The Growing Fascination with Hyperliquid: Is This the Dawn of a New Age in On-Chain Trading?

By 2025, Hyperliquid has established itself as a major player in decentralized derivatives trading, propelled by rising institutional engagement, protocol enhancements, and increased on-chain activity. Amidst market turbulence and shifting regulatory frameworks, Hyperliquid’s forward-thinking strategies—such as the HIP-3 initiative and collaborations with organizations like and 21Shares—have positioned it as a leader in the evolving landscape of on-chain trading.

Market Trends: Trading Volume, Competition, and Risk Factors

In October 2025, Hyperliquid achieved a milestone with $303 billion in trading volume, surpassing competitors such as Lighter ($272 billion) and

($262 billion), as reported by . Its dominance was further highlighted by open interest (OI) figures that exceeded the total OI of all other perpetual DEXs combined. Despite this, competition remains intense: Aster briefly overtook Hyperliquid with a 24-hour volume of $11.94 billion in mid-November, according to a , emphasizing the critical role of liquidity and incentive schemes in drawing traders.

A notable market event occurred in November when a

whale known as 0x7b7 placed a $7 million short position on Hyperliquid, according to a . The trade initially targeted 2,222 BTC but was reduced to 300 BTC after several liquidations, demonstrating the hazards of leveraged trading and the significant impact of large traders on market prices. This incident highlights the necessity for advanced risk management solutions, a need Hyperliquid is addressing with its BorrowLendingProtocol (BLP) testnet, which allows users to borrow and lend assets like USDC and PURR on-chain, as noted in a .

On-Chain Growth: HIP-3 and the Move Toward Permissionless Markets

The most significant change for Hyperliquid in 2025 is the rollout of HIP-3, which shifts the platform from centralized oversight to a permissionless system for creating markets. With HIP-3, anyone can launch perpetual markets by staking HYPE tokens and setting parameters such as collateral, leverage, and oracle selection. To maintain security, poorly configured markets are subject to slashing, while RedStone’s HyperStone oracle delivers rapid price updates—processing over 103 million data points during testnet phases, according to a

.

This evolution not only opens up market creation to a wider audience but also makes Hyperliquid more attractive to developers and institutions. By minimizing dependence on centralized permissions, HIP-3 supports the broader DeFi movement toward modularity and user empowerment. The integration of HyperStone further strengthens the platform’s technical backbone, potentially boosting demand for RedStone’s

token as the need for reliable price data increases, as highlighted in a .

Institutional Momentum and Regulatory Developments

Interest from institutions is on the rise, illustrated by 21Shares’ application on October 29 for a Hyperliquid ETF, to be managed by

Custody and BitGo Trust, as reported by . This step reflects increasing trust in Hyperliquid’s economic model and governance, especially as the HYPE token’s role expands through staking and revenue-sharing. The platform’s total value locked (TVL) also climbed 10.9% in Q3 2025, with vault APYs reaching 160%, drawing in yield-focused investors during a period of low interest rates, according to a .

Yet, obstacles remain. Weekly trading fees saw a steep decline in October, falling from $34.86 million to $11.84 million, indicating increased caution among traders during uncertain times, as noted in a

. This volatility highlights the challenge for Hyperliquid to innovate while maintaining stability, especially as it ventures further into lending through the BLP.

Risks and Future Outlook

Despite Hyperliquid’s strong progress, several risks persist. Heavy reliance on HYPE token staking could make the platform vulnerable to liquidity disruptions if token values swing sharply. The effectiveness of HIP-3 also depends on active participation from market creators and the dependability of oracles like HyperStone. Additionally, as products like the 21Shares ETF gain attention, regulatory scrutiny of decentralized derivatives could become a significant hurdle.

Conclusion: Entering a New Phase?

The advancements made by Hyperliquid in 2025 point to a more mature ecosystem that is bridging the gap between traditional finance and decentralized platforms. By merging high trading volumes, robust infrastructure, and open innovation, Hyperliquid is reshaping the landscape of on-chain finance. However, its future success will hinge on its ability to manage volatility, uphold security, and meet the rising demand for decentralized financial solutions. For investors, Hyperliquid stands as both a promising opportunity and a reflection of the changing dynamics within the crypto sector.