1816490915738849611 not a L3] (30-6-2024). Hyperliquid operates a native [[bridge]], secured by the same [[validator]] set as the Hyperliquid [[Layer One|L1]]. More info from their [https://hyperliquid.gitbook.io/hyperliquid-docs/hyperliquid-l1/bridge docs] (4-2024): 

''"Hyperliquid runs with an [[Ethereum Virtual Machine (EVM)|EVM]] bridge that is secured by the same validator set as the Hyperliquid L1.'' 

''Deposits to the bridge are signed by validators on the L1 and are credited when more than 2/3 of the staking power has signed the deposit.''

''Withdrawals from the L1 are immediately [[Escrow Contract|escrowed]] on the L1, and validators sign the withdrawal as separate L1 transactions. When 2/3 of the staking power has signed the L1 withdrawal, an EVM transaction can be sent to the bridge to request the withdrawal.''

''After a withdrawal is requested, there is a dispute period during which the bridge can be locked for a malicious withdrawal that does not match the L1. [[Cold wallet]] signatures of 2/3 of the stake-weighted validator set are required to unlock the bridge.''

''After the dispute period, finalization transactions are sent, which distribute the [[US Dollar Coin (USDC)|USDC]] to the corresponding destination addresses.''

''There is a similar mechanism to maintain the set of active validators and their corresponding stake on the bridge contract.''

''Withdrawals do not require any Arbitrum [[Ethereum (ETH)|ETH]] from the user. Instead, a withdrawal fee of 1 USDC is paid by the user on the L1 to cover the Arbitrum [[gas]] costs of the validators.''

''The bridge and its logic in relation to the L1 staking have been audited by Zellic."''

===Other Details===

==== Insurance Fund ====

* From the [https://hyperliquid.gitbook.io/hyperliquid-docs/trading/insurance-fund docs] (2-2024):

''"A portion of net fees collected by Hyperliquid are directed towards the Hyperliquid insurance fund. Though "fund" is used to match the nomenclature of other exchanges, the Hyperliquid insurance fund will be governed by the usual decentralized L1 governance procedure.''

''For special circumstances where the platform behaved unexpectedly, the insurance fund may be used to pay affected users.''

''The purpose of what is called the "insurance fund" on other platforms is to take unwanted liquidations. This specific role of the insurance fund is performed by the Liquidator vault, which is the only liquidator on Hyperliquid."''

==Oracle Method==
[https://hyperliquid.gitbook.io/hyperliquid-docs/hyperliquid-l1/oracle Built] their own [[oracle]] ([https://x.com/defi_monk/status/1816490915738849611 25-7-2024]):

''"The [[validators]] are responsible for publishing spot oracle prices for each [[Perpetual Contract|perp]] asset every 3 seconds. The oracle prices are used to compute funding rates. They are also a component in the <code>mark price</code> which is used for margining, liquidations, and triggering TP/SL orders.''

''The spot oracle prices are computed by each validator as the weighted median of [[Binance]], [[OKX (OKB & OKT)|OKX]], [[Bybit]], [[Kraken]], [[KuCoin (KCS)|Kucoin]], Gate IO, [[MEXC Global|MEXC]] spot prices for each asset, with weights 3, 2, 2, 1, 1, 1, 1 respectively.''

''The final oracle price used by the clearinghouse is the weighted median of each validator's submitted oracle prices, where the validators are weighted by their stake."''

==Their Other Projects==
==Roadmap==
*Can be found [https://hyperliquid.gitbook.io/hyperliquid-docs/roadmap here] (11-2023) but is bare minimum.
==Revenue==
==Usage==

* From this (potentially biased) [https://x.com/defi_monk/status/1816490915738849611 thread] (25-7-2024):

''"It's still far and away behind [[Binance]] in volume, making up roughly 6% of the [[Centralized Exchanges (CEX)|CEX's]] trading volumes in June."''

===Projects that use or built on it===
==Competition==

* From this (potentially biased) [https://x.com/defi_monk/status/1816490915738849611 thread] (25-7-2024):

''"[[DYdX (DYDX)|dYdX]]: Key differentiation between Hyperliquid and dYdX is that Hyperliquid has built its order book fully [[On Chain|onchain]]. It's fully transparent (no [[Frontrunners|front-running]] or PFOF). Having an offchain order book / matching engine saves on additional validation, but doesn't provide a meaningful long-term alternative to [[Centralized Exchanges (CEX)|CEXs]]. Hyperliquid is also further ahead on its ecosystem, showing signs it wants to be a full-fledged network that can offer more than just a [[Perpetual Contract|perp]] DEX.'' 

''Performant [[Layer One|L1s]] and [[Parallelization|Parallelized]] EVMs: You can also make the comp to performant L1s like [[Solana (SOL)|Solana]] and to parallelized EVMs like [[Monad]] or [[Sei (SEI)|Sei]]. Against $SOL, the [[Ethereum Virtual Machine (EVM)|EVM]] is an interesting distinction and against parallelized EVMs like Sei and Monad, Hyperliquid already has a killer app (perp DEX) and stickier users.'' 

''The biggest moat Hyperliquid has however, against all other comps, is the network’s composability with a leading onchain order book. Hyperliquid is not a blank slate general purpose L1. It's optimized for HFT on an onchain order book. Perhaps Hyperliquid is much more akin to a fully onchain [[Binance]]."''

==Pros and Cons==
===Pros===
===Cons===
==Team, Funding and Partners==
===Team===
*Full team can be found [here].
*[https://x.com/chameleon_jeff Chameleon Jeff]
*''"Less than 10 people"'' ([https://x.com/defi_monk/status/1816490915738849611 25-7-2024])
*From their docs (4-2024):
''"Hyperliquid Labs is a core contributor supporting the growth of Hyperliquid, led by Jeff and iliensinc, who are classmates from [[Harvard]]. Other members of the team are from [[Caltech]] and [[MIT]] and previously worked at Airtable, Citadel, Hudson River Trading, and Nuro."''

===Funding===

* From this (potentially biased) [https://x.com/defi_monk/status/1816490915738849611 thread] (25-7-2024):

''"Hyperliquid [https://hyperliquid.gitbook.io/hyperliquid-docs/about-hyperliquid/core-contributors hasn't] taken funding from private investors,"''

===Partners===
==(:==
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