If you have been hearing about Hyperliquid and wondering what all the buzz is about, you are not alone. Hyperliquid is a Layer 1 blockchain purpose-built for trading, designed from the ground up to deliver sub-second execution, deep liquidity, and full self-custody, all while matching the performance traders expect from centralized exchanges. In this guide we break down what Hyperliquid is, how it works under the hood, what makes it different from every other DEX, and why its ecosystem is growing so rapidly.
What Is Hyperliquid?
Hyperliquid is a high-performance Layer 1 blockchain optimized entirely for on-chain trading. Unlike general-purpose chains that bolt a DEX on top of infrastructure designed for many use cases, Hyperliquid was written from scratch with a single mission: run a fully on-chain order book that rivals centralized exchanges in speed and depth.
The platform supports both perpetual futures and spot trading, processes every order, cancellation, trade, and liquidation transparently on-chain, and charges zero gas fees for trading. If you have ever used Binance or Bybit but wished you did not have to trust a centralized entity with your funds, Hyperliquid offers a compelling alternative.
For a primer on how perpetual futures work, see our guide: What Are Perpetual Futures?
How Hyperliquid Works: On-Chain Order Book, Not an AMM
Most decentralized exchanges rely on Automated Market Makers (AMMs), liquidity pools where prices are set by a mathematical formula rather than by real buyers and sellers. AMMs work, but they come with trade-offs: slippage on larger orders, impermanent loss for liquidity providers, and limited order types.
Hyperliquid takes a fundamentally different approach. It runs a fully on-chain order book, the same model used by every major centralized exchange. Limit orders, market orders, stop-losses, and take-profit orders all execute directly on the blockchain. This means price discovery happens transparently, spreads stay tight, and traders have access to the same order types they are used to on centralized platforms.
The HyperBFT Consensus Mechanism
Powering all of this is HyperBFT, a custom consensus algorithm inspired by HotStuff and its successors. HyperBFT delivers sub-second block times with single-block finality, meaning a trade is confirmed the moment it lands in a block, with no waiting for multiple confirmations. The chain currently supports approximately 200,000 orders per second with a median end-to-end latency of roughly 0.2 seconds. For practical purposes, it feels as fast as trading on a centralized exchange.
HyperCore: The Trading Engine
The native trading layer is called HyperCore. It handles perpetual futures order books, spot order books, and all associated operations (margin calculations, funding rates, liquidations) directly at the L1 level. Because HyperCore is not a smart contract sitting on someone else's chain, it avoids the gas wars, congestion spikes, and MEV attacks that plague trading on Ethereum and other general-purpose chains.
Key Features of Hyperliquid
Sub-Second Speed With Zero Gas Fees
Trading on Hyperliquid costs nothing in gas. The chain was designed so that placing and canceling orders does not require users to pay per-transaction fees, removing a major friction point that limits trading activity on other decentralized platforms.
Full Self-Custody
Your funds remain in your own wallet. Unlike centralized exchanges where you deposit assets into the exchange's custody (and trust them not to lose or freeze your money), Hyperliquid lets you retain control of your private keys at all times. You deposit USDC to start trading and can withdraw whenever you want.
Perpetual Futures and Spot Trading
Hyperliquid started with perpetual futures, contracts that let you go long or short on an asset with leverage, without an expiry date. It has since expanded to include spot trading as well. Both markets run on the same on-chain order book infrastructure, so the experience is consistent whether you are trading BTC perpetuals at 50x leverage or buying HYPE on the spot market. To understand how decentralized and centralized exchanges compare, read our breakdown: DEX vs CEX: What Is the Difference?
Deep Liquidity
By combining a familiar order book model with zero fees and fast execution, Hyperliquid has attracted significant liquidity. As of early 2026, the platform commands roughly 60 to 70 percent of the entire decentralized perpetual futures market by volume, a dominant position that translates into tighter spreads and less slippage for traders.
The HYPE Token
HYPE is the native token of the Hyperliquid ecosystem with a fixed total supply of one billion tokens. It serves several functions across the network:
- Gas token on HyperEVM: HYPE is used to pay for gas when interacting with smart contracts on HyperEVM (the EVM-compatible execution environment described below).
- Staking and network security: Holders can stake HYPE to validator nodes to help secure the network and earn staking rewards, currently yielding approximately 2.5 percent annually.
- Governance: HYPE holders participate in protocol governance decisions.
- Ecosystem utility: HYPE is used across various ecosystem functions, including the creation of new perpetual futures markets under HIP-3 (Hyperliquid Improvement Proposal 3), which allows anyone to list a new perps market by staking HYPE.
HYPE is fungible across HyperCore and HyperEVM, meaning you can seamlessly transfer it between the trading layer and the smart contract layer.
What Is HyperEVM?
