Current Affairs ETH

Hyperliquid's Playing a Different Game: Why Being the Backend Matters More Than Owning the Users

2026-07-29

Created by Harvard classmates Jeff Yan and pseudonymous developer iliensinc, Hyperliquid launched at the start of 2023. Since then it's been quietly doing something most DEXs haven't figured out: making itself more useful by getting out of the way.

The platform's dual-layer architecture splits execution into HyperCore (the onchain perpetual futures and spot order books) and HyperEVM (Ethereum-compatible smart contracts that went live in February 2025). That split matters. It lets third-party applications—wallets, exchanges, protocols—tap into Hyperliquid's liquidity without fragmenting it. They call this system "builder codes."

Numbers tell the story. Hundreds of developers are now plugged in, including MetaMask and Phantom. Builders have collectively generated $90 million in revenue so far, with Hyperliquid having paid out over $40 million to them. The protocol caps fees at 10 basis points for perpetuals and 100 basis points for spot, then handles settlement automatically. No ambiguity.

MetaMask's integration is the clearest example of how this works in practice. They've launched in-wallet trading on Hyperliquid, letting users open leveraged positions up to 40x across over 150 tokens without ever leaving the wallet. MetaMask charges a flat 0.1% builder fee—disclosed upfront, no hidden spreads. The genius part: MetaMask avoids building and maintaining its own matching engine (a computationally expensive nightmare) while giving its users institutional-grade execution quality. Everyone wins.

But here's where it gets interesting. VALR, Africa's largest crypto exchange by volume, is using Hyperliquid as its entire onchain derivatives layer. They're offering close to 200 perpetual futures markets backed by Hyperliquid's depth, stacked alongside their existing spot and margin trading. This is a centralized exchange using decentralized infrastructure as its backend. The traditional lines between CeFi and DeFi are just... dissolving.

The composability extends beyond wallets and exchanges. CoreWriter, read precompiles, and system contracts allow smart contracts to interact directly with Hyperliquid's order books. That opens doors for lending protocols, liquid staking solutions, even structured products. They can read live market data without putting the underlying trading engine at risk.

Real-world assets are growing too. RWA perpetuals went from a small slice of volume at the start of 2026 to roughly a quarter of it now. Diversification happening at scale.

What Hyperliquid has inverted—and this is the crucial bit—is the entire DEX-user relationship. Most exchanges compete for users. Hyperliquid treats itself as infrastructure. As AWS for blockchains. A shared universal backend where builders avoid duplication and benefit from compounding liquidity. Each new integrator adds depth. More depth attracts the next wave of builders. Network effects compound.

That's radically different from the fragmented liquidity model everyone's been chasing. And as institutional users migrate derivatives onchain, as alternative asset classes find their way to blockchain order books, the exchange that acts as the shared backend—rather than the one that hoards users—probably wins the market.

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