Hyperliquid Review [2024] 

Decentralized perpetual exchanges are becoming increasingly popular but most of them lack the functionality and ease of use that traders are used to from centralized exchanges.

Wouldn’t it be great if there was a DEX with all the cool features of a CEX?

This is exactly what Hyperliquid has set out to do and it is one of the most interesting decentralized exchanges I have seen over this recent bear market.

What I mean by that is, hyper liquid offers the ease of use and expert trading features of a centralized exchange with the trust and transparency of a decentralized exchange.

What is Hyperliquid?

Hyper liquid is a high-performance perpetuals decentralized exchange that is built on its own custom built layer one blockchain.

Although still in the beta phase, it is an extremely promising decentralized (DEX).

Hyperliquid is built from the ground up to bridge the gap between traditional centralized exchanges and perpetual decentralized exchanges.

With their live on-chain market book and advanced trading features, you get the ease of a centralized exchange with the trust of a decentralized exchange.

Hyperliquid aims to bridge the gap between CEXs and DEXs, have they achieved this? Read on to see my opinion on this.

Who Created Hyperliquid?

From my research, my understanding is that the primary contributors are Chameloeon, a group with substantial experience in market-making across centralized exchanges markets, and the Defi sector.

It Looks like their experience in both the centralized and decentralized market-making words has the potential to bridge the gap between DEX’s and CEXs. It looks like, from their experience, the team will be able to fulfill their promise of a fully decentralized perpetual exchange that offers the same ease as a centralized exchange.

From what I can tell, hyperliquid is almost entirely self-funded. Without significant venture capital or token incentives, apart from the ongoing points program.

From my research, it looks like hyperliquid is almost entirely self-funded I couldn’t find any significant venture capital or token incentives apart from the ongoing points programme that is scheduled to end in April 2024.

Top benefits of the Hyperliquid Decentralized perpetuals exchange

The top benefits are as follows.

·       ease of use and functionality of a centralised exchange. New line

·       Competitive trading fees and benefits of those trading fees going into the community insurance fund.

·       It’s unique on chain market book with the potential to be fully decentralised.

·       Currently, until April 2024 hyper some liquidations are offering a points programme to qualify for their upcoming AirDrop.

The top benefits that I see for hyper liquid are that it will provide a really good alternative for those traders and investors that are used to the features from a centralised exchange, features like limit order trading stop loss trading etc but have been jaded by the collapse and freezing of certain centralised exchanges especially in this recent bear market.

What hyper liquid promises to do is to give these features and this ease of use on a completely decentralised platform.

Best Features of Hyperliquid perpetuals exchange

There are a number of features that I think are interesting and have the potential to really set hyperliquid apart. These are:

·       High performance and scalability

·       User friendly trading experience

·       Low-cost onboarding via the Arbitrum bridge

·       Listed over 100 poplar token, at tiem of writing

·       “hyperps” – perpetual contracts for tokens not listed on centralized exchanges

·       Airdrops program – set to continue until April

·       Hyperliquidity pools, currently offering up to 260% APR.

High performance and scalability

HyperLiquid has built its own blockchain from the ground up,  designed specifically for aa perpetual platform, so the most common network operations can be stored in the memory of nodes, alleviating typical bottlenecks.

It was built with high performance in mind, with a capacity for 20,000 transactions per second and a median network latency of 0.2 seconds, perfect for traders who want efficiency.

User friendly trading experience

Unlike most DEX’s that use Automated Market Makers (AMMs), hyperliquid uses their own on-chain order book, which promises to give more precise risk control and better spreads for traders.

Unlike most high-performance perp DEXs that use a mix of on-chain and off-chain systems, hyperliquid achieves high functionality entirely on chain

There has been a clear emphasis by hyperliquid on providing a user friendly trading experience that mimics the functionality of a CEX. You can get one click trading, fast & efficient trades, Integration with trading view and big support for more advanced trading features such like take-profit, stop loss, scale orders, reduce-only orders etc

Another nifty feature is that you can modify orders directly on the platforms chart – one of the most proficient DEXs I have used so far.