Launched in February 2025, HyperEVM extends Hyperliquid from a specialized trading chain into a general-purpose financial ecosystem. HyperEVM is a full Ethereum Virtual Machine that runs as part of Hyperliquid's execution layer, inheriting all the security guarantees of HyperBFT consensus.
What this means in practice:
- Smart contract support: Developers can deploy Solidity smart contracts on HyperEVM using familiar Ethereum tools and frameworks.
- ERC-20 compatibility: Standard Ethereum token contracts work out of the box.
- Composability with HyperCore: Smart contracts on HyperEVM can read from and interact with the native order books on HyperCore, opening the door to automated strategies, vaults, and new DeFi primitives that plug directly into Hyperliquid's liquidity.
- Low fees: Because HyperEVM runs on Hyperliquid's high-throughput infrastructure, gas costs are a fraction of what they are on Ethereum mainnet.
HyperEVM is what makes it possible for projects like Based to build enhanced trading frontends and additional services on top of Hyperliquid's core trading engine.
The Hyperliquid Ecosystem
Hyperliquid's ecosystem has grown rapidly as developers and teams build on top of HyperCore and HyperEVM. Here are the major categories:
Trading Frontends
While Hyperliquid has its own native interface, third-party trading frontends offer enhanced features. Based, for example, provides advanced order types, portfolio analytics, a Visa debit card for spending your trading profits, and prediction markets, all connected to the same Hyperliquid liquidity.
Vaults
Vaults on Hyperliquid let users deposit funds into automated or managed trading strategies. Vault managers execute trades on behalf of depositors, and performance is tracked transparently on-chain.
HIP Tokens and Permissionless Markets
Hyperliquid Improvement Proposals (HIPs) define standards for the ecosystem. Two notable ones:
- HIP-1: The standard for deploying native tokens on Hyperliquid's spot market.
- HIP-3: Activated in October 2025, this allows anyone to create a new perpetual futures market by staking HYPE. Before HIP-3, new markets required governance approval; now the process is fully permissionless.
- HIP-4: Introduced in February 2026, enabling native prediction markets and options-style derivatives with fixed price ranges directly on Hyperliquid.
These proposals have accelerated ecosystem growth by making it easy for new tokens and new market types to launch natively on the chain.
Hyperliquid vs Centralized Exchanges
The most common question from traders evaluating Hyperliquid is simple: how does it actually compare to a CEX? Here is a direct comparison:
| Feature | Centralized Exchange | Hyperliquid |
|---|---|---|
| Order book model | Yes | Yes (fully on-chain) |
| Execution speed | Sub-second | Sub-second (~0.2s latency) |
| Trading fees | Maker/taker fees | Zero gas; competitive trading fees |
| Custody | Exchange holds your funds | Self-custody (your keys) |
| KYC required | Yes | No |
| Withdrawal restrictions | Possible | Withdraw anytime |
| Transparency | Opaque | Every trade on-chain |
| Downtime risk | Exchange outages, freezes | Decentralized uptime |
The short version: Hyperliquid matches centralized exchanges on speed and order types, but beats them on transparency, custody, and permissionless access. You do not need to complete KYC to start trading, your funds cannot be frozen by a corporate entity, and every trade is verifiable on-chain.
For a deeper dive into how decentralized exchanges stack up against centralized ones, see DEX vs CEX.
How Based Enhances the Hyperliquid Experience
Hyperliquid provides the infrastructure: a blazing-fast L1 with deep liquidity and self-custody. Based builds on top of that infrastructure to give traders a more complete experience.
Advanced Trading Features
Based offers enhanced order types and trading tools that go beyond what the native Hyperliquid interface provides, including improved charting, position management, and portfolio analytics. Whether you are a casual spot buyer or a serious perpetual futures trader, Based is designed to make your workflow smoother.
Spend Your Profits With a Based Card
One of the biggest pain points in DeFi is turning trading profits into something you can actually spend. Based solves this with a Visa debit card that connects directly to your Hyperliquid account. Cash out your gains and spend them anywhere Visa is accepted, with no manual off-ramping, no bank transfers, no delays. Learn more about the card at based.one/cards.
Prediction Markets
Based also offers prediction markets, letting you trade on real-world outcomes directly within the same interface you use for perpetual futures and spot trading. It is one account, one balance, and multiple ways to express a view on the market.
Step-by-Step Onboarding
New to Hyperliquid? Based walks you through wallet setup, deposits, and your first trade. For a full walkthrough, read our guide: How to Start Trading on Hyperliquid.
Start Trading on Hyperliquid With Based
Hyperliquid has redefined what is possible for on-chain trading: sub-second execution, a real order book, zero gas fees, and full self-custody. Whether you are migrating from a centralized exchange or exploring decentralized trading for the first time, there has never been a better moment to get started.
Based gives you the best way to access Hyperliquid: advanced trading tools, a card to spend your profits, prediction markets, and a seamless onboarding experience, all in one place.
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