Overview
Hyperliquid is a decentralized exchange that focuses on order book perpetual futures. It provides functionalities similar to centralized exchanges while operating on-chain. The exchange is powered by Hyperliquid L1, a blockchain specifically created for this purpose, utilizing Tendermint for consensus mechanisms. This blockchain efficiently handles all exchange operations such as orders, cancellations, trades and liquidations on-chain, achieving block latency of less than one second. It is capable of processing up to 20,000 orders per second.
Hyperliquid aims to facilitate cryptocurrency trading for all users by ensuring transparency, lowering costs and providing effective execution. The organization is dedicated to ensuring open access to trading markets and the principle of self-custody. The overarching goal is to be recognised as a reliable platform for futures trading.
Since its launch the protocol has amassed over $160 million in Total value locked:
Hyperliquid’s Layer 1
Hyperliquid L1 is designed specifically for operating a derivatives exchange and does not intend to support general-purpose smart contracts. This specialisation enables optimisations to enhance performance and throughput, aiming to match the efficiency typically associated with centralised exchanges. It incorporates all necessary margin and matching engine states on-chain, avoiding the use of off-chain order books and emphasizing a commitment to full decentralization and transaction order consistency through Byzantine Fault Tolerant (BFT) consensus.
Latency on Hyperliquid is managed through a customized version of Tendermint, focusing on reducing end-to-end latency, which measures the time from sending a request to receiving a confirmed response. For users in optimal locations, the median latency is reported at 0.2 seconds, with a 99th percentile of 0.9 seconds, supporting efficient transaction processing.
The platform can handle 20,000 transactions per second due to transaction representation optimizations and batching. This capacity is expected to satisfy initial demand from retail users and market makers, with plans for ongoing research to further improve transaction processing speeds.
Hyperliquid's infrastructure is built from the ground up without relying on existing frameworks like the Cosmos SDK. Its state transition logic is written in Rust and connects with Tendermint through an ABCI server. The security model is based on proof of stake, with staking and slashing mechanisms that will be detailed with the release of its native token.
Points system to qualify for future airdrop
The Hyperliquid points program commenced on November 1st. Over a period of six months, a total of 1,000,000 points will be allocated weekly to its users, which leaves participants with ~3 months left to farm points. These points are designed to incentivize users who actively contribute to the platform's growth.
Additionally, an affiliate program will match points, allowing affiliates to gain one point for every four points earned by the users they refer. The criteria for earning points will be reviewed and updated regularly. Point allocations are calculated based on user activity up to Wednesday each week at 00:00 UTC, with distributions occurring on Thursdays. Hyperliquid maintains the authority to adjust previous distributions of points at its discretion.
USDC Deposits
The chart below details the number of depositors for each respective USDC range. This can be a good way to gauge how many people are farming the platform of points and allows individuals to get a greater understanding of how competitive the airdrop will be:
Disclaimer: This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.