Hyperliquid and the Year of Explosive Growth in Perpetual Contracts

Author: David Christopher Source: Bankless Translation: Shanyuopa, Jinse Caijing

Looking back on the growth trajectory of the cryptocurrency market in 2025, Hyperliquid has always been an unavoidable core topic.

This exchange drew much attention on the crypto Twitter platform in 2024 with its epic airdrop at the end of the year and impressive price performance, prompting users to reevaluate this product. By the end of 2025, it had completed a stunning transformation — ranking fourth in revenue in the crypto industry with annual revenue exceeding $650 million, and its perpetual contract trading volume once accounted for up to 70%, making it a truly phenomenally successful platform.

Data source: Token Terminal

If you haven’t closely followed Hyperliquid’s developments before, you might think its explosive success was sudden. But in reality, the rise of this public chain is the result of carefully refined product design, unique growth strategies, and well-deserved external recognition working together.

The following will review Hyperliquid’s rise in 2025 and analyze why 2026 will be the real test for it.

Q1 2025: The First-Mover Advantage of Crypto Native Genes

Hyperliquid’s rapid growth year began with its precise grasp of market dynamics.

In January, when TRUMP launched, Hyperliquid almost simultaneously introduced perpetual contracts for that token, ahead of other exchanges, establishing itself as the “platform for early trading of new tokens.” Indeed, Hyperliquid’s quick response to the market benefits from fewer constraints imposed by large exchanges’ corporate systems that claim to “protect users.” But more critically, its team is deeply rooted in the on-chain ecosystem, achieving “timely information and foresight” — leveraging sharp on-chain insights to seize opportunities and understanding the competitive advantage of launching these tokens early. This move firmly established Hyperliquid’s reputation: before traditional leading exchanges responded, this was the first choice for trading new assets.

In February, HyperEVM officially launched. Built on Hyperliquid’s core trading engine (HyperCore), it is a general-purpose smart contract layer that did not rely on any top-down incentive plan at its inception. This means that when it entered full operation in the second quarter, its core user base was not there for rewards but genuinely aligned with the chain’s vision, eager to participate in the ecosystem through its unique features like HyperCore integration, rather than merely chasing incentives.

Q2 2025: Breaking Out Strongly

Hyperliquid’s growth far exceeded market expectations. Besides its platform token HYPE soaring nearly fourfold from April lows, by May, on-chain perpetual contract trading volume had already reached 70% — for a platform without risk investment backing or token incentives, this is astonishing.

As the crypto market rebounded strongly, Hyperliquid captured a large share of order flow thanks to smooth user experience and ample liquidity, with total platform trading volume climbing to $1.5 trillion. Meanwhile, HyperEVM also entered a fast growth lane: as various projects launched, users explored new profit opportunities via protocols like Kinetiq, Felix, Liminal, etc. Its total value locked (TVL) surged from $350 million in April to $1.8 billion in mid-June, with the HYPE token’s deflationary burn mechanism also in continuous operation.

During this explosive growth phase, Hyperliquid remained highly popular: it appeared on national TV, was analyzed in a Bloomberg feature, and became a key topic in CFTC policy discussions. This exchange has truly become an industry force that cannot be ignored.

Q3 2025: Peak Moment and Initial Market Fragmentation

At the start of the third quarter, a landmark event marked that Hyperliquid’s infrastructure had become a necessary external component of the ecosystem.

Phantom Wallet bypassed many Solana-based perpetual contract platforms and chose to integrate via Hyperliquid’s developer code tools — the core mechanism allowing external platforms to route orders to HyperCore and earn trading fees.

Following Phantom Wallet, mainstream wallets like Rabby, MetaMask also completed integration, and numerous mobile trading apps based on this developer code tool officially launched. According to statistics, through these collaborations, “partners” earned nearly $50 million in fees, with trading volume reaching $158 billion.

Data source: Hyperscreener

In September of the same year, a bidding war erupted over the issuance rights of the native stablecoin USDH. This contest also revealed Hyperliquid’s industry standing and brand value.

The cause was quite clear: Hyperliquid’s cross-chain bridge holds about 8% of Circle’s USDC supply, meaning the platform must pay nearly $100 million annually to its direct competitor Coinbase, but this revenue cannot flow back into its own ecosystem. Clearly, issuing a native stablecoin would solve this pain point, potentially recapturing up to $200 million in annual revenue for Hyperliquid.

Hyperliquid subsequently issued a tender notice, inviting proposals for USDH issuance. Many industry giants joined the contest.