Low-cost trading fees and  onboarding via the Arbitrum bridge

Hyperliquid has chosen to integrate with Arbitrum meaning you also get to take advantage of the low onboarding fees via the custom Arbitrum bridge. The bridge requires a 2/3; validator agreement for deposits and withdrawals.

As many of you may know, arbitrum is a growing layer 2 , built on Ethereum that has not only grown a huge amount in the bear market but the Total Value Locked (TVL) is one of the highest across any blockchain with other notable projects like GMX being built on it also.

For those who have not yet used Arbitrum, it is super easy to use.

Listed over 100 popular tokens

At the time of writing, they have just over 100 tokens, I hope that hyperliquid are not done and that they add more pairs over time but currently they have over 100 pairs which is a really decent amount for a new decentralized perpetual exchange.

If you are after the lower market cap coins, they may well not be there but all the usual suspects will be there so should

The platform has “hyperps” – perpetual contracts for tokens not listed on exchanges.

Hyperliquidity pools, currently offering up to 260% APR.

Users can earn points by either providing liquidity (their hyperliquidity (HLP) pool that currently offers up to 260% APR, derived from fees paid by traders.

Hyperliquids points program was launched in Nov 2023 as six month program, scheduled for end to end latency run until April with an airdrop.

This seems to have brought in a lot of new users and like I said earlier, the platform is steadily gaining new users and volume almost daily.

As with all liquidity providing on-chain it comes with those inherent risks.

Hyperliquid has its own pools but you can also create community pools with required minimum capital inputs.

Hyperliquid vaults

This is a unique approach to copy trading where you can mimic other traders

All these features aim to being you the trust and redundancy of a DEX with the enhanced user experience of a CEX.

Hyperliquid Pricing 

The platform offers low fees and community orientated structure whereby I believe there are plans to distribute a portion of the trading fees back to the community. Also a portion of the fees going to the insurance fund.

Hyperliquid offers Low maker and taker fees – hyperliquid aims to mitigate toxic flow by prioritizing efficient trade matching strategies over just volume generation.

Hyperliquid charges a taker fee, with a portion going to referrers and offers a rebate on maker fees

Hyperliquid Pros and Cons 

There are a growing number of high-performance decentralized perpetual exchange Decentralized exchanges, definitely way more than this time last crypto cycle.

It is improtant to understand the advantages and disadvantages of each perpetual DEX so that you can choose the right one for your needs.

Hyperliquid Pros 

·       High performance and scalability

·       On-chain order book – more traditional trading experience like a CEX

·       Advanced trading features of a CEX but with the advantages of a DEX

·       Unique features – hyperliquid vaults (copy trading) and hyperliquid pools (great APR)

·       Competitive and community focused fee structure.

Hyperliquid promises to be one of the top DEXs this crypto cycle, however make sure you understand the potential cons before you decide if it is the right choice for you.

Hyperliquid Cons 

·       Currently operating in beta phase, with a centralised structure, on its journey to full decentralization

·       This centralization poses some risks as per CEXs – especially considering potential of regulatory actions

·       Others DEXs like dydx 4 have made more progress towards decentralization

·       Creating of its own L1 from ground up introduces inherent code and design risks

·       Liquidity, even though growing, is lower than more established derivative exchanges

·       HL’s reliance on price oracles maintained by validators could be a vulnerability, if these oracles are compromised etc

Hyperliquid promises a lot and once they can roll it out iI think it will be great but potential users need to be aware of the potential risks with an early trail blazer.

Conclusion: Should You use Hyperliquid? 

If you are looking to get off centralized exchanges (and I can’t blame you for obvious reasons) then I think you should definitely try out hyperliquid. For me it offers some decent advanced trading tools and the ability to either use their chart for directly inputting my trades or linking to TradingView is really useful.