Hyperliquid’s market share plummeted from 80% to 20%, is this due to a strategic shift or competitive failure? This article will deeply analyze its transformation from B2C to “Liquidity AWS,” and how HIP-3 and Builder Codes become key to breaking the ecosystem. The article is based on an original piece by esprit.hl, organized, compiled, and written by Foresight News.
(Previous summary: From on-chain pricing to unlisted giants: Hyperliquid opens a new battlefield for Pre-IPO contracts)
(Additional background: Hyperliquid faces a “suicide attack” with vaults evaporating $5 million, is a bigger disaster quietly approaching?)

Table of Contents

• Phase One: Full Lead Period (Early 2023 – Mid 2025)
• Phase Two: Growth Stagnation Period: “Liquidity AWS” Strategy and Intensified Competition
  • 1. Strategic focus shifts from B2C to B2B
  • 2. Competitors seize market opportunities
  • 3. Lack of incentives and liquidity migration
• Phase Three: Rise of HIP-3 and Builder Codes

In recent weeks, industry concerns about Hyperliquid’s future development have grown. Market share loss, rapid rise of competitors, increasingly crowded derivatives track—these phenomena raise a core question: what is really happening beneath the surface? Is Hyperliquid already peaked, or are current market interpretations overlooking deeper structural signals?

This article will dissect these layers for you.

Phase One: Full Lead Period (Early 2023 – Mid 2025)

During this period, Hyperliquid’s key indicators repeatedly hit new highs, market share continued to grow, mainly due to the following structural advantages:

• Points incentive system: effectively attracted market liquidity.
• First-mover advantage with new contracts: for example, being the first to launch on contracts like TRUMP, BERA, making it the most liquid platform for new trading pairs, and the preferred choice for pre-market trading (such as PUMP, WLFI, XPL). Traders, to grasp emerging trends, had no choice but to use Hyperliquid, pushing its competitive edge to the peak.
• User experience: top-tier operation interface and user experience in perpetual contract DEXs.
• Lower transaction fees: more cost-effective than centralized exchanges.
• Launch of spot trading: opened new usage scenarios.
• Ecosystem building tools: including Builder Codes, HIP-2 proposals, and HyperEVM integration.
• High stability: even during major market fluctuations, service remained uninterrupted.

Based on these advantages, Hyperliquid’s market share grew continuously for over a year, reaching a peak of 80% in May 2025.

( According to @artemis data on perpetual contract trading volume market share )

At that time, Hyperliquid’s team led in innovation and execution, with no truly comparable products in the entire ecosystem.

Phase Two: Growth Stagnation Period: “Liquidity AWS” Strategy and Intensified Competition

Since May 2025, Hyperliquid’s market share sharply declined, by early December, its trading volume share had fallen from about 80% to nearly 20%.

( According to @artemis data on @HyperliquidX market share )

This relative loss of growth momentum is mainly attributed to:

1. Strategic focus shifts from B2C to B2B

Hyperliquid did not continue to deepen the pure B2C model (such as launching its own mobile app or continuously releasing new perpetual contract products), but shifted to a B2B strategy, aiming to become “Liquidity AWS” ( Amazon Web Services ).

The core of this strategy is to build infrastructure for external developers, such as Builder Codes for frontend use and HIP-3 for launching new perpetual contract markets. However, this shift means some product deployment rights are handed over to third parties.

In the short term, this strategy is not optimal for attracting and retaining liquidity. The infrastructure is still in early stages, market adoption takes time, and external developers currently lack the long-term user reach and trust that the Hyperliquid core team has accumulated.

2. Competitors seize market opportunities

Unlike Hyperliquid’s new strategy, competitors maintain fully integrated vertical models, allowing much faster product launches.

With control over the entire execution process, these platforms can rapidly expand while maintaining full control over product releases and leveraging established user trust. This makes them far more competitive at this stage than in the first phase.

This directly translates into market share gains. Today, competitors not only offer a full suite of products on Hyperliquid but also introduce features not yet available there, such as spot markets, perpetual stocks, and forex trading already launched by Lighter.

3. Lack of incentives and liquidity migration

Hyperliquid has not launched any official incentive activities for over a year, whereas its main competitors have. For example, Lighter, which recently leads the trading volume market share (about 25%), is still in the “points incentive season” before token issuance.

( According to @artemis data on @Lighter_xyz market share )

In DeFi, liquidity is inherently profit-driven. A significant portion of trading volume flowing from Hyperliquid to Lighter ( and other platforms ) is likely motivated by incentives and potential airdrops. Similar to most perpetual contract DEXs running point incentives, Lighter’s market share is expected to decline after its token launch.

Phase Three: Rise of HIP-3 and Builder Codes

As mentioned above, building “Liquidity AWS” is not an optimal short-term strategy. But in the long run, this strategic positioning is what could make Hyperliquid a core hub of global finance.

Although competitors have copied most of Hyperliquid’s current features, the true source of innovation still resides within Hyperliquid.

Developers building on Hyperliquid can focus on specific areas, and on top of continuously evolving infrastructure, formulate more targeted product development strategies.

In contrast, fully vertically integrated protocols (like Lighter) face more limitations when trying to optimize multiple product lines simultaneously.

HIP-3, though still in early stages, is already showing long-term influence. Major participants like @tradexyz have launched perpetual stocks, @hyenatrade recently deployed a terminal for trading USDe. More experimental markets are emerging, such as @ventuals providing pre-IPO asset exposure, and niche speculative markets like @trovemarkets focusing on Pokémon or CS:GO assets.

By 2026, HIP-3 markets are expected to account for a significant share of Hyperliquid’s total trading volume.

( Created by builders, HIP-3 market trading volume )

The ultimate key to Hyperliquid regaining dominance lies in the synergy between HIP-3 and Builder Codes.

Any front-end integrated with Hyperliquid can immediately access all HIP-3 markets, providing users with unique products. Builders are thus highly motivated to create new markets via HIP-3, as these markets can be easily accessed through any compatible front-end (like Phantom, MetaMask, etc.), reaching entirely new liquidity sources—creating a perfect growth flywheel.

The ongoing development of Builder Codes makes me increasingly optimistic about its potential for revenue generation and user growth.

( According to @hydromancerxyz data, Builder Codes revenue )

( According to @hydromancerxyz data, Builder Codes daily active users )

Currently, the main users of Builder Codes are still native crypto applications like Phantom, MetaMask, BasedApp. But I expect that in the future, a new type of “super app” built on Hyperliquid will emerge, aiming to attract entirely non-crypto-native user groups.

This is very likely the path for Hyperliquid to enter the next phase of scale expansion.

!Official website tg banner-1116 | DoinQ Trends - The Most Influential Blockchain News Media