Ethena offered a $75 million ecosystem development commitment and promised to bring abundant institutional cooperation resources; Paxos used its PayPal and Venmo integration rights as bargaining chips, even persuading PayPal to tweet favorably about Hyperliquid. In the end, Native Markets stood out. The core team is highly capable, including esteemed HYPE ecosystem contributor Max Fiege, former Uniswap Labs COO MC Lader, and Paradigm researcher Anish Agnihotri. Why could this smaller, less-funded team beat industry giants? The answer lies in its philosophy — highly aligned with Hyperliquid:坚持自力更生，与生态目标高度契合，致力于打造真正有机生长的生态系统 —— just like Hyperliquid’s own development path.

The impact of the USDH issuance rights battle has long exceeded Hyperliquid’s ecosystem boundaries. Soon after, MegaETH announced plans for a native stablecoin; in November, the Sui public chain followed suit with a similar scheme.

But at the same time, the birth of USDH also marked the moment when HYPE’s price peaked at a record high in mid-September — competitive pressures in the market began to surface. Binance founder Zhao Changpeng’s supported exchange Aster, based on the Binance ecosystem, and Ethereum Layer 2 perpetual contract platform Lighter, all entered strongly with massive airdrop campaigns. Market trading volume started to fragment, and Hyperliquid’s market share declined accordingly. As of this writing, its perpetual contract trading volume share has fallen to 17.1%.

Data source: @uwusanauwu | Dune Analytics

Q4 2025: Ecosystem Maturity and Growth Pains

In October, the highly anticipated Hyperliquid Proposal 3 (HIP-3) officially took effect. This proposal allows developers to launch trading markets on HyperCore without permission, promoting exchange growth and accelerating decentralization.

Any user staking 500,000 HYPE tokens can independently launch customized trading markets, such as:

• Stock perpetual contracts based on Unit Trade.xyz and Felix protocols
• Perpetual contract markets settled with interest-bearing collateral (sUSDE) based on Ethena protocol
• Synthetic asset trading markets tracking private companies like SpaceX and AI firm Anthropic, based on Ventuals protocol

However, despite HIP-3’s smooth implementation, HYPE’s price still fell nearly 50% from its September peak. The reasons include the overall market weakness and competition, but two major events were especially pivotal.

First, Hyperliquid experienced its first auto-deleveraging (ADL) event in over two years. During the market plunge on October 10, high-leverage positions’ margin depletion far exceeded the capacity of the liquidation engine and Hyperliquid’s liquidity pool (HLP). The protocol triggered over 40 auto-deleveraging mechanisms within 12 minutes, forcibly reducing some profitable positions to rebalance trading books. While some argue that affected traders ultimately closed “profitable” positions, others question whether the actual liquidation scale exceeded what was needed to cover bad debt. Admittedly, the system maintained solvency and did not require external funds, but like the market, Hyperliquid may need time to recover from this event.

Second, the team’s tokens began unlocking in November. Although the actual unlock volume was below market expectations, the selling pressure caused by token unlocks remains a key factor in HYPE’s poor performance. Currently, the unlocking scale is relatively limited — only 23% of unlocked tokens have flowed into OTC markets, and 40% are re-staked — but future unlock schedules remain uncertain. In the author’s view, the core team might still be weighing options, trying to craft a plan that protects contributors’ interests while maintaining ecosystem health. But for a platform that stands on transparency and “honesty,” such uncertainty undoubtedly triggers market concern.

The Trial Ground of Perpetual Contracts

Although current market conditions and trading activity have declined, when analyzing the reasons for HYPE’s weakness, we must not overlook an important background: as Hyperliquid rose, the competition landscape in the perpetual contract sector was also undergoing dramatic changes.

Lighter and Aster are just microcosms of on-chain competitors. Although their trading volumes may have some “airdrop mining” inflation, they do offer users practical alternatives. Off-chain, following Coinbase, Robinhood is also about to enter the perpetual contract space. As perpetual contracts continue to mainstream, more competitors will emerge in the future.

In other words, Hyperliquid is now in the “trial ground” of the industry, and in 2026, this test will continue to intensify. The core issue is not whether its performance in 2025 was outstanding — the answer is clearly yes. The real question is whether, as more industry players join and competition heats up, Hyperliquid’s development model — relying on developer code integrations and decentralized initiatives like HIP-3 for growth — can still maintain its leading edge.

Hyperliquid’s success lies in steadily refining better products and building a more complete ecosystem, refusing to rely on shortcuts. Whether it can continue to lead the industry depends crucially on whether it can uphold this original intention to the end.